Today, investors seem to be undecided regarding solid-state lithium battery maker QuantumScape (NYSE:QS). Mostly likely, QS stock is having trouble staying above water today due to political wrangling over President Joseph Biden’s plans for the U.S. to increase climate policy spending.
It’s no secret that Biden seeks to reduce U.S. carbon emissions by around 50% by the end of this decade. This would undoubtedly involve federal spending on climate change initiatives. However, West Virginia Sen. Joseph Manchin seems to have put up a roadblock to Biden’s plans.
Yesterday, Manchin made it clear that he doesn’t support federal funding for Biden’s climate or energy programs, at least in their current form. Sam Runyon, a spokesperson for Sen. Manchin, emphasized that the senator wishes to “avoid taking steps that add fuel to the inflation fire.”
Why does one politician’s opinion matter so much? It’s because currently, the U.S. Senate is evenly divided between Democrats and Republicans. Consequently, Manchin’s vote — and, by extension, his influence over other senators — is of critical importance.
Why Is This Affecting QS Stock?
It appears, then, that traders are connecting the dots between Biden’s stalled climate agenda and QuantumScape’s business model. QuantumScape produces solid-state batteries, which are mainly designed to be used in electric vehicles (EVs).
Hence, QuantumScape’s investors are happy when the government supports clean energy spending, and disappointed when that spending gets held up by political wrangling.
Still, it could be said that QS stock is holding up comparatively well today. The QuantumScape share price only pulled back moderately in morning trading. In contrast, Plug Power (NASDAQ:PLUG), FuelCell Energy (NASDAQ:FCEL) and Bloom Energy (NYSE:BE) stocks fell much further.
Besides, Runyon offered a glimmer of hope for supporters of Biden’s spending package. Runyon clarified that Sen. Manchin “has not walked away from the table,” which seems to suggest that negotiations are ongoing. So, a turnaround in policy — and therefore, in sentiment — may be in store at some point for QuantumScape and its shareholders.
On the date of publication, David Moadel 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.