TSLA, NIO, LCID, RIVN: Why Are EV Stocks Up Today?

  • Today, investors in a wide range of EV stocks are seeing double-digit gains.
  • These gains come following a bullish analyst note from Adam Jonas.
  • Additionally, the release of a new model from Li Auto (LI) has investors excited.
EV stocks - TSLA, NIO, LCID, RIVN: Why Are EV Stocks Up Today?

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Today, various beaten-down electric vehicle (EV) stocks are getting a lot of love from the market. In a sea of green, various electric vehicle manufacturers are seeing some of the highest volume, as investors look to take a risk-on view amid this market selloff.

Shares of Tesla (NASDAQ:TSLA), Nio (NYSE:NIO), Lucid (NASDAQ:LCID) and Rivian (NASDAQ:RIVN) are all up between 10% and 14% at the time of writing. This sort of outsized move typically comes amid some rather strong catalysts. Such catalysts appear to be materializing today.

First off, Morgan Stanley analyst Adam Jonas had a lot of good things to say about the sector in a note to investors. He reported that:

The best alpha (maybe the only true alpha) generated in autos comes from buying stocks during economic downturns, typically when their earnings have been cut 50 to 100%, when they stop the buybacks, cut the dividends, and take other measures to preserve liquidity. Of course, this is harrowing stuff and hard to do in practice, but as early cyclicals, auto names tend to rally while numbers are still being revised down.

This sort of positive spin on a rather dismal market certainly appears to have put some pep in EV investors’ step.

Additionally, Chinese EV player Li Auto (NASDAQ:LI) released its new SUV model. Named the L9 SUV, this model is one investors think could push further innovation in this sector.

Let’s dive into what to make of these announcements today.

Time to Buy EV Stocks As They Take Flight?

The EV sector has been among the hardest-hit places in the market. For growth investors, there really hasn’t been a good place to hide. With rising interest rates and crippled supply chains, even the highest-growth EV companies have been feeling the pinch.

However, as Jonas points out in his note, there are some silver linings. On a day like today, the market’s crowd mentality has provided a rather generous boost to this sector. Whether this increase was too generous or not will be determined over time.

In my view, these short-term moves are just that. This market has proven itself to be unpredictable. Accordingly, I’m of the view that more volatility is on the horizon.

That’s not taking anything away from today’s catalysts. Rather, I’m just trying to be realistic with this rally. Let’s see if this rally can hold as we head into the second-half of this year.

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.


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