Today, investors in a range of electric vehicle (EV) stocks are seeing very impressive gains. Indeed, it appears this bull market is far from over for investors in this growth sector. For those invested in embattled EV maker Canoo (NASDAQ:GOEV) and GOEV stock, today’s more than 20% move higher is a breath of fresh air.
Indeed, as a de-SPAC (special purpose acquisition company), Canoo has had a very rough go of it this year. Since hitting a high of nearly $25 per share late last year, GOEV stock has declined to as low as $5.75 per share this past week. Indeed, any de-SPAC trading at around half its par value just a few months prior is likely to garner attention in the market.
Today’s move to above $7 per share has provided Canoo investors with some level of reprieve. This move higher is based in part from growing interest among retail investors who believe this stock is too heavily shorted. The company’s short interest level is currently around 33%. Additionally, GOEV stock has a relatively low float and price per share. These are factors retail investors appear to be considering with this stock. Indeed, GOEV stock appears to have found credibility as a potential short squeeze candidate.
Additionally, there appears to be some sector-specific news driving all EV stocks higher today. Let’s dive into what the key catalyst is that investors are honing in on.
GOEV Stock Higher on Increased Emissions Standards
Today, a number of reports have pointed out a key catalyst for the EV sector. The National Highway Traffic Safety Administration (NHTSA) is set to consider higher penalties for automakers who fail to meet fuel efficiency requirements. While a negative catalyst for traditional auto makers, this announcement turns out to be very bullish for EV-focused companies.
As an early stage EV company that is still in its development stage, Canoo is likely to be a key beneficiary of such a ruling. Indeed, any sort of regulatory environment that encourages more ZEV credits to be bought and sold could benefit Canoo, should this company start producing vehicles en masse.
The thought is that if early stage EV companies can get more value for their EV credits, these can lower the costs of these vehicles. This would potentially spur increased demand in the near term.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.