Lucid Group (NASDAQ: LCID) and other electric vehicle stocks surged, likely due to new tariffs on Chinese EV imports.
Lucid (LCID) and other EV stocks jumped on Tuesday following reports that President Joe Biden has decided to increase tariffs on Chinese imports, including EVs, solar cells, batteries, steel, and aluminum to protect domestic industries from unfair competition.
According to CNBC, President Biden plans to quadruple tariffs on imported EVs from China, raising them from 25% to 100%. The US government will also impose a 25% tariff on Chinese steel and aluminum imports, and a 50% tariff on Chinese solar cells.
A senior administration official highlighted concerns over China’s excessive production capacity, stating,
“China is producing at a rate and with a trajectory that’s far in excess of any plausible estimate of global demand. That is going to flood the global market with supply that undercuts our ability to build productive capacity at home and … leaves all of us across the world more vulnerable to economic coercion.”
The Biden administration remains confident that the tariffs will not have a significant inflationary impact, as they are targeted specifically at certain sectors rather than being applied across the board.
The news of increased tariffs has had a ripple effect across the EV sector, with stocks like Tesla (NASDAQ: TSLA) and Rivian (NASDAQ: RIVN) also witnessing gains. Tesla saw a rise of 2.63%, while Rivian surged by 2.84%. Additionally, U.S.-based EV battery companies have also benefited from the announcement.
Lucid (NASDAQ: LCID) Stock Reaction
LCID stock jumped 11.03% to close at $3.12 on Tuesday. Its value increased by 19.08% this week. Trading activity has witnessed 78,057,944 (78.05 million) shares changing hands, well above the average daily volume of 27.99 million.
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