What happened
Some electric vehicle (EV) stocks were having a rough day today after Tesla cut the price of its Model 3 and Model Y in China. Investors are concerned that the price cut could mean consumer demand is slowing in the country.
That weighed on some EV stocks today, including ChargePoint Holdings (CHPT 0.79%), an electric vehicle charging company. The stock was down by 2.3% as of 1 p.m. ET.
So what
Tesla dropped the price of its Model Y by about 9% and its Model 3 by about 5% in China. While ChargePoint doesn't operate its network in the country, any news that there could be a potential slowdown in consumer EV demand often causes the share prices of other EV stocks to drop.
To be clear, Tesla didn't say that Chinese consumers are cutting back demand, but investors may be perceiving the price cuts in that light. China is dealing with its own economic issues right now, including rising inflation, a real estate slowdown, and disruptions to the country's economy because of the government's strict zero-COVID policy.
ChargePoint investors may be concerned that demand for EVs in the U.S. could slow amid soaring inflation, high material costs, and a potential recession. The Federal Reserve is likely to increase the federal funds rate by another 75 basis points at its November meeting and could continue rate increases into 2023.
EV investors are keeping a close eye on the Fed's moves, as well as on economies around the world, to try to gauge how healthy the EV industry is right now.
Now what
ChargePoint shareholders will have to wait until the beginning of December, when the company reports its latest quarterly results, to see how ChargePoint is doing right now.
But investors can expect more share price shifts from ChargePoint, and other EV stocks, as investors grow increasingly concerned that the U.S. and other countries could experience a significant economic slowdown.
