What happened
Electric vehicle (EV) stocks including Lucid Group (LCID -0.69%) and Rivian Automotive (RIVN -0.69%), as well as EV charging-station stocks such as ChargePoint Holdings (CHPT -1.59%) rose today. The stocks of the three companies were up 6.6%, 8.5%, and 10%, respectively, at the close on Wednesday.
Not only were stocks in general marginally higher on better-than-expected retail sales, but the Biden Administration also announced a deal with leading EV and charging companies to accelerate the availability of interoperable and accessible charging stations across the country. These measures have the potential to boost EV sales over the coming years.
So what
January U.S. retail-sales data came in better than expected this morning, with sales up 3% month over month, a reversal of the declines in November and December, and the largest jump in nearly two years.
Not only did the overall figures point to a healthy consumer economy, but sales of autos and auto parts also rose -- by an even higher 5.9%, reversing the decline of 1.8% in December. So it's no surprise that auto stocks such as Lucid and Rivian are rising today on that news.
Dovetailing with the positive retail numbers, the Biden Administration also announced further plans today to accelerate the rollout of accessible charging stations across the country. As part of the announcement, the administration finalized standards for electric charging stations, in order to make them usable no matter the brand of EV.
The plan also stipulates that at least 55% of the components of these chargers be sourced form the U.S., with all final assembly for the chargers to occur in the U.S.
And as part of the announcement, the Federal Highway Administration (FHWA) and U.S. Department of Energy released details of $7.4 billion in grants to be allocated under the Bipartisan Infrastructure Law. The money will go to charging companies to build a nationwide EV and hydrogen fueling corridor for medium- and heavy-duty trucks, along with $2.5 billion to states and municipalities to build out charging infrastructure as well.
The new measures were announced with buy-ins from many leading private companies to adopt the new standards and make sure charging stations are accessible, easy to use, and interoperable. The buy-ins notably included Tesla (TSLA 0.49%), which agreed to open its charging stations to non-Tesla vehicles, as well as Hertz Global, BP, General Motors, EVgo, and the Pilot Company (a major operator of Interstate travel centers), among others.
Also among those mentioned was ChargePoint, which announced a new partnership with Volvo and Starbucks to deploy 60 fast chargers at 15 locations along a highway route between Seattle and Denver, as well as a second partnership with MN8 Energy and Mercedes-Benz Group to deploy 400 charging hubs across the U.S. and Canada.
Obviously, having ChargePoint mentioned as part of these announcements, with the potential for financial support from the federal government, was good for the stock. Meanwhile, the opening up of Tesla charging stations to non-Tesla EVs, as well as the accelerated rollout of charging stations, generally makes it more likely consumers will be incentivized to buy EVs in general and non-Tesla EVs in particular. And that can helps the prospects of EV competitors Lucid and Rivian.
Image source: Getty Images.
Now what
EV stocks are coming off a very tough year in 2022, as rising interest rates and inflation hurt the stock prices of virtually all growth stocks. Given that these companies are all still unprofitable, and might even need more funding at some point -- which has gotten much more expensive over the past year -- they were especially crushed. ChargePoint was down 50% in 2022, with Rivian and Lucid each down 82%.
With these beaten-down share prices, it's perhaps no surprise that the administration's announcement -- as well as its continued commitment to accelerate the EV rollout to 50% of new car sales by 2030 in the U.S. -- is lifting these stocks today.
Oh, and a healthy consumer helped by 50-year-low unemployment doesn't hurt the prospects for big-ticket item sales such as luxury EVs, either.
