Written by Brenda Nakalema

Tesla stock down after earnings. More stocks to watch.

Wednesday ended with a better than expected fourth-quarter earnings report from Tesla. Shares dipped in early Thursday, trading on the …

Wednesday ended with a better than expected fourth-quarter earnings report from Tesla. Shares dipped in early Thursday, trading on the back of this news. Other EVs also registered reactions to the Tesla news.

Tesla (ticker: TSLA) reported fourth-quarter earnings of $2.54 a share, an improvement from the Wall Street expectation of $2.36. It was definitely a gain, and yet the stock still fell 4.3% in recent trading. The S&P 500 and Dow Jones Industrial Average gained about 1.4% and 1.2%, respectively.

Investors expect greater gains from a company of Tesla’s calibre, which partially explains the dip in stock price. However, the company isn’t solely to blame for the lacklustre performance as the industry is still grappling with major supply chain problems that add extra costs and limit production.

“Supply chain challenges and port congestion resulted in a significant increase in our expedited costs in Q4,” said CFO Zachary Kirkhorn during the evening conference call on Wednesday. Elon Musk, Tesla’s eccentric CEO, also pointed to supply chain problems.

“In 2022, the supply chain will continue to be the fundamental limiter of output across all factories,” Elon said. “The chip shortage, while better than last year, is still an issue.”

Supply-chain problems have been ubiquitous in the entire EV car manufacturing industry and therefore is a problem that might call for collaboration among the industry players for a solution to be found. However, this news doesn’t dim down the strong demand Tesla still sees for its futuristic cars. But, concerns around Tesla seem to have spread to other EV manufacturers as investors begin to realize the full extent of the supply chain woes.

Shares of large-capitalization EV makers Rivian Automotive (ticker: RIVN) and Lucid (ticker: LCID) fell roughly 3% and 5.5% in recent trading. On the other hand, smaller capitalization EV makers experienced less severe declines in their stocks. This factor notwithstanding, shares of Fisker (ticker: FSR), Lordstown (ticker: RIDE), and Canoo (ticker: GOEV) slipped 0.9%, 1.9% and 0.2%, respectively. These stocks recently faced heavy blows, dropping by an average of roughly 30% over the past three months.

Despite the chaos brought on by the supply chain challenges, the EV market seems to have caught the eye of two new companies, Ford (ticker: F) and GM (ticker: GM), that are both aspiring to release their own EVs soon. Shares of both companies rose by 2.8% and 1.2%, respectively, as if undaunted by the persistent semiconductor challenges plaguing the industry. On the other hand, investors appear to be waiting for earnings reports from both companies before trading their shares more aggressively.

Tesla is a big EV player in the Chinese market, and therefore its results also affect Chinese EV makers NIO (ticker: NIO), XPeng (ticker: XPEV), and Li Auto (ticker: LI). Shares of both NIO and Li dropped by more than 2%, while XPeng fell by more than 5%. The three companies have faced it rough in the markets lately as their stocks are down on average about 28% over the past three months.