What happened

In early afternoon trading, the S&P 500 is struggling to recover from a drop earlier in today's session. Electric vehicle (EV) stocks are treading a less rocky road thanks to an announcement from carmakers that is powering excitement for several upstart EV companies: Rivian (RIVN 6.10%), Lucid (LCID 0.41%), and Nio (NIO 8.72%).

As of 1:57 p.m. ET, shares of Rivian and Nio are up 6.1% and 10.2%, respectively, while Lucid is up 3.1%, paring back its earlier gain of 6.6%.

So what

EV drivers throughout North America will soon have greater access to charging stations thanks to a new plan announced by General Motors and six auto industry partners: BMW, Honda, Hyundai, Kia, Mercedes-Benz, and Stellantis.

The initiative aims to install at least 30,000 charging points in urban areas and along highways, initially, to help ensure EV drivers are able to power their batteries when they're on the road. Planning on making charging points available to U.S. drivers starting in summer 2024, the joint venture expects to install charging locations in Canada soon thereafter.

Providing access to a variety of EVs, the charging points will accommodate both Combined Charging System (CCS) and North American Charging Standard (NACS) connectors. 

While interest in EVs has accelerated recently, many potential EV owners are still reluctant to trade in their gas-powered vehicles due to fear of running out of battery power. Addressing this concern in the joint venture's press statement, Oliver Zipse, CEO of BMW, stated the following:

North America is one of the world's most important car markets – with the potential to be a leader in electromobility. Accessibility to high-speed charging is one of the key enablers to accelerate this transition. Therefore, seven automakers are forming this joint venture with the goal of creating a positive charging experience for EV consumers. The BMW Group is proud to be among the founders.

The joint venture will rely on both private and public funds for the development of the charging infrastructure. Expansion of access to EV charging infrastructure is a significant goal of the Biden administration, which aspires to have 500,000 chargers installed in the U.S. by 2030. Both sides of the aisle have also embraced the plan to expand EV charging. The Bipartisan Infrastructure Law passed in 2021 provides up to $7.5 billion in funding for development of EV charging infrastructure.

Like many EV makers in 2023, Rivian announced last month that it plans on adopting the NACS standard. Lucid, on the other hand, hasn't decided (yet) to do the same, but its drivers will still have greater access to charging infrastructure thanks to the CCS charging points.

While Nio's vehicles don't appear on North American highways and byways, investors are celebrating the joint venture as a sign of a global interest in expanding charging access to drivers. Moreover, it complements news from earlier in the week that the Chinese government plans to spur investment in clean energy and transportation projects.

Now what

Undeniably, news of the joint venture is a positive development for those interested in seeing EV growth continue to expand nationwide. It seems premature to buy Rivian, Lucid, and Nio stocks, however, simply on this news. Fortunately for investors, these companies are reporting quarterly financial results in the coming weeks which will provide much greater material bearing on whether or not investors should park these EV stocks in their portfolios.