GM says it doesn’t yet know what caused fires in five Chevrolet Bolt batteries but its engineers are investigating.
Tesla Inc. led the unstoppable rally in electric vehicle stocks on Thursday as the sector got more boost from investors’ optimism that the global car market will be dominated by electric cars in decades ahead.
Tesla led gains across the sector, with a 4.5% advance that brought it to an all-time high of $508.61. Lordstown Motors Corp., Electrameccanica Vehicles Corp., Nikola Corp. and Kandi Technologies Group Inc. also rose in morning trading.
A vote of confidence in the industry came from Britain, which is now looking at its growing fleet of electric cars as a way to create jobs and also balance the power grid, with Prime Minister Boris Johnson calling for phasing out cars fueled entirely by gasoline and diesel by 2030, ten years ahead of the previous schedule.
Later in the day, General Motors Co.’s Chief Executive Officer Mary Barra is expected to announce at an industry conference that GM is ready to spend more than the $20 billion on electric models by 2025 that it had previously budgeted.
The market’s eagerness to fund new EV ventures is also evident in the number of startups that are poised to get listed in the near future. On Wednesday, Bloomberg reported that Electric Last Mile Solutions was in talks to go public through a merger with Forum Merger III Corp., a special purpose acquisition company, according to people with knowledge of the matter. That news followed closely on the heels of Arrival Ltd. agreeing to combine with blank-check firm CIIG Merger Corp.
EV stocks have been on fire over the past few months on confidence that electric cars, trucks and buses will dominate the future of the auto and transportation industries. Tesla’s soaring market value, which dwarfs the combined capitalization of some of the biggest global automakers, only added to that momentum.
“Contrary to the prevalent adage of Tesla and electric vehicles eating legacy auto’s lunch,” if you sum the market capitalizations of all global carmakers from 2016 and compare them versus today’s, “we see EVs have actually expanded the total auto pie by about two times,” Evercore ISI analyst Chris McNally wrote in a note on Thursday.
Tesla, which now commands a market capitalization of $479 billion, is expected to get even bigger in recent month as its impending addition to the S&P 500 Index will results in a flurry of buying activity from money managers and other investors who closely track the benchmark.