Why Tesla stock fell today

These car stocks are getting cheaper — and one of them might already be cheap enough to buy.

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Blue Model Y Tesla vehicle

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

On an only modestly red day for the stock market, with major indices all down just a fraction of a percent each, shares of automotive stocks are getting hurt more than most. Tic-tac-toe, three in a row, shares of Ford Motor Company (NYSE: F), Tesla (NASDAQ: TSLA), and Nio (NYSE: NIO) are down 2%, 1.9%, and 5.9%, respectively.

Each of the three ran into a fender bender of modestly bad news today.    

So what

In the case of electric vehicle (EV) specialists Tesla and Nio, it's basically Wall Street to blame for today's declines. Granted, yesterday's announcement that Elon Musk has apparently decided he will buy Twitter after all is probably still having an effect on Tesla stock -- but there's new news, too.

Specifically, this morning, Japan's Mizuho bank lowered its price target on Tesla stock, citing "logistics challenges" that prevented the company from hitting its targeted delivery number for the last quarter. Although Tesla did still grow its deliveries 42% year over year, and grew its production numbers 54%, the miss necessitates a price target cut to $370 per share, says Mizuho today in a note covered by StreetInsider.  

Similarly, Mizuho cut its price target on China's Nio by about 5%, to $40 a share, citing -- surprise! -- "softer SepQ deliveries" and consequently lower expected earnings in the quarter. Indeed, across the EV industry, Mizuho says getting the needed parts to build EVs, and getting transportation to deliver them where they're going, remains "a challenge." Long term, Mizuho is still a supporter of both Tesla and Nio stocks and maintains buy ratings on both companies.  

Mizuho just isn't sure the stocks will go up as much as it previously hoped they might.

Now what

Now, what about Ford -- which, for all its electric ambitions, still remains today primarily a maker of SUVs and trucks powered by the venerable internal combustion engine? Well, earlier this week, as you probably heard, Ford reported a 9% decline in sales for September -- and an 18% decline in trucks. The company blames parts shortages for sidelining as many as 45,000 vehicles that remain only half-built because they don't have the parts needed to complete them.  

For that matter, even Ford's small but growing electric operation is apparently not immune from the problems plaguing its competitors. Last night, Ford announced that it's raising the price of its base model F-150 Lightning electric pickup truck by $5,000 -- not because it wants to, but because it has to, in order to absorb the costs of "supply chain constraints, rising material costs and other market factors." 

After this hike and the first round of price increases, announced less than two months ago, the price of the F-150 Lightning is now up an astounding 30% over its originally announced base price of just under $40,000 last year.

Now, from one perspective, Ford charging more money for a truck might be considered a good thing -- more money for Ford, right? But if all the extra money coming in one door immediately goes out another to pay Ford's suppliers, then there's really no net gain for the company or the stock. To the contrary, as Ford F-150 Lightning prices rapidly run up from "It's a bargain!" territory to "Hmm, maybe I should just buy a Rivian truck" levels, the good publicity and sales advantages Ford initially enjoyed from introducing the Lightning are already starting to evaporate.

Granted, at a lowly 4.3 times trailing earnings, I still think Ford stock looks cheap enough to buy. But based on today's bad news, I can't blame other investors for deciding Ford might actually need to get a little bit cheaper. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Nio Inc., Tesla, and Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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