Today, passage of President Joe Biden’s $1 trillion bipartisan infrastructure bill in the House of Representatives has stocks of several electric vehicle (EV) charging companies moving higher in today’s premarket.
The infrastructure bill allocates $7.5 billion in federal grants to build out a national network of charging stations. Furthermore, it helps to fulfill Biden’s stated goal of installing half a million electric vehicle charging stations across the U.S. He first set that goal during his presidential election campaign last year.
That the infrastructure bill has now passed the House has stocks of companies such as ChargePoint (NYSE:CHPT), Blink Charging (NASDAQ:BLNK), Evgo (NASDAQ:EVGO) and Volta (NYSE:VLTA) popping premarket.
Passage of Biden’s $1 trillion infrastructure bill moves the legislation a critical step closer to becoming law. And Biden himself has said that the bill will result in 500,000 electric vehicle charging stations being set up across the U.S. Furthermore, it will advance his goal of getting half of all drivers behind the wheel of an EV by 2030.
“We’re going to build out the first-ever national network of charging stations all across the country — over 500,000 of them,” Biden said this past Saturday. “So, you’ll be able to go across the whole darn country, from East Coast to West Coast, just like you’d stop at a gas station now. These charging stations will be available.”
The infrastructure bill provides $7.5 billion in federal grants to build the national network of charging stations. That’s less than the $15 billion that Biden initially wanted to pay for the half million charging stations. But it’s a significant investment toward building the infrastructure that analysts say is critical for widespread adoption of electric automobiles.
Biden’s comments, coupled with the House passage of the infrastructure bill, has investors grabbing electric vehicle stocks. CHPT stock is up 13% in the premarket, while VLTA stock is up 19%. Additionally, EVGO stock has gained 18%, and BLNK stock has risen 17%.
Why It Matters for EV Charging Stocks
The infrastructure bill’s allocation of $7.5 billion toward electric vehicle charging stations is great news for companies that focus on building the electric vehicle infrastructure that the world needs. Before today’s spike, CHPT stock was down 32% year-to-date, while BLNK stock was down 17% on the year. Most of these stocks have only been publicly traded for a year or two.
Wall Street has been concerned that the rollout and adoption of electric vehicles was moving at a pace slower than the Biden administration wanted. Several U.S. automakers have said publicly that it is unlikely they will be able to meet the president’s stated goal of having half of all vehicles be fully electric by decade’s end.
However, with money for these charging stations likely to flow to U.S. states within a month after the bill goes into effect, the picture of the EV market suddenly looks much rosier. Accounting consultancy Deloitte has forecast that electric vehicle sales could reach 31.1 million units by 2030, up from 1.7 million sales last year.
As a sector, EV charging stocks are going to get a big lift today. And the gains are likely to stick given that they’re based on substantive political developments that will benefit them financially. Going forward, electric vehicle infrastructure stocks are likely to keep climbing higher. Today’s news gives the entire sector a big jolt of energy. This comes after the stocks had been running on empty for most of this year.
On the date of publication, Joel Baglole 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.