EV stocks fell across the board on Thursday, tracking a broad Wall Street retreat set off by record capital-spending plans from Tesla and Alphabet after Wednesday’s close.
Separately, Axios reported on Thursday morning that President Donald Trump is still weighing a return to major combat operations against Iran.
Tesla set the tone from the opening bell, starting the session 8.8% lower at $341.00 and extending the decline to 14.2% by press time — touching $318.55, its lowest level since August 2025, nearly a year ago.
Weakness ran through the rest of the industry as Lucid fell 7.3% to $6.29, Rivian lost 3.7% to $16.55, XPeng declined 2.8% to $12.50, and Nio gave up 1.5% to $4.60.
The Nasdaq Composite had dropped 2.6% to 25,023.78 as of late morning, while the S&P 500 fell 1.4%, to 7,393.13 and the Dow Jones Industrial Average lost 1.1%, to 51,653.86.
Beyond equities, Brent crude topped $100 a barrel on the widening Middle East conflict, marking a new two-month high. Treasury yields hit their highest levels of the year, the dollar rose, and Bitcoin slipped 1.1% to trade near $64,880.
Tesla the Biggest Drag on the Tape
Tesla changed hands at $320.98 at 11:37 a.m. ET, down $53.03 from Wednesday’s close of $374.01, leaving the shares within sight of their 52-week low of $297.82 and far below the $498.83 high.
Volume had already reached 55.3 million shares by late morning, against a three-month daily average of 47.4 million, and the drop cut the company’s market capitalization to $1.21 trillion.
The selloff came after Wednesday’s second-quarter report.
Adjusted earnings came in at $0.33 per share, missing the $0.50 consensus even as revenue of $28.24 billion beat expectations, with operating income falling 57.0% to $398 million and operating margin compressing to 1.4%.
Wall Street responded in kind, with seven firms cutting their price targets on Thursday.
UBS trimmed to $385 from $442, after the stock had already fallen to a three-month low in pre-market trading as BofA and Oppenheimer cut earnings estimates.
Free cash flow turned negative at $1.09 billion — the first shortfall since 2024 — as quarterly capital expenditures surged 142.0% year over year to a record $5.79 billion.
Chief financial officer Vaibhav Taneja told analysts that full-year capex will exceed $25 billion, will keep growing for two to three years, and will fund the robotaxi fleet, Optimus production capacity, a semiconductor fab, solar manufacturing and AI compute.
Elon Musk called 2026 a “massive CapEx year” and defended the pace, arguing that lower capital efficiency is acceptable if projects finish sooner — on the same call where he dismissed rival humanoid demonstrations as scripted or remote-controlled.
Taneja said the order backlog is the largest since 2023, and FSD subscriptions reached 1.48 million, up 56.0% in a year.
Where Thursday Leaves the EV Complex
Beyond the day’s declines, the selloff deepens year-to-date losses that already stretched across most of the sector.
Among the Chinese names, XPeng‘s drop came hours after chief executive He Xiaopeng said the company stands ready to enter the US market and build plants there if trade policy shifts, while Nio slipped on the day EV reported the quiet closure of its Weiterstadt sales and service site in Germany.
Tesla is now down 27.9% in 2026 and 17.1% over just five sessions, though still up 6.3% across twelve months.
Lucid carries the heaviest losses on both horizons, down 40.4% year to date and 79.0% over a year, while XPeng has shed 38.4% in 2026 and 34.7% year over year despite its product momentum.
Li Auto is down 28.0% for the year and 58.8% over twelve months, and Polestar has lost 33.4% and 56.9% on the same measures.
Rivian and the Shanghai-headquartered EV maker Nio Inc. hold up best.
Rivian‘s 15.8% year-to-date decline masks a 20.2% gain over twelve months — the strongest one-year print in the group — while Nio’s 9.9% year-to-date drop is the shallowest, with the ADR off just 4.9% from a year ago.
SpaceX x Tesla
SpaceX shares fell 1.9% to $113.03 at late morning, a fresh all-time low that leaves the stock below the $135 price of its June 12 IPO and roughly half the $225.64 peak reached the same month.
The new record low low arrived hours after Tesla disclosed a $1.01 billion unrealized gain on its equity investment in SpaceX in the second quarter — a paper profit worth more than double the company’s operating income for the period.
The new low landed hours before Thursday evening’s launch window for Starship Flight 13, which opens at 6:45 p.m. ET — a week after the July 16 attempt was aborted when four of the booster’s 33 Raptor engines failed to ignite a second before liftoff.
Alphabet Adds the Second Shock
Alphabet fell roughly 6.0% despite reporting one of its strongest quarters in years, with revenue up 24.0% to $119.8 billion and Google Cloud growing 82.0% to $24.8 billion.
The company raised its 2026 capital-expenditure guidance to between $195 billion and $205 billion, up from the $180 billion to $190 billion range set in April, and signaled that 2027 will run higher still.
“We’re still in a supply-constrained environment,” finance chief Anat Ashkenazi said, attributing the increase to accelerated capacity delivery against strong demand, with third-party cloud capacity to be used as a bridge in the third quarter.
At the top of the new range, Alphabet would be the largest capital spender in technology this year, ahead of Amazon’s guidance of more than $200 billion.
Taken together, the two reports crystallized the question that has shadowed the AI trade all year — whether the investment cycle is compounding into returns or outrunning them — and the doubt spread across the sector rather than staying with the two reporters.
Nvidia, the supplier at the center of the capex both companies are committing, fell 2.3% to $207.29 — a reminder that the market currently reads record AI spending as a cost problem for the spenders rather than only a revenue story for the chipmaker.
Iran Report Deepens the Risk-Off Move
The macro backdrop supplied the second leg down.
Axios reported that amid a continued US military buildup in the region, Trump is still considering returning to major combat operations against Iran, with US and Israeli officials saying an expansion could come within days.
On Truth Social, Trump wrote: “Please let this TRUTH serve to represent that if they do this again, the U.S. will hold Iran responsible, in that the Houthis are a Surrogate and/or Proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves, who I am very disappointed with in that they have, until now, acted very professionally and smart.
Brent crossed the $100 threshold before paring gains, while West Texas Intermediate rose after Iran-backed Houthi forces claimed attacks on tankers in the Red Sea.
Rising crude fed directly into rates, sending the 10-year Treasury yield to its highest level in about a year and a half and cutting into expectations for Federal Reserve easing this year.
