EV Stocks Juiced on Passing of $1-Trillion Infrastructure Bill

EV Stocks Are Charging Higher

President Joe Biden’s popularity may be plunging, but getting the $1.2-trillion infrastructure bill passed has been a big win for electric vehicle (EV) stocks.

EV stocks had already been gaining traction on optimism that President Biden would get his infrastructure bill passed with a chunk of money being designated for EV infrastructure.

The Global X Autonomous And Electric Vehicles ETF (NASDAQ:DRIV), which climbed by an impressive 10% in October, rallied by an additional five percent in the opening days of November.

It only makes sense. The infrastructure bill is, after all, designed to help shore up and expand everything from roads, to bridges, to water, to energy, to broadband Internet.

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The package has earmarked $5.0 billion to build EV charging stations along highways. Biden said the funding could help build more than 500,000 charging stations and lead to 50% of the vehicles on U.S. roads being electric by 2030. (Source: “AP Fact Check: Biden Hypes $1T Bill Impact on Electric Cars,” The Washington Post, November 7, 2021.)

“You’ll be able to go across the whole darn country, from East Coast to West Coast, just like you’d stop at a gas station now,” said Biden. “These charging stations will be available.” (Source: Ibid.)

Available, indeed. But the notion that the money earmarked in the infrastructure bill will build half a million EV charging stations is a bit of a stretch, even by Biden’s own reckoning.

The $2.5 billion set aside for charging stations is a far cry from the $15.0 billion that Biden previously said would be needed to pay for 500,000 EV charging stations. (Source: “FACT SHEET: Biden Administration Advances Electric Vehicle Charging Infrastructure,” The White House, April 22, 2021.)

Meanwhile, the International Council on Clean Transportation says the U.S. will need 2.4 million EV charging stations by 2030 if 36% of the new vehicles sold in the U.S. are EVs. In 2020, there were about 216,000 charging stations in the U.S. (Source: The Washington Post, November 7, 2021, op. cit.)

Regardless, the infrastructure bill is a start, and it puts EVs in the spotlight.

If there’s one thing that potential EV drivers fear most, it’s running out of juice. That’s fair, especially when you consider that people still run out of gas every day, and the roads are riddled with gas stations.

As expected, the passing of the infrastructure bill has helped the vast majority of EV-related stocks surge.

Some of the biggest early winners include stocks related to charging stations. On November 8, the first trading day after the passing of the infrastructure bill was announced, Blink Charging Co (NASDAQ:BLNK) soared by 212%, ChargePoint Holdings Inc (NYSE:CHPT) climbed by 13%, Evgo Inc (NASDAQ:EVGO) surged by 37%, Plug Power Inc (NASDAQ:PLUG) went up by seven percent, and Volta Inc (NYSE:VLTA) rose by 16%.

EV stocks were also on the move that day. Arcimoto Inc (NASDAQ:FUV) climbed by eight percent, Lilium NV (NASDAQ:LILM) went up by four percent, and Lucid Group Inc (NASDAQ:LCID) rose by eight percent.

Tesla Inc (NASDAQ:TSLA) stock probably would have also enjoyed a pop on November 8, but it went down after CEO Elon Musk asked his Twitter followers if he should sell 10% of his stake in the company. (Source: “Elon Musk’s Tweets About Selling Billions Worth of Tesla Stock Surprised Investors, But He Mentioned it Months Ago,” Insider, November 8, 2021.)

Musk said he’d abide by their decision. When his Twitter poll closed, 57.9% of the respondents had said yes. Tesla stock dropped by six percent in early trading after the poll ended.

Analyst Take

Tesla aside, November 8 was a great day for EV-related stocks, especially shares of EV charging station companies.

And that was just the beginning. With virtually every major automaker stepping into the EV industry, and governments around the world collectively pouring trillions of dollars into EV infrastructure, the outlook for EV stocks is exceptional.