The end of 2021 was marked by ominous reports predicting that the coming year would bring slow growth for the electric vehicle (EV) sector. We’re only one trading day into 2022, but so far, that’s definitely not the case. Yesterday, Tesla (NASDAQ:TSLA) reported that it had surpassed expectations for deliveries in the final quarter of 2021, leading its stock to start the year with a bang. Tesla closed up 13.5%, and thanks to its momentum, several smaller EV stocks rallied higher as well.
A Good Day for EV Stocks
While none of its peers have gained as much as Tesla stock today, many have demonstrated impressive performances. Lucid Motors (NASDAQ:LCID) closed up 7.6% while Fisker (NYSE:FSR) gained just over 6%. InvestorPlace contributor
It’s also worth noting that EV stocks across the globe have also enjoyed a good day. Nio (NYSE:NIO), XPeng (NYSE:XPEV) and Li Auto (NASDAQ:LI) all saw their shares rise this morning due to impressive December deliveries.
Why It Matters
But why should investors care about one day of gains?
As we have previously noted, many analysts forecast a grim 2022, citing supply chain concerns and other manufacturing difficulties. While it’s true that the stalling of the Build Back Better Act may cost the sector some growth, that doesn’t mean that the demand for electric vehicles is going to disappear. The green energy boom is still very much upon us and consumers are still seeking to transition to sustainable transportation options.
Investors should also note that Tesla demonstrated record-breaking delivery figures while the chip shortage posed constraints to its sector. While Tesla’s peers are smaller, they are also newer and are taking steps to stay competitive. Proterra is venturing into the battery production space and one industry expert has predicted that the by mid-2022, the Lucid Air may be the “best car in the world.”
Canoo is primed to start producing its futuristic vehicles, which are perfect for capturing the fascination of auto buffs, on American soil. Fisker is also gearing up to launch its Ocean SUV.
What It Means
InvestorPlace analyst Luke Lango recently advised investors not to “just sit back” while EV stocks break out in 2022. The way it looks from here, investors would be wise to heed this advice. The EV race isn’t showing any signs of slowing down so far and companies seem as determined as ever to overtake their peers and pull into the lead.
As long as Tesla stock continues to rise, its momentum is likely to carry other EV stocks along with it. All investors should be watching keenly as automakers continue to make progress and help move transportation forward.
On the date of publication, Samuel O’Brient 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.