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Reading The Big Moves Driving The EV Market And What They Spell For Mobility Stocks

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Reading The Big Moves Driving The EV Market And What They Spell For Mobility Stocks

Between the rapid growth in Tesla Inc. (NASDAQ: TSLA) share price and the news coming out of emerging battery competitor Nikola Corporation (NASDAQ: NKLA), hype surrounding the electric vehicle (EV) market has captured traders’ imagination heading into the autumn months.

Even beyond the core EV names dominating headlines, traditional automakers, transportation firms and component manufacturers have emerged as alluring options for traders hoping to gain exposure to the segment.

The leading stocks in the EV industry and throughout the market will be the focus of an upcoming live demo from trading Platform VantagePoint using its predictive A.I. analysis tools. In preparation for the demo, we’ll take a look at the news surrounding the emerging industry as well as other stocks that are signaling interest in an electric future.

Tesla Surges To Precarious New Highs

It’s difficult to lead off any analysis of the EV market without first mentioning Tesla, which has spent much of 2020 finally living up to the market’s lofty expectations for the firm. That’s due to the fact that, in its most recent 2020 earnings report in July, the company posted its first annual profit after more than 10 years as a publicly-listed firm, making it eligible for inclusion in the S&P 500 (although it was ultimately passed over in the index’s last rebalancing).

The revelation sparked a massive buying spree for TSLA that put the company higher by 500% through 2020, though it has since given up some of those gains following the sell off that occurred in early September.

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Adding to this upward price pressure was the company’s announcement of a five-for-one stock split that occurred on the final day of August, which helped discount the lofty share price from $2,300 a share down to just shy of $500 on the day of.

Still, the company’s high valuation has earned it scrutiny from analysts who see the stock’s historical volatility, spotty earnings history and outsized market presence as key reasons for its exclusion from the S&P 500 and a potential risk for investors.

Contenders Make Waves With New Partnerships, Sales Models

But the surge in Tesla’s share price wasn’t the only EV news to hit the market recently.

General Motors Company (NYSE: GM) announced in early September that they were entering a $2B partnership with Nikola to produce the Badger electric pickup truck over the next decade.

Despite the news, Nikola hasn’t weathered recent market volatility quite as well as its more established counterpart, falling more than -20% through September. The stock is also struggling under a recent short seller note from Hindenburg research that has gained the attention of SEC investigators. The mixed headlines have suppressed price action in the stock, keeping it trading in the $30-range its bounced between through much of the past two months.

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Rounding out the recent news bombarding the core EV players, Chinese battery firm Nio Inc – ADR (NASDAQ: NIO) also garnered increased trader interest in recent weeks starting with the announcement of a Battery-As-a-Service model aimed at lowering the cost of EVs that earned the company an array of upgrades from analysts. The company followed this up by reporting a record-breaking 104% increase in vehicle deliveries in August compared to the same period in 2019. The news has helped push the stock to a new all-time high of $18.78.

EVs Rising To Meet The Road

This only scratches the surface of the names and developments populating the rapidly expanding EV industry. Initiatives from Volkswagen AG (OTC: VWAGY) and Ford Motor Company (NYSE: F) as well as EV infrastructure projects in the U.S. are forever altering the state of mobility.

With the heightened awareness of EVs in the market as well as the rapidly rising valuations, traders interested in the segment would do well to keep close watch over the technical and fundamental patterns influencing the industry.

 

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