Please ensure Javascript is enabled for purposes of website accessibility

Why Proterra Stock Jumped 23.8% on Monday

By Travis Hoium – Nov 8, 2021 at 4:23PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Electric buses are getting a big financial boost from the infrastructure bill.

What happened 

Shares of electric mobility stock Proterra (PTRA -0.59%) jumped as much as 23.8% on Monday after Congress passed a $1.2 trillion infrastructure bill. Shares closed the day up 17.1%, and investors seem to be suddenly bullish on large infrastructure investment again. 

So what

The bill passed late on Friday includes $7.5 billion for electric vehicle charging along highway corridors and $5 billion directly for zero-emission buses. This could be a huge boost for Proterra, which is a leader in EV bus manufacturing.

Electric bus driving on the highway with a wind farm in the background.

Image source: Getty Images.

Overall, the funding should accelerate investment in industrial vehicles that Proterra is aiming to provide drivetrains to. If buses become more economical, we could see trucks and construction equipment electrify as well. This is a long shift, but any nudge in that direction helps Proterra. 

Now what

While I think the passage of this infrastructure bill is good news, the company has a long road ahead to become profitable. In the second quarter of 2021, it reported a $189 million loss, and it could be years from profitability.

Long term, I think Proterra has a chance to be disruptive in the industrial transportation market. But the stock will likely be volatile until industry adopts electrification. And even with billions of dollars of investment, that could be many years away. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.