What happened
On a generally bullish day in the markets, shares of electric vehicle (EV) maker Rivian (RIVN -2.07%) are racing higher. While the company hasn't reported anything noteworthy in and of itself, EV investors are choosing to park Rivian in their portfolios today in response to favorable news for its industry.
As of 3:12 p.m. ET, shares of Rivian were up by 7.5%.
So what
Motorists in California will soon start seeing a lot more EVs on their state's highways and byways. The Environmental Protection Agency announced Friday that it has granted two waivers -- including the Advanced Clean Trucks (ACT) rule -- to the California Air Resource Board regarding regulations for heavy-duty vehicle and engine emission standards. The waivers will allow the state to mandate that truck manufacturers ramp up their sales of zero-emission vehicles in California starting in 2024.
In response to the EPA's decision, California Gov. Gavin Newsom said, "Now, thanks to the Biden administration, we're getting more zero-emission heavy duty trucks on the roads, expanding our world-leading efforts to cut air pollution and protect public health."
The ACT rule requires truck manufacturers to increase the share of zero-emission vehicles among their new Class 2b and Class 3 trucks sold in the state to 55% by 2035. With a gross vehicular weight of about 8,500 pounds, Rivian's R1T electric pickup truck is a Class 2b vehicle.
Now what
While these decisions from the EPA are certainly bullish signs for the EV industry, those who have been wavering about whether to pick up shares of Rivian shouldn't feel motivated to do so now based on this development. What EV investors should be waiting to see is evidence that the company has overcome the production challenges that prevented it from achieving its 2022 target and led management to reduce its 2023 production target.
