3 Factors Are Driving EV Stocks Downturn, But It's A 'Bulk Buying Opportunity' For Investors, Wedbush Says

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By CAPosts 30 March, 2021 - 03:00pm 105 views

The drop in stocks of electric vehicles since the beginning of the year should be seen as a "great buying opportunity" for investors, said Wedbush analyst Daniel Ives in a note domingo.

fall in stocks of electric vehicles, Especially from Tesla , it has been a "sore time of risk" for the sector and, according to the note, it is mainly due to three factors: valuation concerns, increased global competition from electric vehicles and chip shortages causing low deliveries. starting in 2021.

© Reuters

Nio cut its first-quarter delivery guidance last week and halted production for five days due to a widespread semiconductor shortage that hit the auto industry hard

Year-to-date this year , Tesla and Nio shares fell 14% and 27%, respectively. Churchill Capital Corp IV shares are down 62% since it announced its planned merger with electric vehicle startup Lucid Motors.

But according to Ives, "this is not the time to panic in the EV realm ... it is just the lowest part of a multi-year high ride." Ives wrote that he sees the recent electric vehicle stock sell-off as a short-term setback in a multi-year bull rally

President Biden's green agenda may be the key to driving electric vehicle sales

A next catalyst to continue With the rise in the electric vehicle sector it could be a rollout of US President Joe Biden's green agenda, which will likely include tax credits for electric vehicles and more incentives for consumers to drive EV adoption, according to Ives. Ives wrote that he expects the Biden administration to reveal more details about its green energy agenda in the coming weeks. The core of the Biden plan will probably focus on boosting clean energy vehicles and zero emissions "in hopes of accelerating the deployment of electric vehicles," said Ives.

With the increased adoption of electric vehicles is likely to accelerate, investors should Trust your money on a $ 5 trillion market opportunity over the next decade, according to the note.

“We compared electric vehicles to the early days of the internet boom, as the entire global ecosystem is just beginning to take momentum with a potential of more than 20% of all global car sales by 2030 », concluded Ives.

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Source: MSN