The stock market headed lower on Wednesday, as investors lost patience with Congress and the White House in their thus-far failed negotiations about the debt ceiling. Stock market benchmarks were down as much as 1% in early-afternoon trading. No resolution was in sight, and it appeared that the high-stakes game of chicken would continue indefinitely.

It's been hard for investors to predict exactly what the impact of a U.S. default on its government debt would be. However, the effects on the global economy are likely to be extreme, and already, companies in some industries have felt the pressure of the economic slowdown.

In particular, electric car stocks were moving lower on Wednesday, led by Chinese EV maker XPeng (XPEV). Declines were almost as large for Nio (NIO -0.48%), while outside of China, Tesla (TSLA 4.96%) suffered a less significant percentage drop in its stock price.

XPeng runs into trouble

Shares of XPeng were down almost 11% Wednesday afternoon. The Chinese EV manufacturer reported first-quarter financial results that showed the impact of the global economic slowdown on its business and on the auto industry in China more broadly.

XPeng's results weren't pretty. Total vehicle deliveries added up to 18,230 in the first quarter of 2023, cut nearly in half from year-ago levels and down from 22,204 in the fourth quarter of 2022. Revenue plunged 46% year over year to about $590 million, as vehicle sales accounted for $510 million of that amount, down 50% from the same period in 2022. Adjusted losses widened to $320 million, as higher materials costs pulled gross margin sharply lower.

XPeng still tried to maintain a positive mindset. The company believes that the upcoming launch of the G6 electric SUV will be a game changer for the market, as it will be the first production model using XPeng's next-generation technology architecture platform. Moreover, XPeng kept building up its support infrastructure, which now boasts 425 stores across 145 cities and more than 1,000 charging stations in its self-operated network.

Nevertheless, XPeng said it delivered just over 7,000 vehicles in April, which didn't do much to quicken the pace of sales or show healthy demand. That's not a promising development for XPeng or the industry at large, which explains much of the stock price decline for the EV maker.

Falling in sympathy

Shares of Nio were also down sharply on Wednesday, falling 11% by early afternoon. One of XPeng's peers in the Chinese EV market, Nio has its shareholders worried that weak demand might be an EV industry-wide phenomenon rather than a company-specific issue.

Nio held a launch event for its new ES6 model on Wednesday. The company is boasting the ES6's longer charge range of 610 kilometers, with strong acceleration of 4.7 seconds to go from 0 to 100 kilometers per hour. A full suite of information and entertainment hardware make the electric SUV what Nio called a "sophisticated and high-tech mobile living space," including a virtual assistant and numerous driver assistance features. Luxury seating options emphasize the high-end styling of the vehicle.

Across the Pacific, declines in Tesla stock were more modest, at around 2%. Much of Tesla's growth story will depend on China in the long run, but with much more in the way of financial resources and production infrastructure, the U.S. electric vehicle pioneer will have an easier time outlasting short-term economic challenges.

For long-term investors, the declines in XPeng and Nio show that the two Chinese EV stocks are much more sensitive to short-term business conditions. That doesn't mean that they will fail, but if macroeconomic weakness persists, the two companies could find themselves under increasing financial pressure.