(Bloomberg) — Electric vehicle stocks, which were hit hard this year as investors shifted out of growth industries, are getting a boost as President Joe Biden mounts a major push to accelerate the adoption of battery-powered cars and Chinese peers reported strong March sales.
Tesla Inc. rose as much as 3.7% in New York on Thursday. Smaller companies that typically take their trading cues from Tesla rose, too, with Workhorse Group Inc., Lordstown Motors Corp., Nikola Corp., Nio Inc., XPeng Inc. and Fisker Inc. all higher.
“We believe with a Biden-driven green tidal wave in the U.S., coupled by brisk EV demand in China and Europe, that the EV sector is entering a golden age with a new auto supply chain being built over the next decade,” Wedbush Securities analyst Daniel Ives wrote in a note. Ives continues to expect EV stocks to move 30% to 40% higher over the rest of this year.
Biden’s infrastructure proposal, unveiled Wednesday, allocates $174 billion to electric vehicles, including sales rebates and tax credits for consumers who buy American-made cars, in addition to industry incentives. A big focus of the plan is to develop a national network of half a million charging stations through grants to state and local governments and the private sector.
“Investor interest in our coverage universe has picked up markedly with the infrastructure bill and following recent weakness in the risk-off macro environment,” Cowen analyst Jeffrey Osborne, who covers stocks like Tesla, Workhorse, Plug Power and FuelCell, wrote in a note.
March delivery numbers from Nio and XPeng also helped to boost sentiment on Thursday. Nio said it delivered 7,257 cars last month, bringing its first quarter total to 20,060 vehicles — a 423% jump from the previous year period. XPeng delivered 5,102 cars for the month and 13,340 for the three month period, a 487% rise year-over-year.
(Updates stock moves, adds Cowen comments.)
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