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Tuesday Ticker: April 19, 2022

Toronto, Ontario ⁠— It’s all about automakers in this weekly Tuesday Ticker as electric vehicle stocks are shocked as analysts fret about potential Chinese COVID restrictions; Toyota delivers less-than-surprising news regarding its May 2022 production outlook and Elon Musk continues to worry investors about his mission to buy Twitter.

Electric hiccups
Electric vehicle stocks saw declines across the board in early trading Monday, likely prompted by zero-COVID goals in China and related supply chain delays, analysts say.

Shanghai’s government has reportedly set a new target for zero COVID cases outside of quarantine zones by April 20. The city reported 23,646 new local infections on April 16.

Shares of Rivian were down more than five percent from Thursday’s close come end-of-day Monday, while EV charging infrastructure company Volta saw its shares dip nearly six percent from Thursday’s close. Other companies that saw shares affected include development-stage manufacturer Mullen Automotive, which dropped more than 13 percent over Thursday’s close and lithium metal battery researcher Quantumscape dipped 4.7 percent over Thursday.

Tesla curiously survived the supply chain woes, dipping nearly a percentage over Thursday’s close in the early hours of trading, but gaining more than two percent over its pre-holiday close Monday afternoon.

Analysts are no doubt watching closely after the EV automaker chopped its 2022 delivery estimates⁠ mere weeks ago.

“Vertical integration is costly, and there are no shortcuts,” said market analyst Alexander Potter. “In its early days, Tesla dealt with delays, quality problems, and staggering cash burn. Rivian must endure this period, just as Tesla did.

“But we think the payoff will be worth it because Rivian has a chance to consolidate three large segments of the auto market before Tesla releases competing for products. And RIVN is insulated from many of the near-term headwinds.”

Tick-tock goes the Toyota clock
Toyota updated its investors on Monday with news the automaker would cut its May production plan by 100,000 units globally.

“Due to the impact of the semiconductor shortages, we have adjusted our production plans…from the number of units provided to our suppliers at the beginning of the year,” wrote the OEM in a news release. “As of right now, the global production plan for May is approximately 750,000 units.”

Investors do not seem surprised by the news⁠—automakers across the globe have now long been struggling with semiconductors and other pandemic-related shortages⁠. As of Monday’s close, Toyota shares were up 1.5 percent over Friday.

Tesla-owned Twitter
As Tesla CEO Elon Musk continues his mission to purchase social network Twitter, Tesla investors are worried about the CEO’s split responsibilities.

“Elon Musk’s offer to buy Twitter is the latest development in a weeks-long saga that is simply a distraction from the many challenges facing Tesla itself,” said David Trainer, CEO of investment research firm New Constructs, in an e-mail to CTV News.

Musk already touts leadership roles at SpaceX, the Boring Company, Neuralink and, of course, Tesla.

Tesla’s stock fell slightly last Thursday, following Musk’s initial disclosure he had made a US$41 billion bid to purchase Twitter. The CEO took a 9.2 percent stake in the company in March, a fact revealed via Bloomberg News in early April, making him the company’s largest individual shareholder.

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