The great auto sector unwind: EV stocks fall while ICE suppliers and Ford gain

Donald Trump’s return to the White House after a solid victory over Vice President Kamala Harris is expected to send shockwaves across the U.S. electric vehicle industry due to his past statements on tax subsidies. Analysts think that at the very least, EV tax credit policies will be revised and the Inflation Reduction Act will be adjusted.

Bank of America expects a tougher approach to trade and tariffs from the new administration, but also thinks thorough policy changes will be milder than Trump announcements to minimize business disruption. Analyst John Murphy sees General Motors (NYSE:GM) and Ford Motor (F) as beneficiaries of looser environmental standards, although there is also some risk seen for shareholders from higher tariffs on Mexico and trade war complications.

Sector decliners on Wednesday included ChargePoint Holdings (CHPT) -10.4%, Niu Technologies (NIU) -6.6%, Blink Charging (NASDAQ:BLNK) -8.1%, EVgo (EVGO) -7.5%, Polestar Automotive (PSNY) -5.8%, Hesai Group (HSAI) -5.5%, Innoviz Technologies (INVZ) -2.3%, and QuantumScape Corporation (NYSE:QS) -2.1%. Interestingly, Aptiv (APTV) -2.7% and Magna International (MGA) -2.2% were also lower as investors assess the implications on their EV businesses.

Meanwhile, auto parts suppliers Commercial Vehicle Group (CVGI) +11.9%, Douglas Dynamics (PLOW) +9.3%, Stoneridge (SRI) +8.0%, Dana (DAN) +7.7% Allison Transmission (ALSN) +6.8%, and PHINIA (PHIN) +8.0% were some of the stocks that traders may see as benefiting from ICE demand.

Tesla (TSLA) was the biggest gainer in the automobile sector on Wednesday morning, with an 11.6% swing higher. Ford Motor (F) was second with a 3.2% rally.