Stock in Tesla, and other auto makers, was dropping early Monday. A disappointing forecast from the automotive chip maker ON Semiconductor appears to be the proximate cause.
Tesla shares were down 3.9%, just below $200 apiece, while Rivian Automotive stock lost 1.8%. Ford Motor shares dropped 1.2%. General Motors shares eked out a 0.2% gain after the company and United Auto Workers Union came to a tentative labor agreement on Monday. Investors might wonder if ON’s forecasts represent a chicken or an egg. Auto companies have been warning of weak EV demand for weeks, so it is possible that the chip maker’s cautious call is the result.
It is beside the point whether ON’s downbeat call is a function of the warnings from the auto makers, or ON’s forecast signals more pain ahead for EV sales. Investors are worried.