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Why NIO, Churchill Capital IV, and Arcimoto Stocks Jumped Today

By Howard Smith - Jun 23, 2021 at 3:47PM

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A market index addition and general optimism are helping move electric vehicle stocks.

What happened

Investors took a break from aggressive and more risky names earlier this year, but sentiment has been rotating back into sectors including electric vehicles (EVs) recently. Three names that are moving higher today are NIO (NIO -1.20%), Churchill Capital IV (CCIV) (which will be bringing Lucid Motors public), and three-wheeled specialty EV maker Arcimoto (FUV -4.53%). As of 3:15 p.m. EDT, shares of NIO were up 3.5%, while the stocks of Churchill Capital and Arcimoto were 5.7% and 10.1% higher, respectively. 

Those gains are continuing a monthlong trend for these names: 

NIO Chart

NIO data by YCharts

So what

Arcimoto's outsize gains began in the days following its first-quarter financial report for the period ended March 31. But the stock also got a boost with the announcement that it will be joining the Russell 2000 and Russell 3000 stock market indexes with their annual reconstitution starting next week. Churchill Capital IV, which now trades on any news related to Lucid Motors, and NIO both are making progress with growing demand and availability of new electric luxury sedan offerings. 

A white electric luxury lucid air dream edition from the side.

Lucid Air Dream Edition. Image source: Lucid Motors.

Now what

Yesterday, Lucid Motors gave investors an update on commercializing its first electric luxury sedans. The company said it has surpassed 10,000 paid reservations for its Lucid Air, including selling out the high-end Dream Edition that sells for more than $160,000. Lucid also said it opened a studio in New York City, and is accelerating its production plans due to the strong demand

NIO, which to date has only offered SUV models in China, is also expanding into luxury sedans. Its ET7 will be available early next year, and the company has announced plans for its first sales outside of China when it moves into Norway later this year. The ET7 will also be offered in that country later in 2022. 

Arcimoto's unique three-wheeled "fun utility" electric vehicles are now available in four states. The company, which has a market cap of only about $550 million, recently announced the closing of the purchase of a new manufacturing facility. Arcimoto plans to produce 50,000 units per year once fully operational. Besides the recreational user, Arcimoto markets its product for city driving, delivery use, and rapid responder needs. 

As commercial production gets closer, and in the case of NIO ramps even higher, investors are rotating back into this speculative sector. Those buying should still remember that these are long-term, speculative investments for those who believe the stories will play out.

Howard Smith owns shares of Churchill Capital Corp IV and NIO Inc. The Motley Fool owns shares of and recommends NIO Inc. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Nio Inc. Stock Quote
Nio Inc.
NIO
$19.84 (-1.20%) $0.24
Arcimoto, Inc. Stock Quote
Arcimoto, Inc.
FUV
$2.53 (-4.53%) $0.12
Churchill Capital Corp IV Stock Quote
Churchill Capital Corp IV
CCIV

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

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