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Tesla's Not the Only EV Stock Climbing Wednesday

By Dan Caplinger - Jun 23, 2021 at 11:55AM

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There's plenty of excitement about electric vehicles on a solid market day.

Stocks remain near all-time record highs, with some major market benchmarks pushing further into uncharted territory Wednesday morning. As of 11:15 a.m. EDT today, the Dow Jones Industrial Average (^DJI 1.27%) had eased lower by 22 points to 33,924, but the S&P 500 (^GSPC 1.73%) had gained 2 points to 4,248, and the Nasdaq Composite (^IXIC 2.09%) extended its record run with a 17-point gain to 14,270.

Electric vehicle (EV) stocks have been key growth drivers during the bull market over the past year, with industry pioneer Tesla (TSLA 4.67%) playing a vital role in supporting investor sentiment in the fast-growing space. The company's stock gained ground on Wednesday, but other players in the EV space also saw sizable gains. Below, we'll look at why investors are excited about EVs and what the latest news means for companies across the industry.

Tesla keeps charging up

Shares of Tesla were up between 4% and 5% on Wednesday morning. The EV pioneer continued to expand its infrastructure to support its vehicle sales.

Four Tesla vehicles on a desert valley floor.

Image source: Tesla.

The company reported that it has opened a solar charging station in the Tibetan city of Lhasa. The station represents the first within the current boundaries of China to feature its own solar power and storage equipment. Unlike some other parts of China, the mountainous region in the western part of the nation gets a lot more reliable sunlight to help power solar installations.

It's likely that Tesla will make moves to build more charging stations across China, as it aims to compete with Chinese EV manufacturers like XPeng (XPEV -0.81%) and NIO (NIO 1.39%). The Chinese EV market is huge, and Tesla's overall strategy has recognized its importance with major investments in its Gigafactory in Shanghai.

As popular as EVs have become, it's essential for users to be able to charge up when they need to. Tesla's overall strategy to provide dedicated infrastructure globally is crucial not just for the company but for the entire move toward EVs broadly.

Solid moves elsewhere among EV stocks

Meanwhile, other EV stocks also did well. XPeng climbed almost 5% on news that the company will seek to list its stock on the Hong Kong Stock Exchange, with the prospects for potentially raising around $2 billion in new capital. XPeng has worked to expand its vehicle product line to appeal to a wider range of buyers.

NIO picked up nearly 4% as well. Many see the Chinese EV stock as being a better prospective growth play than Tesla, especially given the immense share-price gains that the U.S. company has already seen in the past couple of years.

Lastly, Lordstown Motors (RIDE 6.87%) rose more than 7%. The U.S.-based start-up has been working to try to raise financing to get itself moving more quickly toward its strategic goals, and some have been nervous about whether the company will succeed in finding partners willing to put up capital. However, given just how much interest there is in EVs right now, it seems likely that Lordstown will find a way to move forward.

Electric vehicle stocks are revolutionizing the auto industry, and investors are looking to cash in. A strong day for stocks in the EV space bodes well for the new technology to catch on and keep becoming increasingly important in the long-term development of transportation.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends NIO Inc. and Tesla. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$900.09 (4.67%) $40.20
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$33,761.05 (1.27%) $424.38
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,280.15 (1.73%) $72.88
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$13,047.19 (2.09%) $267.27
Nio Inc. Stock Quote
Nio Inc.
NIO
$21.11 (1.39%) $0.29
XPeng Inc. Stock Quote
XPeng Inc.
XPEV
$24.41 (-0.81%) $0.20
Lordstown Motors Corp. Stock Quote
Lordstown Motors Corp.
RIDE
$2.80 (6.87%) $0.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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