What happened
Shares of niche electric vehicle (EV) companies Canoo (GOEV -2.12%) and Fisker (FSRN -2.80%) zoomed ahead on Tuesday. On the back of a giant automaker's better-than-expected results, bullishness returned to numerous corners of the car industry despite the gloom pervading the market generally. Canoo's share price motored ahead by 6.5% for the day and Fisker's gained nearly 9%, while the S&P 500 index sputtered to a 1.6% decline.
So what
The big carmaker reporting results was ever-influential General Motors (GM 0.43%), which notched a massive beat on the bottom line in the first quarter and raised its full-year guidance.
Although GE's stock actually ended up falling by 4% Tuesday after a brief, early burst of post-earnings optimism, its Q1 provided plenty of reason for investors to be cheerful about the future of the vehicle industry -- particularly as it pertains to EVs.
That's because GM is making one of the most intense pushes into the EV segment among the world's top car makers. This seems to be working -- during the quarter, it sold more than 20,000 EVs for the first time, boosting its tally by roughly 27% on merely a quarter-by-quarter basis.
Canoo and Fisker, of course, are not GM. Both are niche manufacturers, with Canoo currently targeting the utility segment and Fisker busily planning the rollout of its Ocean SUV. Still, demand for EVs clearly remains robust. GM's first-quarter performance is only the latest of many indications of that.
Now what
Investors are right to feel bullish about the EV sector generally in the wake of GM's torrid quarter. Yet while this provides more hope for the niche players, investors should also keep firmly in mind that Canoo and Fisker -- among numerous other aspirants -- remain early-stage manufacturers. Given that, it might be better to invest in companies that are either established on the market or well into their initial EV rollouts.
