QS - Why Fisker Lucid and QuantumScape Stocks Dropped on Monday
2024-02-05 15:34:30 ET
Shares of electric vehicle (EV) stocks dropped on Monday as investors digested the likelihood that rates will stay higher longer than hoped. In a 60 Minutes interview, Federal Reserve Chair Jerome Powell said the central bank will be cautious about cutting rates and that the strong economy has provided flexibility in slowing cuts.
The EV industry didn't take kindly to that sentiment. Shares of Fisker (NYSE: FSR) had fallen as much as 8.6%, Lucid Group (NASDAQ: LCID) had dropped 5.7%, and QuantumScape (NYSE: QS) was down 5.5% at their lows today. At 3 p.m. ET shares were down 7.4%, 3.6%, and 2.3% respectively.
EV companies are fundamentally manufacturers that sell a product customers typically finance. So, when rates are higher for longer it makes it more difficult to afford those products. In simple terms, that's why investors are selling EV companies that are extremely risky even in a low interest rate environment.
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Why Fisker, Lucid, and QuantumScape Stocks Dropped on Monday