What happened

U.S.-based EV stocks jumped in early trading today, including widely followed Rivian Automotive (RIVN -2.21%), struggling start-up Lordstown Motors (RIDE -0.58%), and heavy truck maker Nikola (NKLA -2.41%). Early gains ranged from over 1% up to 5% for Lordstown. There seemed like a good reason for that. But all three stocks reversed course and were trading down as follows as of 3:05 p.m. ET.

  • Rivian was down 4.4%
  • Lordstown was down 3.6%
  • Nikola was down 5.9%

So what

Some early news may have gotten investors in a bullish mood on the sector in general. Global auto giant Volkswagen announced it was selling a minority stake in its privately owned EV charging network Electrify America. And the investor is also a globally recognized company. Siemens, through its investment arm, is making a $450 million equity investment to help Electrify America grow its charging network in the U.S. and Canada. 

Investors likely saw the importance for EV makers as twofold. First, Siemens is a strong partner, with existing manufacturing and EV-focused operations in several U.S. states. It has plans to produce more than 1 million EV chargers over the next four years, according to a Wall Street Journal report on the deal. Second, the deal values Electrify America at $2.45 billion, according to Volkswagen. That supports the estimated strength of the industry that start-ups like Rivian, Lordstown, and Nikola are counting on.

Now what

Rivian and the other U.S. EV makers are pouring billions into the industry. Rivian had about $17 billion in cash and it says that will only take it through 2025 due to the substantial investments needed to grow. Lordstown and Nikola aren't nearly as well financed and are counting on the popularity of their respective battery electric vehicles just to survive. 

The details of the Siemens investment showed it will help grow Electrify America's charging infrastructure to 1,800 charging locations and 10,000 fast chargers by 2026. That's really just a drop in the bucket for what's needed, though, and the stocks reversed course in late-morning trading. 

Now, the general market itself also went into a decline this morning. With the tech-heavy Nasdaq Composite leading the way, that likely drove investor moves as much or more than the EV sector news. The moves show just how volatile stocks in the sector can be.

Range anxiety isn't gone yet. And these early-stage companies will need demand growth across much more of the population just to survive the years ahead. Seeing large, established industrial companies helping to grow the infrastructure seems like a positive step, however.