After attaining remarkable new highs in July 2023, leading electric vehicle (EV) stocks including Rivian (NASDAQ: RIVN), XPeng (NYSE: XPEV), and Nio (NYSE: NIO) have encountered a substantial price correction during the subsequent two weeks.
This downturn has eroded a considerable portion of the gains these companies had previously amassed, sparking renewed interest in the volatility of the EV market.
Notably, the three electric car manufacturers have each seen their share price tumble by around 10% over the past week, raising concerns among EV stock investors.
Why are these stocks under pressure?
Amidst a constellation of factors influencing the recent declines in RIVN, NIO, and XPEV, two have stood out with pronounced impact.
Namely, the stock market investors took profits after the three EV stocks reached their highest point since the start of the year, fueled by strong delivery reports amid rising demand.
In addition, EV stocks came under further pressure after industry leader Tesla (NASDAQ: TSLA) reduced prices for some of its China-made vehicles this week.
Although one of these companies, Rivian, does not even sell in China, Tesla’s price cuts likely raised concerns among investors regarding the market share potential.
Taking into account Tesla’s expansive impact on the sector, investors were likely worried about these companies’ abilities to secure a more significant portion of the EV market, thus affecting their stock performance.
Furthermore, Tesla’s robust brand presence and reputation could persuade more buyers to purchase Tesla vehicles due to their newly-reduced prices, causing demand concerns for the three EV startups.
RIVN, XPEV, and NIO see $6.2B in combined market cap losses
As a result of the aforementioned headwinds, Rivian, XPeng, and Nio witnessed significant stock market losses over the past week.
More specifically, the three EV manufacturers lost a total of $6.2 billion in market valuation since August 9.
NIO led the losses, with its market cap sliding from $21.5 billion to $17.8 billion over that period.
Meanwhile, RIVN’s market cap declined from $21.3 billion to $19.3 billion, while XPEV’s fell from $14.8 billion to $13.6 billion since August 9.
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