The Impact of Electrified Vehicle Sales on Automative Companies’ Stock Performance

Abstract

This study examines the relationship between electrified vehicle (EV) sales and the stock performance of nine major automotive companies over the period 2013–2023. The sample includes automakers from diverse market segments (ranging from mass-market to luxury manufacturers) selected based on the availability of consistent annual data for EV sales and key financial metrics. Using a panel data regression framework (with appropriate fixed- or random-effects chosen via Hausman test), the research analyzes how EV sales, Earnings Per Share (EPS), Debt-to-Equity (D/E) ratio, and Research & Development (R&D) expenditures impact stock returns. The methodology controls for firm-specific and time-specific effects, and employs robust standard errors to address heteroskedasticity. The findings indicate that higher EV sales growth and improved EPS positively influence stock returns, whereas a higher D/E ratio exerts a negative effect on stock performance. R&D spending showed no immediate statistically significant impact on short-term stock returns, suggesting that its benefits may materialize over a longer horizon. Collectively, the model explains about 25.6% of the variation in stock returns (Wald χ2 = 44.67, p < 0.001), highlighting the importance of the included factors. These results underscore the financial market’s responsiveness to electrification efforts and traditional performance indicators in the automotive industry.