Zinger Key Points
- China's restriction on graphite comes on the heels of the U.S. blocking the sale of some AI chips to China.
- It's an escalation of ongoing trade tensions between the two superpowers.
- Discover Fast-Growing Stocks Every Month
China’s Ministry of Commerce and General Administration of Customs announced Friday that it will begin restricting exports of graphite, a key component of electric vehicle batteries.
What Happened: Many EV companies, including Tesla, traded lower Friday, potentially on the news from China.
Tesla Inc TSLA stock traded lower Friday morning by more than 4% at one point. It’s unclear whether the stock was down because of the news from China, or from the company’s disappointing earnings report and warnings Wednesday afternoon.
What’s Going On: Tesla’s stock is now down more than 15% since its earnings report Wednesday. CEO Elon Musk warned the company will face significant challenges when it comes to Cybertruck production, The restrictions on Chinese graphite most likely won’t help.
Read Also: US Fires Another Shot At China's AI Aspirations: Latest On Nvidia, Semiconductor War
Rivian Automotive Inc RIVN stock also traded slightly lower Friday morning and is down more than 10% in the last week. In addition to production challenges, higher interest rates have made it more expensive for buyers to finance new cars, driving demand lower.
China, US Trade Restrictions: China’s announcement of graphite restrictions comes just a few days after the U.S. announced it will ban the sale of some semiconductor chips used for artificial intelligence computing to China.
Specifically, U.S. regulators are no longer allowing NVIDIA Corp NVDA to export some of its AI chips to China in order to slow the country’s development of competing technologies.
The latest moves are an escalation of trade tensions between the U.S. and China. Many experts see China’s announcement about graphite as a direct response to the U.S.’s move to limit China’s access to American chips.
“China finally wields its battery dominance as a geopolitical weapon: responds to chips crackdown with an export curb on battery graphite,” Steve Levine, head of the publication The Electric, said on Twitter.
Related Link: Elon Musk Predicts 'Inevitable' Adoption Of This Tesla Tech By All Major Automakers: 'To The Well-Organized Mind…'
Photo via Shutterstock.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
