HomeLatestWho will benefit most from Biden’s $5 Billion EV Charging Plan?
Who will benefit most from Biden’s $5 Billion EV Charging Plan?
February 14, 2022 at 8:50 am - by Kevin Flynn
Who will benefit most from Biden’s $5 Billion EV Charging Plan?
The White House needed a positive headline. Americans are tired of political infighting, troop movements in the Ukraine, and the rise and fall of covid variants. We craved something to be positive about, aside from the recent resurgence of Bitcoin (BTC). POTUS gave it to us in the form of a plan to invest $5 billion into new EV charging stations. It’s about time.
Don’t get it twisted. The announcement was timed to offset the January CPI report and pending rate hikes from the Fed. This EV plan is not new. It was one of Biden’s campaign promises. He told us yesterday he’d add 400,000 new public EV chargers by 2030. Most of them will be on interstate highways. EV companies are rejoicing. It’s premature.
Building Foundations Doesn’t Help Finish Carpenters
When new homes are built, you break ground and pour a foundation. The builders come in after that to put up beams and walls. Electricians and plumbers follow with the wiring and pipes. Are you getting the analogy? The finish carpenters, which in this case is companies like Tesla (TSLA), Rivian (RIVN), and Lucid (LCID), are the last to the party.
EV charging stations are a foundation, but with the eight-year window that was proposed by the White House yesterday, it will be a decade before EV manufacturers will reap the rewards from those. In the meantime, I’ll keep my petroleum stocks. The “big shift” to electric cars isn’t happening during this administration. Joe will be long gone when we get to that point.
That doesn’t mean we’re not making progress. Fleet services have been switching to electric vans and buses for a while now. There’s a market for those. It’s the personal conveyance vehicles that are still gas-powered. The Lucid Air was Motor Trend’s car of the year. Do you know anyone who owns one? I’ve never even seen one in my neighborhood.
Look for the Companies Building the Foundation
Keeping with the building analogy, you need to dig a hole before you can pour a foundation. EV charging stations need a certain amount of power. High-voltage direct current (HVDC) lines are the only way to get that. ABB Automation Company (ABB) is a leading provider of those. Hitachi (6501:TYO) is another. Expect both to benefit from the new push for EV charging stations.
Next on the list is the materials to build an EV charging station, particularly the metals required. They include copper, stainless steel, carbon steel, aluminum, nickel, chrome, and titanium. Take your pick. My choice in this space is BHP Mining Company (BHP). They’re up 13.44% YTD and own the Resolution Copper Project in Arizona. Watch that carefully in the next few years.
The final piece is the charging stations themselves. Tesla and Nio (NIO) are on the provider list. Elon Musk is dropping satellites from the sky. I made my money on Nio last year. SunPower Corporation (SPWR) is an intriguing choice. So is EVgo (EVGO). I put them both on my watchlist, but I’m not buying either just yet. My petroleum stocks are still going up.
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About the Author
Kevin Flynn
A former financial professional and founder of AdvisorScale Financial Writing, Kevin lives in Leominster, Massachusetts with his wife Evelyn, two cats, and nine wonderful grandchildren.
