Nikola, Solid Power, and Blink Charging experience significant surge in stock value for the week.

Nikola, Solid Power, and Blink Charging experience significant surge in stock value for the week.

Actions of Stocks of electric and hydrogen vehicles surged this week as investors took a risky approach to the market and a government official gave potentially positive news to the industry. But the rebound may not last if there are no fundamental improvements in the financial performance of these stocks.

According to data provided by S&P Global Market Intelligence, Nicholas (NASDAQ:NKLA) rose 63.6% this week, Solid power (NASDAQ:SLDP) jumped 34.6%, and Flash Loading (NASDAQ:BLNK) was up 31.4% at its peak. Shares maintained most of these gains during the short trading week and closed up 57.6%, 30.1% and 25.9% respectively.

Yellen’s Impact on Electric Vehicle Stocks

On Wednesday, Janet Yellen warned that China could sell renewable energy products like solar panels and electric vehicles to the United States, which would lower prices and potentially take market share from American manufacturers. Although nothing has been announced, his position could mean that protections could be put in place to increase tariffs on these imports, helping American manufacturers.

The electric vehicle market, in particular, is becoming extremely competitive. Chinese companies like BYD and Xiaomi are launching compelling low-cost vehicles that would likely perform very well in the United States.

Tariffs have been put in place against Chinese solar manufacturers in the past, but companies often get around these rules by manufacturing in other parts of Asia or Mexico, where costs are lower than in the US. -United. The reaction this week may have been positive, but the rebound may not last.

Paris pushed hydrogen

Hydrogen has a need a PR boost when Air Liquide announced the modernization of its hydrogen station capable of filling 500 cars per day. Although hydrogen hasn’t been popular among drivers, it could attract attention at this summer’s Olympics and Nikola is looking for all the PR it can get at this point.

There has been a push for more hydrogen vehicles and infrastructure for a decade, but that hasn’t materialized, so be wary of buying this week’s rebound.

Will the rebound last?

Each of these stocks is trading significantly below their highs and, like other stocks in the renewable energy sector, investors are wondering if we’ve bottomed out. This is why the news of a protectionist stance from the United States was considered good news this week.

The irony of Blink Charging is that more Chinese EV imports could increase adoption and the need for chargers. Whatever happens, the company is therefore well positioned to grow its revenue.

Ultimately, I think the electric vehicle, hydrogen and charging sectors are too risky to invest in now. Costs are falling and low-cost Chinese suppliers are aggressively entering the market. This happened in the solar and wind energy sector a decade ago, and few American companies survived.

Tariffs and other traditional protections won’t be enough to save U.S. manufacturers from foreign competition, and companies already losing money find themselves in a difficult position. This is why I think it is more of a speculative rebound from extremely low levels than a sign of any recovery. It is possible that this week’s winnings will be returned next week.

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Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the securities mentioned. The Motley Fool has a disclosure policy.

Why Nikola, Solid Power and Blink Charging Soared This Week was originally published by The Motley Fool

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