What happened
Electric-vehicle (EV) stocks fired up the first day of November, with shares of charging infrastructure and battery manufacturers sent zooming after the latest numbers from leading manufacturers confirmed strong demand for EVs. This comes right at the start of the United Nation's COP26 climate summit in Glasgow, Scotland, where EVs are already grabbing eyeballs.
At their highest point in Monday morning trading, here's how much some of the top-performing EV stocks had rallied:
So what
With leaders from around 120 nations gathering at the climate conference on Monday, investors expect to see commitments on clean energy worth billions of dollars over the next few days. While many nations already consider EVs to be a key part of their clean energy goals, Tata Motors' Jaguar Land Rover is providing a fleet of EVs to ferry the world leaders to and from the conference venue, reflecting the U.K.'s emphasis on EVs as a major tool to combat climate change.
Image source: Getty Images.
Meanwhile, demand for EVs in China is already becoming unstoppable, as reflected in the latest numbers from automakers Nio, XPeng, and Li Auto released today. Here's how the companies fared in October:
- Nio delivered 3,667 vehicles in the month, down 27.5% year over year.
- XPeng delivered 10,138 vehicles, up 233% year over year.
- LiAuto delivered 7,649 vehicles, up 107.2% year over year.
Nio appears to be an outlier, but its orders hit an all-time high in October. Its deliveries during the month were hit only because the company was upgrading some of its manufacturing lines for new products lined up for launch next year. In short, today's numbers prove EVs are in high demand.
And EV bellwether Tesla just signed a three-year contract with China-based lithium producer Ganfeng (OTC: GNEN.F) for battery-grade lithium.
With global demand for EVs evidently booming, investors pumped more money into EV charging stocks like Volta and EVgo, as well as battery manufacturers like Microvast.
Volta stock, in fact, ended last Friday on a high note after the company announced it had hit a milestone by crossing 100 million electric miles on its charging network. Volta builds and operates EV charging stations that also feature digital displays, offering brands an opportunity to advertise. EVgo is among the largest EV charging companies in the U.S. and the first to build fast chargers that run on 100% renewable energy.
Microvast, on the other hand, makes lithium-ion batteries primarily for commercial vehicles. In its last quarter, ended June 30, the company announced a 53.8% jump in year-over-year revenue and projected 34.9% to 44.2% revenue growth for the full year.
However, there appears to be yet another reason Microvast shares may have zoomed today. Earlier in the month, financial analytics firm S3 Partners reported that Microvast has stock borrow fees as high as 114.3%, making it one of the most expensive stocks for short-sellers. Short-sellers, therefore, typically avoid stocks with such high borrow fees, and ones who have already shorted the stock might want to exit quickly as fees rise, creating a short squeeze that can send a stock's price skyrocketing.
Now what
There's no denying EVs are changing the dynamics of the automotive industry and sparking investor interest in EV stocks like never before. That, however, doesn't mean every EV stock is worth your money, regardless of what the market might believe.
With so many EV manufacturers, battery makers, and charging stocks available out there, you might want to weigh your options carefully and look for EV stocks worth betting on for at least the next decade.
