These 2 EV Stocks Just Hit the Gas

Odds of an end-of-year rally got a boost on Wednesday, as investors got an early taste of what the coming fourth-quarter earnings season might look like in January. With encouraging results from Nike and FedEx, major indexes were up around 1.5%, with the Dow Jones Industrial Average (^DJI 0.56%) leading the way just ahead of the Nasdaq Composite (^IXIC -2.05%) and S&P 500 (^GSPC -0.88%).

Data source: Yahoo! Finance.

The electric-car industry has been a big driver of innovation lately, with some companies focusing on the vehicles themselves and others looking at technology to support them. Both Nikola (NKLA -2.44%) and Solid Power (SLDP 3.80%) gained substantial ground on Wednesday from good news, and investors are hopeful that the companies could finally start to gain some positive momentum. Read on for more details.

Nikola looks to the long run

Shares of Nikola rose 8% on Wednesday. The electric-vehicle (EV) manufacturer's energy infrastructure subsidiary announced a major deal with a key supplier to help bring down the cost of hydrogen fuel cell EVs enough to make them competitive with conventional diesel-powered trucks.

Under the terms of the deal, Nikola and the hydrogen business of European energy network operator E.ON (EONGY 0.99%) will join forces to offer customers an integrated mobility solution. The agreement contemplates complete coverage of the needs of its customers, including supply arrangements, fueling infrastructure, and fuel-cell-driven vehicles themselves.

Specifically, E.ON will supply hydrogen to operate up to 5,000 Nikola Tre hydrogen fuel-cell EVs by 2027, with further supply increases in following years. The Tre models will have a range of up to 800 kilometers, or about 500 miles.

Nikola celebrated the fact that they anticipate saving up to 560,000 metric tons of carbon-dioxide emissions annually within five years. That could help contribute to broader efforts across the European Union to boost sustainability.

Investors in Nikola have been in desperate need of good news, given the stock's roughly 75% drop since the beginning of 2022. Deals like this are a reasonable start, but Nikola will have to get a lot more business in order to convince shareholders that it's in a lasting turnaround.

BMW likes Solid Power

Elsewhere, shares of Solid Power were also up 8% on the day on Wednesday. The company behind all-solid-state battery and sulfide-based electrolyte technology for EVs inked a deal that will enhance its existing partnership with a key auto-manufacturing leader.

Solid Power entered into a joint-development agreement with Germany's BMW (BMWYY -0.87%) under which the battery tech specialist will grant a research-and-development license for incorporating its intellectual property into prospective BMW vehicles. For Solid Power, the deal should help to accelerate cell development and manufacturing capabilities, given the extensive resources that BMW brings to the table.

For BMW, meanwhile, the $20 million, 18-month agreement is an essential component of a broader strategy to build a solid-state prototype line and eventually commercialize the technology.

The news was welcome after the unexpected retirement of Solid Power CEO and co-founder Douglas Campbell earlier this month. Investors at that time feared that the company could lose its focus and strategic vision, but expanding its BMW partnership helped to allay some of those concerns.

Even after the gains, the stock is down 70% just since May. Despite the promise of its technology, Solid Power has investors increasingly impatient to see the company meet its full potential.