The electric vehicle sector is likely to see more ups and down as President Biden's $2.3T infrastructure plan works its way through Congress.
Wedbush Securities thinks there are two key components of the Biden plan for investors to focus on.
First, analyst Dan Ives says to expect an expansion of the tax credits currently valued at $7.5K for EV vehicles to the $10K range or potentially higher in a tiered system. "Other point-of-sale rebates could also be put into this wide ranging infrastructure bill to catalyze consumers to head down the EV path," he notes. The Wedbush team also anticipates a lifting of the 200K-per manufacturer ceiling on the credits being phased out which will restore the EV tax credits for stalwarts like Tesla (NASDAQ:TSLA) and General Motors (NYSE:GM).
"Another linchpin of these EV initiatives will be centered around massive expansion of charging stations around the US over the next decade. Today there are roughly 100k public charging ports with another 400k needed over the next decade to support this groundswell EV green tidal wave for consumers/trucking with the goal of 500k by 2030 (bullish for ChargePoint, Blink, among others) and $15 billion of the Biden plan dedicated to this key endeavor. In addition, the Biden plan includes electrifying 20% of the yellow school bus fleet among other areas of EV expansion/investment."
Congressional adoption of all or parts of the plan could provide a tailwind for electric vehicle companies like Fisker (NYSE:FSR), Lucid Motors (LUCIDM)-Churchill Capital Corp IV (NYSE:CCIV), Lordstown Motors (NASDAQ:RIDE), GreenPower Motor Company (NASDAQ:GP), Arrival (NASDAQ:ARVL), Blink Charging (NASDAQ:BLNK), Canoo (NASDAQ:GOEV), ChargePoint Holdings (NYSE:CHPT), QuantumScape (NYSE:QS), ArcLight Clean Transition (NASDAQ:ACTC), Beam Global (NASDAQ:BEEM), Blue Bird Corporation (NASDAQ:BLBD), Plug Power (NASDAQ:PLUG), XL Fleet (NYSE:XL), Electrameccanica (NASDAQ:SOLO) and Hyliion Holdings (NYSE:HYLN). Down the road, Wedbush forecasts the EV market represents a $5T total addressable market over the next decade with many EV OEMs/supply chain players poised to be major winners.