Chinese lithium-battery maker EVE Energy Co. dived on Monday as an analysts’ report about potential price cuts by a major rival sparked competition concerns, while a lock-up of the company’s shares expired.
The stock slumped as much as 9.1% early in the session and was down 8.1% at the mid-day trading break. That put shares on track for their worst day since October last year.
The selloff followed an analysts’ report from Citi saying that Tesla Inc. supplier Contemporary Amperex Technology Co., one of EVE’s major competitors, is considering reducing prices for some products. In the report, which was distributed to clients and seen by The Wall Street Journal, the investment bank cited industry sources as saying that CATL might offer lower prices to some strategic customers starting from the second half of the year.
“We believe more competition among the battery makers is likely the developing trend this year,” the analysts said in the note.
They view CATL as “better positioned” than most rivals, thanks to its cost and scale advantage.
Shares in CATL were last down 1.3% at CNY414.90.
EVE’s stock came under additional selling pressure on Monday as the lock-up period for about 4 million shares from its employee stock-ownership plan expired, freeing shareholders to unload their holdings. Share prices tend to slide around such expirations due to concerns about a flood of new shares hitting the market.