Solid sales figure from an overseas rival and discouraging news from top domestic automakers scotched U.S. electric vehicle (EV) stocks on Wednesday. The effect also spread to affiliated businesses like component makers.
High-end SUV manufacturer Fisker (FSRN -12.70%) suffered a nearly 9% drop that day in its share price as a result. Next-generation truck specialist Nikola (NKLA 7.23%) felt the impact more acutely by taking a more than 11% hit to its stock. Ambitious, envelope-pushing battery company QuantumScape (QS 5.69%) didn't fall quite so steeply but still booked a 3% loss on the day.
BYD took pole position in EV sales
There's a new leader in the EV sales race, and it's not based within our borders. China's BYD (BYDDY 4.08%) reported that it sold over 526,000 EVs in the calendar fourth quarter of 2023. That easily topped the almost 485,000 sold by U.S. EV pacesetter Tesla and was the first time that BYD has lapped its American peer.
While the U.S. EV industry continues to be important, impactful on the global stage, and prominent, its bellwether company seems to be falling notably behind. That isn't a great development for the rest of the domestic industry.
And that industry has been sounding some rather gloomy notes of late. On Wednesday, veteran auto incumbent General Motors said that its Q4 deliveries rose by under 1% on a year-over-year basis. https://www.bloomberg.com/news/articles/2024-01-03/car-sales-slow-as-us-buyers-suffer-sticker-shock
Granted, unlike the car industry overseas, the U.S. sector was hit by a set of strikes by the influential United Auto Workers Union. Additionally, while General Motors and other incumbents do plenty of business selling EVs, they are still very much manufacturers of legacy internal combustion engine (ICE) models. As such, they are more readily identified with that long-standing, not very trendy technology.
Finally, as EVs come out of their novelty stage, overall their sales growth isn't as hot as it was previously. That's compounded by a decline in demand, which was strong just after the thick of the COVID-19 pandemic.
Life is tough for the big guys; it's tougher for the smaller fry
If Tesla and General Motors are going through a challenging time, you can bet that goes double for the newer, smaller, and more specialty auto companies like Fisker -- which still has only one model on the market -- and Nikola. Both of those businesses, meanwhile, have had more than their share of internal struggles (particularly the latter, with a founder and ex-CEO being convicted of fraud and sentenced to jail in 2022).
