2 Electric Vehicle Stocks that Plunged More than 7% Last Week

imageStock Markets21 minutes ago (May 17, 2021 06:30PM ET)

(C) Reuters. 2 Electric Vehicle Stocks that Plunged More than 7% Last Week

The electric vehicle (EV) industry experienced tremendous growth last year. However, a global semiconductor chip shortage and overvaluation concerns have caused EV stocks to retreat this year. This, along with the rising competition in the EV space, makes us think the near-term growth prospects are bleak for prominent EV players Tesla (NASDAQ:TSLA) and NIO (NIO). Read on.
The global electric vehicle (EV) industry moved steadily into the spotlight in recent years with significant government initiatives worldwide. And although the industry has significant growth potential over the long term, there are a few short-term challenges before it.

The ongoing global semiconductor chip shortage has significantly hampered the production lines of many established players in this space. Furthermore, because the EV space is getting crowded with new entrants, many dominant players are losing market share.

These factors, along with overvaluation concerns, are motivating some investors to rotate away from EV stocks. This is evident in the Global X Autonomous & Electric Vehicles ETF’s (DRIV) 6.5% loss over the past three months. Shares of leading EV players Tesla, Inc. (TSLA) and NIO Inc. (NIO) tumbled more than 7% last week. And we think the condition of the industry currently may lead to further decline in these stocks in the near term.

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2 Electric Vehicle Stocks that Plunged More than 7% Last Week

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