These recent weeks have been very bullish for investors looking at infrastructure stocks. On Nov. 5, the U.S. government passed the much-discussed infrastructure bill. While there appears to be a few wrinkles to iron out before the funding is able to go where it needs to go, this is big news. As a result, it’s boosted EV stocks.
This $1 trillion bill will be instrumental in pushing forward initiatives to electrify the U.S. and provide clean energy-related jobs. Given all the noise around climate change following the COP26 proceedings, infrastructure-related stocks and, in particular, clean energy infrastructure stocks are likely to remain in high demand.
A signifiant portion of this bill is dedicated to tax incentives for electric vehicles (EVs), with the goal of half of all vehicles sold in the U.S. being electric, by 2030. According to this bill, consumers can receive a tax credit of up to $12,500 on electric vehicles. This tax credit would include a $4,500 incentive on union-made cars and $500 on batteries made in the United States.
Additionally, $7.5 billion will be earmarked for the construction of EV charging stations across the country. The infrastructure bill will also offer tax credits on used EV cars and a $9 billion grant to U.S. Postal Service to use EVs. In short, this bill will provide a massive push to EV sales in the upcoming years.
Electric vehicle stock seems to have a significant growth potential given how the world attention is sharply shifting towards clean energy. Let’s take a look at some of the best EV stocks that are bound to soar as the U.S government passes the infrastructure bill:
- Fisker (NYSE:FSR)
- Tesla (NASDAQ:TSLA)
- Lucid (NASDAQ:LCID)
- ChargePoint (NYSE:CHPT)
- Ayro (NASDAQ:AYRO)
- Lithium Americas (NYSE:LAC)
- Albemarle (NYSE:ALB)
Top EV Stocks for Infrastructure: Fisker (FSR)
Fisker is one of the newest electric vehicle makers, launched in 2016. This California-based EV manufacturer will launch its first model Ocean SUV in the fourth quarter of 2022.
Fisker has outsourced the manufacturing of its first model to Magna International. It is one of the most trusted original equipment manufacturers (OEMs) in the world. This decision is being considered as an intelligent, yet conservative move.
Fisker aims to manufacture and deliver 5,000 units by 2023. Currently, it’s expected Fisker’s flagship electric SUV, the Fisker Ocean, will be available by Nov. 2022. The company has actually moved its delivery timeline up, resulting in a recent surge in FSR stock.
I think Fisker has one of the most attractive-looking electric SUVs on the market. And the company’s price point for its Ocean SUV model is attractive. Accordingly, investors will pay close attention to preorder data as we approach Q4 of next year.
When thinking about electric vehicles, it’s impossible to leave Tesla out of the discussion.
The largest EV manufacturer globally, Tesla is regarded as the pioneer in this space. It’s certainly not the first company to come out with an all-electric vehicle. However, Tesla has been credited with starting the push toward electrification in the automobile space. Arguably, without Tesla, the entire sector may have taken much, much longer to shift toward an EV focus.
The company’s Model 3 was launched in 2016, and is among the best-selling cars globally. This is an EV company that has already built out a massive charging network. However, more charging infrastructure is a rising tide that could lift all EV-related boats. Accordingly, investors have reason to be bullish on Tesla stock right now.
This is a stock that’s looking a bit frothy at the moment. The company’s valuation has recently broken through the $1 trillion mark, making the company’s CEO Elon Musk the richest man in the world.
For Tesla aficionados, this rally may only just be getting started. However, this is a stock that investors may want to take caution with at these levels, and consider on dips moving forward.
Top EV Stocks for Infrastructure: Lucid (LCID)
Sticking with the EV sector for a minute, we come to Lucid. Perhaps one of the most sought-after EV stocks right now, Lucid has built quite the name for itself. That is, considering the company’s vehicles just started rolling off the production line this month.
Essentially, this coming quarter will be the first with material earnings to report. However, this is a company that has certainly had a number of catalysts play out this past year.
The Lucid Air lineup has been making a number of headlines. The company’s Dream Edition R model recently earned a record EPA rating for range – 520 miles. For those who have used range as an excuse not to buy an electric vehicle, Lucid’s found a way to take this objection away. Additionally, this company recently announced an expansion of the company’s manufacturing footprint. Lucid will grow into an expanded 5.1 million square feet site in Arizona. It’s expected this facility should provide ample growth, at least for now, as the luxury EV automaker continues to rake in orders.
As an early-stage EV company, it’s clear Lucid is a stock that’s benefited from the infrastructure bill. Whether this catalyst can carry on for some time from here remains to be seen.
Now, to a leading EV charging play. ChargePoint is the current leader in the U.S. market in this regard. The EV charging company has recently come back into favor, after seeing its earlier gains dissipate from January levels.
Indeed, ChargePoint’s valuation appears to fluctuate wildly alongside market expectations for the EV sector as a whole. This infrastructure bill is certainly a big deal for companies like ChargePoint. Besides the spotlight it shines on the future demand for EV charging stations, ChargePoint’s future economics could improve should the government tap this company for funds in the future.
With so many unknowns right now in the EV charging space, this stock is certainly one that’s hard to value. Accordingly, I’ve been on the sidelines with respect to CHPT stock. However, I can also understand the perspective that this is an intriguing option in this current climate right now. After all, investors are looking for sector-leading green plays right now, and ChargePoint is a company near the top of the list for many investors.
Top EV Stocks for Infrastructure: Ayro (AYRO)
Now, to a company many may not have heard of. Ayro is a Texas-based EV manufacturer focusing on the light truck and utility vehicles segment. It’s a segment that’s received a tremendous amount of attention of late, with rivals Ford (NYSE:F) and Rivian (NASDAQ:RIVN) making big splashes in this space.
However, the thesis among these commercial-grade vehicles is strong. As part of President Joe Biden’s infrastructure package, the modernization of various commercial vehicles is implicit in where some of the earmarked money goes. Accordingly, those bullish on growing demand among private companies seeking out green last-mile delivery vehicles may want to consider this stock.
Ayro is a company that’s been successful at raising money of late, recently completing two equity offerings. This is a company with what appears to be a decent balance sheet, and a niche market that is compelling right now. Accordingly, long-term investors looking for an infrastructure bill-related stock right now may want to take a look at Ayro.
Lithium Americas (LAC)
For more of a picks and shovels way to play the growth among EV infrastructure-related stocks, lithium producers are among the top choices for investors right now. Indeed, lithium-ion batteries remain the gold standard for most EV companies presently. Experts suggest the amount of lithium needed to support this electrification trend will only continue to skyrocket over time.
As a leading lithium producer, Lithium Americas is one of the top companies I think represents a sneaky way to play the growth associated with this infrastructure bill.
The company’s Thacker Pass lithium mine in Nevada is an impressive prospective site. This mine is expected to be under construction next year. And all eyes are on what sort of grade and metrics the company will report here. Additionally, the company has its Cauchari-Olaroz mine, which is slated to produce by mid-2022.
Lithium Americas is also a company that’s been busy on the acquisition front, acquiring Argentina-based Millenial Lithium (OTCMKTS:MLNLF). For those looking to build out their exposure to this growth space, this is one mining option worth considering right now.
Top EV Stocks for Infrastructure: Albemarle (ALB)
Finally, we have Albemarle. Another lithium producer aimed at providing battery-grade lithium to support rising EV demand, Albermarle is another one of my top mining picks for investors to consider right now.
Lithium miners like Albemarle have absolutely skyrocketed over the past couple years. Since hitting pandemic lows, ALB stock has been better than a 5-bagger for investors who bought near the trough. That’s certainly some impressive growth.
Can this trajectory continue? Time will tell. However, Albemarle is certainly a lithium miner that’s positioned well.
The company’s expected to continue to pump out record earnings, given where the price of lithium is right now. Should this dislocation between supply and demand continue, there’s certainly the potential for significant earnings growth over the near- to medium-term. Longer-term, like all commodities, there will likely be an equilibrium found in the market, at some point. But for now, Albemarle remains a top pick of many EV infrastructure enthusiasts, for good reason.
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.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.