EV Stocks Struggle Amid High Rates and Trade War Tensions

EV stocks faced significant pressures due to rising interest rates and trade wars. The report suggests cautious investing with opportunities in ChargePoint, Nio, and Archer Aviation, as interest rates decline.

Date: 23-04-2025

AI Rating: 5

Market Overview: The electric vehicle (EV) sector has shown volatility in response to macroeconomic factors such as rising interest rates and trade tensions. The initial surge in EV stock prices during the meme stock frenzy of 2021 has not been sustainable, leading to sharp declines in subsequent years.

In fiscal 2025, ChargePoint Holdings reported an 18% decline in revenue, reflecting the adverse impact of rising interest rates that suppressed EV market activity and led to reduced business investments in charging infrastructures. However, ChargePoint experienced improvements in gross and operating margins, hinting at operational efficiencies and an ability to navigate market challenges. Analysts anticipate a modest revenue increase of 11% for fiscal 2026, offering a glimmer of hope for recovery.

Nio, a prominent Chinese EV maker, reported its deliveries had stagnated in recent years due to various headwinds but rebounded with a 39% increase in 2024. The company’s focus on premium vehicle offerings and its robust cash position supported its operational stability, despite being unprofitable. Projected revenue growth of 39% for 2025, amid portfolio expansion and strategic government backing, presents a compelling case for the stock.

Archer Aviation represents a speculative play within the EV landscape with its eVTOL aircraft initiatives. Despite having no revenue, the company holds a significant backlog and targets high production growth in the coming years. Archer's ambitious projections agree well with the expanding air taxi market, positioning it as a potential long-term growth opportunity.

The ongoing uncertainty from tariffs and interest rates remains a significant headwind. Investors are advised to approach the EV sector cautiously, potentially utilizing dollar-cost averaging strategies to mitigate risk while capitalizing on select opportunities.

Stocks: CHPT NIO ACHR