The golden age of electric vehicles has ended.
For years, the auto industry was intoxicated by the allure of electric vehicles. Car manufacturers released optimistic sales forecasts for electric vehicles and announced ambitious growth goals.
When Wall Street declared electric vehicles the future, it assigned astronomical values to electric vehicle startups.
But now, as demand for electric vehicles plummets, this intoxication is wearing off.
On the 14th (local time), shares of electric vehicle startup Fisker plunged by 52% amid bankruptcy fears, while Tesla’s stock fell more than 4%, leading to a widespread decline in the stock prices of U.S. electric vehicle companies.
Moreover, traditional automakers planning to enter the electric vehicle market are either cutting back on their production lines or delaying the launch of new vehicles.
For now, the financial markets are flashing red. On this day, Fisker, facing bankruptcy, recorded a 52% drop to 15 cents compared to the previous New York Stock Exchange trading day.
This is because the Wall Street Journal (WSJ) reported that Fisker had contracted with a law firm in preparation for the risk of bankruptcy due to a deteriorating financial structure.
With Fisker’s crash, Tesla also fell by more than 4%. On this day, Tesla recorded a 4.12% drop to $162.50 compared to the previous New York Stock Exchange trading day.
As Fisker and Tesla plunged, other electric vehicle stocks also fell. Rivian recorded a drop of 8.71% to $10.69, Lucid fell 6.07% to $2.63, and Nikola dropped 6.00% to 60 cents.
In particular, Fisker and Nikola risk being delisted from NASDAQ as their stock prices have been below $1 for a long period. Lucid’s stock price is also a mere $2.63. Rivian, often called the second Tesla, barely hangs on at $10.
Still, Tesla is maintaining its price in the $160 range. Experts believe that other companies, besides Tesla, will likely become extinct.
Furthermore, traditional automakers are reducing their electric vehicle production plans.
American automakers such as General Motors (GM) and Ford and German automakers such as Mercedes-Benz and Volkswagen are either reducing their electric vehicle plans or delaying the launch of new vehicles.
Ford carried out massive layoffs from its production line last January. Ford announced that it laid off 1,400 workers from the production line of its flagship electric truck model, the F-150 Lightning, citing that the demand for electric trucks was not as high as initially expected.
Stellantis, an American automaker, has significantly reduced its electric vehicle production line, warning that the electric vehicle industry will be a bloodbath as too many electric vehicles are being produced compared to demand.
Other companies, including Mercedes-Benz, are also reducing their electric vehicle segments by delaying the announcement of new vehicles.
It may be safe to say that the golden age of electric vehicles in the auto market has ended.