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Retail Traders Flock to EV Stocks With an Eye on U.S. Carmakers

(Bloomberg) —

The day-trading crowd is zeroing in on stocks with exposure to the electric vehicle revolution, targeting U.S.-based automakers.

Retail investors bought $448 million in shares of Ford Motor Co and Lucid Group Inc. over the past month, with demand recently surpassing that of Tesla Inc., according to data compiled by Vanda Research. That rise in demand marks the latest turn in individuals’ interest in electric vehicles who earlier this year favored Chinese companies Nio Inc. and XPeng Inc. 

The increased flows from retail investors has spread across the electric vehicle landscape to smaller companies, with Pioneer Power Solutions Inc., EVgo Inc. and ChargePoint Holdings Inc. seeing increased demand on Fidelity’s platform. While Tesla has remained the most bought asset in recent days, demand for Lucid and Ford has placed the pair among the most purchased stocks over recent weeks.

Those bets are facing some pressure on Wednesday. Tesla slipped 1.7% at the open in New York, while Lucid fell 3.3% and Ford dropped 1.5%. 

The ramping retail demand comes ahead of the debut of Ford and Inc.-backed Rivian Automotive Inc. The company is set to start trading Wednesday after raising about $11.9 billion in the biggest initial public offering of the year.

Read more: Rivian’s $10 Billion IPO Comes at EV Meme Moment: ECM Watch

Meme Effect

The frenzy around electric vehicle technology has reached meme stock status with swimwear seller Naked Brand Group Ltd. striking a deal to acquire EV technology company Cenntro Automotive in a stock-for-stock deal. The penny stock rose 6% after the news, but remains down 54% from a January peak.

Vanda Research analysts pointed out that they’re seeing an increase in demand not only for charging stocks like ChargePoint and Blink Charging Co., but solid-state batterymakers including QuantumScape Corp. Retail investors are expected to diversify away from Tesla, according to Vanda’s Ben Onatibia and Giacomo Pierantoni.

With passage of the so-called reconciliation bill, a measure that would in part provide measures to address climate change, seen as increasingly likely, demand for EV stocks could increase further, the analysts wrote. “Most of the tax credits for EVs and green energy are contained in the soft infrastructure package,” the pair said.

© 2021 Bloomberg L.P.


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