Today, investors in Churchill Capital (NYSE:CCIV) and CCIV stock are seeing some nice gains. The SPAC company bringing Lucid Motors public via a reverse merger is up along with the broader electric vehicle sector on what appear to be strengthening tailwinds.
Today’s move to the upside is a nice change of pace for many EV investors of late. A range of issues have plagued the electric vehicle space. Specifically, a major chip shortage has been a key near-term headwind for this sector. This headwind has amplified existing concerns about the valuations of many EV players such as Churchill/Lucid in the face of rising bond yields. In recent days, bond yields have come down somewhat, providing this sector with what appears to be a reprieve.
However, there’s one key reason why EV stocks such as Churchill Capital are surging today. Accordingly, let’s get to it.
Political Support for EV Sector Boosting CCIV Stock
Today, investors in CCIV are getting a nice boost courtesy of President Joe Biden.
The Biden administration is reportedly looking at ending a legal battle with California over regulation of motor-vehicle emissions. California is the largest auto market in the U.S. and has been a leader in setting some of the strictest regulations in the country. A waiver under the Clean Air Act allowed California’s stricter regulations to become the “de facto national standard.”
Accordingly, auto manufacturers petitioned President Donald Trump for relief from these standards. The Trump administration provided this relief, reinstating federal fuel economy standards and limiting the legal authority of states to set their own fuel-economy standards.
Biden is now looking at reversing this decision. By doing so, investors believe that stricter fuel emissions standards will directly benefit EV makers like Lucid Motors.
Additionally, Biden appears willing to double-down on his efforts to beat China in the EV race. At a tour of an electric bus and battery manufacturing facility on Tuesday, Biden said, “we have a lot of catching up to do but we’re going to be in a position where we ought to own the future…We ought to be the single most significant suppliers of electric buses and vehicles in the world before it’s over. Right now, we’re running way behind China.”
These comments suggest more in the way of political support for the EV sector could be on the horizon. Biden has already pledged direct support for the EV sector via his American Jobs Plan. The political landscape appears to be very positive for EV stocks right now. Accordingly, this optimism is being priced in today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.