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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.
