The electric vehicles (EVs) market is gaining traction due in varying degrees to a worldwide regulatory push for lower-emission vehicles and government subsidies. However, the industry’s growth depends largely on the deployment of charging infrastructure. So given the global semiconductor shortage that is disrupting EV production and inadequate charging facilities as a backdrop, Wall Street expects the shares of popular EV stocks, Tesla (NASDAQ:TSLA) and Lucid (LCID), to tumble by more than 25% in price. Read on.The electric vehicles (EVs) market is evolving rapidly, fueled by the regulatory push for lower-emission vehicles and government subsidies. Because countries worldwide are gearing up to achieve zero-emission targets, analysts expect global EV market share to be in the 7%-10% range in 2021.
However, insufficient EV charging infrastructures could limit the industry’s growth. A National Renewable Energy Laboratory (NYSE:LH) study revealed that 380 EV charging ports must be installed each day over the next nine years to keep pace with growing EV penetration. In comparison, approximately 30 ports were installed per day on an average in the U.S. between 2010 - 2020. Furthermore, supply chain disruptions are expected to weigh on the industry’s production capabilities, owing mainly to the semiconductor shortage, which could extend into 2022 and beyond.
The industry headwinds could also restrain the production capabilities of ultra-popular EV stocks Tesla, Inc. (TSLA) and Lucid Group, Inc. (LCID) in the near term. Given this backdrop, Wall Street analysts predict these stocks will decline by more than 25% in price soon.