What happened
Tesla (TSLA -5.59%) and other EV stocks are ending the week on a high note. Tesla shares were moving higher by 3.3% as of 2:10 p.m. ET. Start-ups Nikola (NKLA -6.67%) and Lordstown Motors (RIDE -1.16%) spiked as much as almost 10% early Friday. Those shares were still trading higher by 3.7% and 3.1%, respectively, in late-afternoon trading.
So what
The moves higher come as the U.S. House of Representatives is expected to pass the climate-friendly Inflation Reduction Act this afternoon. President Joe Biden could sign it into law as early as this weekend.
But the moves today also could be attributed to what Rivian Automotive (RIVN -8.00%) told investors last night in its second-quarter earnings report. Rivian said demand, in the form of preorders for its pickup truck and SUV models, continues to soar. That's good news for Tesla too, as CEO Elon Musk restated this week that the Cybertruck will begin shipping next year.
Now what
Preorders for Rivian's trucks were nearing 100,000, as of June 30. While they can be canceled, that's more than double the number the company reported just nine months ago. While the Cybertruck is sure to be unique, it still indicates general demand for electric pickup trucks.
That's also good news for Lordstown, which expects to be starting production of its electric Endurance truck in the current quarter. Shipments should start in the fourth quarter of this year.
Tesla will be competing with Nikola sooner than expected, too. Nikola has begun shipping its battery electric semi trucks and expects to deliver between 300 and 500 trucks this year. Tesla was thought to be getting into that market next year, but Musk also said on Twitter this week that the Tesla Semi Truck will actually begin shipping this year.
What appears to be imminent passage of the Inflation Reduction Act should also aid the electric vehicle sector in several ways. Direct incentives for consumers of EVs will be limited to trucks costing less than $80,000. That could be good news for Lordstown. The Endurance is expected to be priced as low as $52,500, according to industry follower Car and Driver.
The legislation will also support the industry in general with funds to help manufacturers grow supply and offering consumers incentives to install EV chargers. It also is investing in manufacturing more clean energy domestically. That should benefit Nikola as it adds hydrogen fuel cell vehicles to its heavy truck lineup. Nikola is also building hydrogen fueling infrastructure to support demand for that product.
These EV companies, and others, should benefit from the legislation, and that's just one reason the stocks are moving higher today.
