President Joe Biden had laid out plans to replace the US government’s fleet of nearly 650,000 vehicles with electric vehicles. The move could bolt the electric vehicle sector, which has recently been running hot with companies like Tesla reaching record highs.
Global sales of electric cars reached a high of 2.1 million in 2019, according to a report by International Energy Agency (IEA). And despite challenges posed by COVID-19 in 2020, EV manufacturers like Tesla broke records. Tesla’s stock soared by 740% in 2020, and many analysts predict Tesla shares will continue skyrocketing well into 2021. But while the media spotlight is on the California-based EV giant, many other manufacturers can stand to gain especially if Biden’s plan succeeds.
On January 26, 2021, the president announced that he plans to replace the US government fleet with “clean electric vehicles made right here in America, by American workers.”
Some of the top US electric vehicles manufacturers include General Motors (GM) and Nissan. An increase in demand for electric vehicles could also boost the stocks of companies associated in the production of EVs.
Notably, companies that make charging stations could see a spark as these would be crucial to supporting more EVs on the road. Plus, lithium stocks may be on your watchlist as the element is used to make electric car batteries.
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Ford and GM stocks jumped after Biden announced his EV initiative. Both companies plan to roll out new electric vehicles in 2021. Ford and GM have had long-standing relationships with government fleet networks.
Tesla has a valuation of more than $700 billion. It recently crossed into the top five players of the S&P 500. And despite a less-than-stellar Q4 2020 report, analysts believe the EV maker will continue to make strides in 2021.
On Friday, Argus Research’s Bill Selesky cranked his Tesla price target to $1,010 per share or a 30% increase from $777. He added, “We further believe that the incoming Biden administration will offer rebates and new tax incentives to encourage consumers to buy EVs, which we think favors Tesla versus all the rest.”
The luxury EV maker is currently valued at about $4.52 billion, and analysts project its stock to double over the next year.
This New York company makes off-road vehicles targeted at consumers seeking ruggedly-built rides powered by clean energy. While the company has yet to roll its first Hummer-like truck off the lot, it’s currently letting people reserve their vehicles. It also got plenty of media hype this past year.
Workhorse shares spiked by 30.2% the day after Biden’s announcement. The company makes electric cars and aircraft for the transportation sector, as well as cloud-based telematics technology.
Blink Charging is a major manufacturer of charging stations for EVs. According to Biden’s climate plan, he intends to work with local government officials to deploy more than 500,000 new public charging outlets by the end of 2030.
This Chinese EV company also gained steam in 2020 and saw a 113% increase in car deliveries compared to the previous year. It sold more than 1 million vehicles in 2020 and that number can turn into 10 million by 2030, according to research organization BloombergNEF.
The well-known car maker from South Korea has spent the last few years expanding its fleet of EVs. Earlier this month, it announced plans to partner with Apple to start producing autonomous electric cars by 2024.
Hyliion Holdings Corp is a Texas-based startup that, according to its promotional material, is focused on developing electrified powertrain solutions for the commercial transportation market (trucks). Hyliion already sells a hybrid drive train that can be fitted to existing trucks, while its Hypertruck ERX uses a generator fuelled by natural gas to charge the batteries for its electric motor.
Kandi Technologies Group is a Chinese manufacturer of batteries and electric vehicles. Headquartered in Jinhua in eastern China, the company also has a US subsidiary based in Garland, Texas. Kandi’s first 2 models are the K23 and the compact K27, and both are priced at the more affordable end of the EV spectrum. At the time of writing, it had also recently been announced that both models would qualify for a US$2,500 rebate for Texas buyers of cars powered by renewable energy.
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That’s the big question — and given the rising popularity of EV stocks, it seems that plenty of investors are gambling that the answer will be yes.
As things stand, it certainly appears that the EV industry is a sector with plenty of growth potential. However, whether the uptake of electric vehicles occurs as quickly as some people are predicting remains to be seen.
The world of electric vehicles is also an increasingly competitive space, so working out which companies are best placed to take advantage of future growth will be difficult. Throw in a dash of uncertainty about exactly how the Biden White House’s economic policies will impact EV manufacturers and there are plenty of factors to consider.
And as always, just like any other investment, buying EV stocks comes with a level of risk attached. It’s up to you to research the EV industry and individual stocks before deciding whether they’re worthy of any of your investment dollars.
Even though the electric vehicle sector is surging right now, it’s no guarantee it will stay hot into the future. Here are some points to keep in mind:
Biden’s plan to put more EVs on the road could send a shockwave through the electric vehicle sector. Some electric vehicle stocks are already surging. But before you can invest, you’ll need to open a brokerage account. Compare your stock-trading platforms to find one that’s right for you.
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