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Electric vehicle stocks have had a strong week after Rivian Automotive (NASDAQ:RIVN) struck a partnership with Volkswagen (OTCPK:VLKAF) and Tesla’s (TSLA) deliveries report was well received by investors.
Over the last week, notable gainers included Polestar Automotive (NASDAQ:PSNY) +30%, Canoo (NASDAQ:GOEV) +15.5%, Li Auto (LI) +14.4%, NIO (NYSE:NIO) +12.1%, Lucid Group (LCID) +11.1%, XPeng (XPEV) +9.2%, ChargePoint Holdings (CHPT) +7.8%, and LiveWire Group (LVWR) +7.8%. Looking at just Wednesday’s action, VinFast Auto (VFS) was up 4.2% and QuantumScape (QS) rose 2.6%. Traditionally, EV stocks have been pulled higher by a Tesla (TSLA) Halo Effect when investor sentiment was positive on the Elon Musk-led company.
Bank of America analyst John Murphy said the Rivian (RIVN)-Volkswagen (OTCPK:VLKAF) partnership is meaningfully positive as the agreement should provide Rivian (RIVN) with access to capital to not only fund the ramp-up of production of the R2 at its Normal, Illinois facility, but also to build a new facility in Georgia for its mid-size vehicle platform. “RIVN could also see potential benefits from material cost savings and operating efficiencies that would help improve its cost position and ultimately higher gross margins,” noted Murphy. The deal has also raised hopes of other significant partnerships in the EV space.
Meanwhile, Morgan Stanley thinks there are signs that Tesla (TSLA) is getting its mojo back. “Little more than 2 weeks ago, our clients were preparing for shareholders to reject Elon Musk’s 2018 comp package, potentially setting up a change of management and strategy, compounding many months of negative news flow. Fast forward to today, clients are beginning to ask us about positive catalysts into 2Q results and beyond,” wrote analyst Adam Jonas.