What happened

Stocks across the electric vehicle (EV) sector are surging this week -- among them, solid-state EV battery developer QuantumScape (QS 3.71%), charging network leader ChargePoint Holdings (CHPT -1.47%), and start-up vehicle maker Arrival (ARVL 10.00%). As of Friday morning, these three names were up by 16.2%, 24.6%, and 15.8%, respectively, for the week, according to data provided by S&P Global Market Intelligence.

So what

This pop marks somewhat of a recovery rally for these stocks. The market has been focused on inflation, and the government's report showing that the Consumer Price Index grew in June at its highest rate in 40 years didn't soothe concerns. But high-growth names had already been pummeled by those worries, and a bigger picture view pushed EV growth stocks higher this week. 

For its part, QuantumScape has soared by about 30% over the last 30 days. There haven't been any recent changes to the company's plan to commercialize its solid-state battery technology. It is still more than a year away from potential commercialization. But its stock had been in a long slide, and remains down over 45% year to date, even after the recent surge. 

Now what

The next update investors will get from QuantumScape will come on July 27, when it will report its second-quarter financial results. Any news about changes in the company's timeline could trigger a strong move in the stock price, but if the status quo persists, there wouldn't be any company-specific catalyst to move shares.

However, the number of QuantumScape shares sold short this year has been steadily increasing. More than 15% of the total outstanding shares (and more than 23% of the float) were sold short as of the end of June. That was an increase from 12.5% of total shares earlier in the month. That fact, along with the year-to-date slide, could mean that some traders expect a short squeeze, helping to explain this week's share price jump. 

ChargePoint is in a similar position -- short interest in that stock has jumped 50% since the start of 2022. Like QuantumScape, its move this week likely came on the back of a generally more upbeat mood about the EV sector. That was partly spurred by a recent Bloomberg report that noted that U.S. EV sales now account for more than 5% of overall car sales. That's a significant milestone, and indicates that mass adoption is coming, the Bloomberg analysis suggests. The report predicts that more than a quarter of all U.S. car sales will be fully electric vehicles by the end of 2025.

Arrival is ramping up its manufacturing plans for electric buses and delivery vehicles. It was the only stock among this trio whose rise was propelled by some company-specific news. Arrival intends to begin producing its delivery vans this quarter, but it has struggled financially as it works toward commercialization. Last week, the company announced a business reorganization aiming to cut costs to a level that will allow its current cash balance to maintain the business until late 2023. Investors liked the sound of that. They'll receive more details about that plan from management when the company delivers its next quarterly update on Aug. 11.