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Why Lucid, ChargePoint, and Volta Stocks Soared Monday

By Howard Smith – Nov 8, 2021 at 12:32PM

Key Points

  • Lucid just began delivering its initial, sold out, $169,000 Air Dream Edition electric sedans.
  • ChargePoint boosted its revenue guidance for its fiscal year after a solid quarter beat estimates.
  • Volta seeks to differentiate itself with a unique source for additional income.

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Electric vehicle and related infrastructure stocks are on a tear today.

What happened

It wasn't totally unexpected for the bipartisan infrastructure bill to pass the final vote in the House of Representatives. But you never know with politics, and when the votes were finally tallied Friday night, it became official. Stocks that should benefit soared today. Three big winners are Lucid Group (LCID 43.00%), ChargePoint Holdings (CHPT 7.61%), and Volta (VLTA -0.30%). Each of these electric vehicle (EV) stocks popped at least 12% early Monday morning. Though paring some of those gains, as of 11 a.m. EST, they were still higher as follows:

  • Lucid was up 6%.
  • ChargePoint gained 8.95%.
  • Volta rose 10.5%.

So what

It's not hard to see why investors are jumping into EV-related names today. The infrastructure bill contains $7.5 billion for building out EV charging infrastructure, as well as another $5 billion dedicated to replacing buses, including school buses, with zero-emission vehicles. There's also potential for President Biden's Build Back Better social spending bill to add to support for renewable energy and electric vehicle demand. And Lucid, ChargePoint, and Volta are already making progress growing their businesses even before any new help from federal spending. 

Arrow on fire charging higher.

Image source: Getty Images.

Now what

Shares of Lucid, ChargePoint, and Volta have been on the move for the past month. Some of that investor enthusiasm may have been anticipation that the infrastructure bill would pass, but some was also likely due to the companies' progress, too. 

LCID Chart

LCID data by YCharts

Lucid, in particular, garnered much excitement when it remained on schedule to deliver its first products to customers at the end of last month. The company plans to deliver 520 of its top-of-the-line $169,000 Air Dream Edition sedans before it begins delivery of its other models next year. That volume was clearly capped to match the 520-mile-range rating given by the Environmental Protection Agency for the long-range version. That's more than 100 miles farther than the nearest competition, and it highlights Lucid's focus to become a technology leader in the space.

Lucid is just getting started, and there may be plenty of bumps in the road ahead, but investors are looking at the company's forecast as reason to want to own shares. Lucid estimates that it will exceed $2.2 billion in revenue next year, and expand that to more than $5.5 billion in 2023 when it also begins producing its first luxury SUV.

ChargePoint and Volta aim to help build, and profit from, the charging infrastructure needed as EV sales grow. ChargePoint is already a leader in North America and has been growing in Europe. It operates a network of more than 118,000 charging ports, including more than 3,700 DC fast chargers. More than 5,400 of those ports were in Europe as of July 31. The company bumped up its fiscal year revenue guidance by 15% after its most recent quarterly financial update as sales continue to grow.

Volta is focusing on commercial uses for charging infrastructure, including shopping centers and other places of business. Its stations include large monitors where retailers can advertise as consumers plug in as they prepare to do their shopping. That brings Volta another income stream, while potentially tapping consumer dollars for the retailers that advertise as shoppers head into stores. 

These stocks popped today because the EV sector has now gained new support from the federal infrastructure bill. But investors should realize these names have yet to make profits, and there will be much competition and uncertainty ahead. Investments should be made for the long term, with the many risks kept in mind. For today, though, the movement toward EVs and related infrastructure got a real boost, and investors are jumping on board. 

Howard Smith owns shares of ChargePoint Holdings Inc., Volta, and Lucid Group, Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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