Tesla and Nio shares rise as EV makers get a broad lift after UAW calls strike

By Tomi Kilgore

Tesla is seen as a potential beneficiary of labor woes at the Big Three legacy automakers, whose workers are already paid about 38% more than Tesla's

Shares of electric-vehicle makers traded broadly higher Friday following the decision by the United Auto Workers union to strike at plants of the Big Three legacy automakers.

Tesla Inc.'s stock (TSLA) rose 0.5% toward a two-month high in premarket trading, with the EV market leader seen as a key beneficiary of the labor troubles faced by General Motors Co. (GM), Ford Motor Co. (F) and Chrysler parent Stellantis N.V. (STLAM.MI).

Meanwhile, GM shares slipped 0.2%, Ford's stock lost 1.3% and Stellantis shares tacked on 0.5%.

The strike comes as the three automakers have been making a big push into the EV market, efforts that could be weakened by the higher costs and production disruptions resulting from a prolonged strike. The workers at the three companies already get paid about 38% more than Tesla's nonunion workforce.

Read: UAW strike: 12,700 Ford, GM and Stellantis auto workers walk off the job.

"If a strike is lengthy (4 weeks+) then ultimately production and the EV roadmap could be pushed out into 2024, and delays would be on the horizon at this crucial period [of EV execution] for GM, Ford and Stellantis," Wedbush analyst Dan Ives wrote in a note to clients.

Tesla is not the only company that could benefit from the UAW strike. The Global X Autonomous & Electric Vehicles exchange-traded fund DRIV rose 0.4% ahead of the market open, while futures for the S&P 500 index SPX slipped 0.1%.

Among other U.S.-based EV makers, shares of Nikola Corp. (NKLA) shot up 14.4%, shares of Rivian Automotive Inc. (RIVN) gained 0.5%, shares of Workhorse Group Inc. (WKHS) added 0.7%, shares of Fisker Inc. (FSR) were up 0.5% and shares of Mullen Automotive Inc. (MULN) advanced 7.0%.

Also read:Nikola stock soars, as CEO sees first hydrogen fuel cell trucks delivered by month end.

EV makers based in China were also getting a boost. Nio Inc.'s stock (NIO) climbed 1.7%, XPeng Inc. shares (XPEV) rose 1.3% and shares of Li Auto Inc. (LI) edged up 0.2%.

-Tomi Kilgore

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09-15-23 0926ET

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