The Zhitong Finance App learned that in a research report released on Monday, Mizuho Securities took a cautious approach to the electric vehicle industry due to short-term demand issues and concerns about shrinking liquidity. The Japanese agency also warned that an increase in inventory levels could trigger another pricing headwind this year. As part of its electric vehicle rating reset, Mizuho downgraded Tesla (TSLA.US) and Rivian (RIVN.US) ratings from “buy” to “neutral.”

Vijay Rakesh, an analyst at the bank, stressed that it is still optimistic about the long-term future of electric vehicles and sees Tesla as a global leader, but Mizuho Securities believes that in the short term, the electric vehicle market may face problems such as slowing growth rate, increased price competition in the Chinese market, and continued consumer affordability. Among them, one piece of news related to the price war in the Chinese market is that BYD cut the starting price of the new Seal electric sedan by 5% to RMB 179,800 (US$24978.12) on Monday.

Additionally, Mizuho Securities lowered Tesla's price target to $195 (potential increase of 14%) and Rivian's price target to $12 (potential increase of 11%).

As of press release, Tesla fell nearly 1% to $169.25 in the premarket; Rivian fell nearly 1% to $10.72. Both electric vehicle stocks have declined by more than 30% since this year.