Markets just closed on a bad day for the automotive sector. While many leading carmakers finished in the red, it was a particularly difficult day for EV stocks.
Negative market momentum is working against the entire sector. Plus, a few other specific catalysts are weighing down popular names.
This list includes Tesla (NASDAQ:TSLA), Rivian (NASDAQ:RIVN) and Lucid Motors (NASDAQ:LCID), all which struggled today for different reasons.
Does this mean that investors should be bracing for more difficult days ahead from the EV sector? Let’s take a closer look at today’s events and assess what may be in store.
What’s Happening with EV Stocks
While most prominent EV stocks are down today, it makes sense to examine the sector’s biggest names.
Tesla closed down 0.43%. The EV leader is struggling for a clear reason. Famed investor Cathie Wood, noted for her bullish stance on the company, just offloaded $25 million worth of TSLA stock. This consisted of trimming Tesla positions in her ARK Innovation ETF (NYSEARCA:ARKK), ARK Next Generation Internet ETF (NYSEARCA:ARKW) and ARK Autonomous Tech ETF (BATS:ARKQ). While TSLA stock hasn’t fallen by as much as some of its peers, having a prominent institutional investor dump that many shares is never good news.
Meanwhile, Rivian has spent the day in a race to the bottom. Today, the company announced plans to offer $1.5 billion worth of convertible notes as a means of raising cash. As InvestorPlace contributor Dana Blankenhorn notes, that measure will water down holdings for current shareholders. However, RIVN stock has risen slightly in after-hours trading, suggesting that tomorrow may be a better day.
Things haven’t been so bad for Lucid, although this trendy EV startup also spent today falling. LCID stock closed out the day down more than 7% on news that it will be rolling out a cheaper model of the Lucid Air Pure Rear-Wheel Drive. The market did not react well to the news, but that doesn’t mean it can’t recover. More than anything, Lucid’s news may have broken on an unfortunate day.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
