What happened

Monday dawned darkly for investors in stocks tied to the electric car industry, as investors in EV start-up Canoo (GOEV -6.77%), solid-state battery researcher QuantumScape (QS 3.71%) and luxury EV maker Lucid Group (LCID 5.88%) all reacted negatively to news of Tesla (TSLA 1.85%)'s Q1 2023 "deliveries miss."

As of 1:45 p.m. ET, Canoo shares are getting hardest hit -- down 5% -- followed by QuantumScape with a 3.7% loss and Lucid losing 3.3%.

So what

Over the weekend, Tesla reported record numbers of both cars produced (440,808) and cars delivered (422,875) in a single quarter. The deliveries number in particular was up a strong 36% year over year. Nevertheless, Tesla fell short of analyst expectations, which had posited 432,000 deliveries for Q1.  

Why is this important -- and why does it appear to be unnerving investors in other EV-related stocks?

Consider that Tesla has been cutting prices rather drastically of late, partly in an effort to spur demand and partly in order to leverage its powerful profit margins to undercut rivals on price -- and take more of the EV market share for itself. However, this effort doesn't appear to be working as well as investors had hoped it might. (Tesla missed expectations when a lot of folks were betting it would beat expectations, after all.)

Despite missing expectations, Tesla might still have siphoned up EV demand that would otherwise go to rivals like Canoo and Lucid -- in which case their upcoming results could be even worse than feared. And seeming to confirm that fear, Lucid has announced plans to lay off 18% of its workforce, while Canoo just last week reported that it sold just one single vehicle -- to the U.S. Army -- last quarter.  

Now what

Now consider further that even as demand seems weaker than expected for Tesla -- and perhaps weaker than feared for Canoo and Lucid -- Tesla is compounding its and others' problems by cutting prices and starting a price war.

The result: Not only are EV sales not growing strongly as anticipated, but they're going to be bringing in less revenue (and profit) per EV sold as well -- for Tesla, and for everyone else, too! (Don't think we've forgotten about QuantumScape, by the way. Bad news for EV demand necessarily implies that future demand for batteries to power EVs might not be as strong as hoped, either.) Indeed, the prospects for Canoo, QuantumScape, and Lucid -- none of which has yet reached a point where they're generating profits, could be even worse than for Tesla, which is profitable.

Viewed from this angle, you can understand why Tesla stock is now down 7% despite reporting record deliveries, and why shares of Canoo, QuantumScape, and Lucid are all following the EV leader lower today.