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.
(TSLA) US Equity”/>Tesla Inc. rose almost 3% in premarket trading. Smaller companies that typically take their trading cues from Tesla rose, too, with Workhorse Group Inc., Lordstown Motors Corp., Nikola Corp., NIO US Equity”/>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.
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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.
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