Automobile stocks revved higher on Thursday after indications from China were that measures to stoke demand for both new and used cars will be put in place and EV subsidies/tax breaks will be extended.
The biggest gainers in the electric vehicle sector in early trading on Thursday were Faraday Future Intelligent Electric +33.59%, Nio +10.03%, $Ouster (OUST) $+7.99%, XPeng +7.95%, Electrameccanica Vehicles +7.35%, ChargePoint Holdings +7.31%, TuSimple +7.23% and Canoo +6.31%.
Tesla was also solidly higher with a 3.97% gain.
Detroit majors General Motors +2.73% and Ford Motor Company +3.39% were also higher and outperforming the broad market.
The boost in confidence in the auto sector includes many supplier stocks after Jefferies made the case that a recovery may be setting up.
"The risk/reward for auto suppliers do not look great heading into second-quarter earnings, but many companies are expected to reiterate their guidance for the year," noted RBC analyst Joseph Spak. He also said a key catalyst for suppliers could be the updates on production in the July/August/September time frame, which could be extrapolated to have more confidence in stronger 2023 production.
Auto supplier stocks on the move included Tenneco +10.98%, Visteon +6.97%, and Goodyear Tire & Rubber +4.55%.
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