EV and self-driving stocks fell nearly 15% in September, their second-worst month on record

A cardinal ETF for electrical and autonomous conveyance stocks suffered an disfigured period successful September, falling astir 15% amid fears a recession could dilatory gross for the automakers.

The Global X Autonomous and Electric Vehicles ETF closed connected Friday astatine astir $20, much than 37% disconnected the group's 52-week high. It was the 2nd worst-performing period for the radical connected a percent ground connected record, down lone March 2020 erstwhile the wide banal marketplace saw melodramatic declines.

Investors are increasing acrophobic that the imaginable for a recession won't deter the Federal Reserve Bank from its plan to proceed hiking involvement rates, which successful crook could marque caller vehicles much costly for consumers and businesses that request to concern the purchases.

Consumers are already grappling with sticker prices that are higher than ever – and with choky supplies that person led some dealers to request further premiums. According to J.D. Power estimates, the mean transaction terms for a new car sold successful August was $46,259, the highest connected record.

TrueCar expert Zack Krelle thinks consumers are already opening to balk astatine those precocious prices, particularly arsenic ostentation drives their different expenses higher – and particularly arsenic involvement rates proceed to rise.

"We're seeing consumers faced with the world that to spend the aforesaid conveyance astatine the aforesaid monthly outgo arsenic past year, they are forced to summation their down payment, which is creating caller affordability challenges," Krelle said successful a connection connected Thursday. "With expanding involvement rates, affordability is being tested."

It's apt that automakers' profits volition slump if the U.S. enters a recession. That has enactment unit connected the stocks of car giants similar Ford Motor (down 27% successful September), General Motors (down 18%), and Volkswagen (down 13%), each of which are included successful the ETF's holdings.

It's besides pressuring shares of the suppliers and startups successful the EV and autonomous-driving spaces that marque up the bulk of the ETF's portfolio. Not lone would a recession bounds automakers' quality to put successful caller technologies, but higher involvement rates — and the marketplace weakness that could travel a recession — would besides marque it harder for those smaller companies to rise further superior from different investors.

Most large automakers are prepared to thrust retired a recession. But galore of the smaller companies successful the EV and self-driving spaces could struggle. Some of the names that person attracted capitalist attraction implicit the past mates of years are inactive a agelong mode from sustainable profitability and are likely to request further currency infusions implicit the adjacent fewer years.

Some, similar EV artillery startup QuantumScape (a constituent of the ETF, down 21% successful September) whitethorn not adjacent person meaningful gross for respective much quarters, overmuch little profits.

Among the ETF's different large movers successful September:

• Lidar shaper Luminar Technologies was down 13% for the month.
• Chinese electric-vehicle makers Nio and XPeng ended the period down 20% and 34%, respectively.
• Electric heavy-truck shaper Nikola fell 35% successful September.

— CNBC's Gina Francolla contributed to this report.