Stocks in the electric vehicle (EV) sector have enjoyed a momentous 2021 as the trend of electrified vehicles sweeps across the country. During the year, investors paid special attention to popular names like Tesla (NASDAQ:TSLA) and Rivian (NASDAQ:RIVN). However, a newer EV name is attracting focus today. Little-known REE Automotive (NASDAQ:REE) is up more than 25% today. What exactly explains this large price movement in REE stock?
REE Stock: Why Is REE Soaring Higher Today?
While no company-specific news can explain REE stock’s price movement today, there are several other catalysts at play. Seeking Alpha reported that several EV stocks are trading higher today due to the fact that the government may increase electric vehicle infrastructure grants. This is certainly a possibility, as President Joe Biden supports electrification. Last month, Biden signed the bipartisan infrastructure bill. The bill included a $5 billion state-administered grant that would support the creation of EV charging stations. It will be up to each state’s Department of Transportation to enact these new changes.
Earlier this month, it was reported that REE had entered into a collaboration with Hitachi. The two companies will seek to increase the use of EVs across the automotive industry and provide an EV solution that will serve multiple segments. To do this, the two companies plan on developing a data-as-a-service and analytics-as-a-service platform.
“With Hitachi’s innovation and invaluable expertise in EV and digital technologies, REE is primed to build on our early leadership position as the leading e-Mobility platform across the globe,” REE CEO Daniel Barel said. “In addition, Hitachi is a well-known and respected player in the automotive, energy and digital industry which can drive customer orders, and we are looking forward to benefiting from their extensive sales network and relationships.”
The Bottom Line on REE Automotive
REE reported third-quarter earnings last month. The EV company has yet to reach profitability and reported a net GAAP loss of $414.9 million. A large portion of the loss was attributable to stock-based compensation expenses of $409.8 million. On the bright side, REE unveiled a concept for its fully autonomous last-mile delivery EV called the Leopard. Fans of REE will want to keep a watchful gaze on any updates it provides on the Leopard.
Shares of REE stock have shed more than 50% year to date. Investors are hoping for better returns as we head into 2022.
On the date of publication, Eddie Pan 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.