What happened
Stocks of many early-stage electric vehicle (EV) companies are on the move higher Thursday. Shares of China-based Nio (NYSE: NIO) and XPeng (NYSE: XPEV) were up 4.7% and 7.5%, respectively, as of 12:45 p.m. ET. After popping as much as 20%, the stock of U.S.-based Canoo (NASDAQ: GOEV) remained up 6.1% at that time.
So what
Today's gain is a continuation of a recovery in these stocks over the last several months. Nio is up 60% over the last 90 days. XPeng and Canoo haven't surged as much, but it seems aggressive investors are moving back into some of the riskier EV sector stocks. For Nio and XPeng, that has come since virus-related lockdowns in China as well as tensions from U.S. House Speaker Nancy Pelosi's visit to Taiwan have eased.
July delivery results from both Nio and XPeng helped bring more optimism to investors. XPeng is growing at a faster pace than its rival right now. Both have now delivered about 220,000 electric vehicles since launching their first products. Since the start of 2022 through July, XPeng has increased its deliveries by 108%, while Nio shipments have grown by 22% year over year.
Now what
Canoo has had its own catalysts recently. Investors had almost given up hope of its survival after it reported a net loss of $125 million in the first quarter and was down to just $104.9 million in cash and cash equivalents as of March 31. Its market cap had dropped below $500 million from nearly $2 billion in early January.
But in July it announced an agreement with Walmart, with the retail giant planning to buy 4,500 of Canoo's electric lifestyle delivery vehicles (LDVs). Just two days later, Canoo said the U.S. Army agreed to take a vehicle "for analysis and demonstration." Investors hope this could potentially result in a future business relationship.
Plenty of risks remain for each of these EV companies. But they all have potential as well. Nio and XPeng have established manufacturing facilities and have shown demand exists for their products. Some investors with the right risk tolerance seem to be ready to put more money to work in all three today.
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Howard Smith has positions in Nio Inc. and XPeng Inc. The Motley Fool has positions in and recommends Nio Inc. and Walmart Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
