What happened

On a bad day for most stocks, shares of electric-vehicle-related ChargePoint Holdings (CHPT -4.44%) and QuantumScape (QS -4.16%), and hydrogen fuel cell maker Plug Power (PLUG -9.82%) are down between 6% and 8%. In afternoon trading on Dec. 6, all the major stock indexes are also down, with the S&P 500 off about 1.8% and the Nasdaq Composite down more than 2%. 

So what

There isn't any big news out from -- or about -- any of these three companies today that is the specific cause for any of their share-price declines. The most recent news is from ChargePoint, the EV charging station company, which reported third-quarter results on Dec. 1, with a 93% increase in revenue, but continues to report big losses. 

QuantumScape is still a pre-revenue business, having gone public to raise the capital to bring its next-gen battery technology to commercialization. It reported in late October, and hasn't announced any new partnerships or updates on its progress since then. 

What about Plug Power? Its shares are down 8% on the day, the biggest decline among this group. Similarly, there's no news out there, but shares of peer hydrogen company Bloom Energy (BE -7.47%) are also down big today, about a 4% decline. There's no specific bad news out there today -- just the pain of a turn in sentiment on a generally ugly day for stock investors.

So what is sending most stocks lower? In short, macroeconomic news that, in an ordinary environment, would be viewed as a positive. The short version: A potential more complete reopening of China's economy and industrial output could keep the economy -- and inflation -- hot, which could cause the Federal Reserve to keep interest rates higher for longer.

And that's something investors don't like to hear. 

Now what

Why are ChargePoint, QuantumScape, and Plug Power being hit even harder? In a word (or two): cash flows. All three companies are burning far more cash to operate their businesses than they are generating, and by a sizable margin. ChargePoint generated $395 million in revenue over the past year, while seeing $265 million in negative operating cash; that means it spent $265 million more to cover its operations than it generated in operating revenue. 


The numbers are even worse for Plug Power, with $643 million in trailing revenue and $532 million in negative operating cash flow. QuantumScape's $200 million in negative operating cash off $0 revenue isn't pretty to look at, either. 

In summary, the market sees potentially higher interest rates lasting longer, and sees that the math for these cash-burning companies might get ugly. They have the money on their balance sheets to keep burning for some time to come, but all three have a finite time before they need to start actually making money. Today, the market sees them as being risky if the costs of capital continue to rise. Today's macro news didn't really change the reality for these three companies, but it was a stark reminder that they will have to raise money at some point in the future. Ideally, it would come from selling their product at a profit; if not, future capital raises will be more painful for the companies and their shareholders.