What happened

Major indexes are driving lower today with the S&P 500 and Dow Jones Industrial Average both falling more than 1.3%. With regards to EV stocks like Rivian (RIVN 2.84%), Lucid (LCID 5.88%), and ChargePoint (CHPT -1.47%), the bears seem especially charged up. Besides a warning sign that inflation refuses to slow down, several analyst downgrades and news regarding Tesla (TSLA 1.85%) are providing pressure.

As of 12:13 p.m ET, shares of Rivian are down 4.7%, while Lucid and ChargePoint are down 5% and 6.4%, respectively.

So what

The Commerce Department provided updated inflation figures this morning, and those hoping to see a decline -- mostly everyone -- were disappointed. Over the past few months, prices had shown signs of declining compared to the same periods during the prior year, but the report this morning showed prices seem to be ticking back up. Whereas prices in December had risen 5.3% compared to the same month in the previous year, prices in February ticked up 5.4%.

Based on this data, markets are concluding that the Federal Reserve will continue hiking interest rates. Investors recognize the rise in interest rates as a troubling sign, for it could deter prospective EV buyers -- an issue particularly relevant to Lucid as it sees reservation numbers stagnating.

Pessimism from Wall Street is another factor motivating investors to click the sell button. According to The Fly, analysts took the following approaches today on Rivian's stock:

  • Mizuho cut its price target to $42 from $50.
  • Wells Fargo slashed its price target to $18 from $32.

Yesterday, analysts' attention was directed toward Lucid.

  • R.F. Lafferty lowered its price target to $12 from $17.
  • Cantor Fitzgerald reduced its price target to $13 from $18.

The prospect of lower EV sales surely doesn't bode well for EV charging stocks like ChargePoint. But there's an additional source of consternation for its investors. Electrek.co, an EV website, reported today that the first Tesla Supercharger station in the U.S. available to non-Tesla drivers has been identified in Western New York.

Last week, the White House announced that Tesla would begin to allow non-Tesla drivers the opportunity to power up at its charging stations. By the end of 2024, non-Tesla EV drivers will have access to 7,500 of Tesla's charging stations nationwide. This surely comes to the chagrin of ChargePoint investors who recognize that the company is now faced with a formidable competitor.

Now what

With news today that inflation continues to plague American consumers, it's unsurprising that investors are turning their backs on EV stocks. The prospect of higher interest rates down the road may motivate drivers to stay with their older vehicles a little longer or choose a used conventional vehicle. While this may affect less expensive EV models less, higher-priced EVs like Rivian and Lucid may certainly see lower sales in the coming quarters.

Regarding the appearance of the first Tesla charging station available to non-Tesla EV drivers, investors in EV charging stocks such as ChargePoint will want to monitor how this unfolds. There will be more than one winner among EV charging companies, but investors should monitor ChargePoint's upcoming earnings presentations to see if there's reduced demand for its services.

In terms of the analysts' reduced price targets on shares of Rivian and Lucid, it's important for investors to take these opinions with a grain -- or tablespoon -- of salt. Analysts oftentimes have shorter investing horizons than the multi-year holding periods we favor.