Biden’s green vehicle initiative lifts EV makers, and their bets on the future

Automakers and pure play electric vehicle makers got a boost this week by President Joe Biden’s “Buy American” plan.

Video Transcript

SEANA SMITH: Hey, Dan, I also want to ask you about Tesla, because that stock also off just around 2% today. Bears are pointing to the miss that they reported on earnings about that they reported lower margins. Why doesn’t this worry you at all?

DAN IVES: It’s a golden age for EVs. And I know we’ve talked about it before, but it’s 3% penetration in terms of EVs, globally going to 10% next three to four years. China firing on all cylinders. And I think you’re seeing, not just for Tesla, but the likes of NIO, Xpeng, and others.

And then when you look at a Biden administration coming in, I think a doubling down on tax credit restoration to Tesla and GM, this is really just the start of what I believe could be a million vehicles plus delivered for Tesla in 2022. They’re going to be conservative out of the gate for deliveries. But I think it’s a sandbag special in terms of guidance.

ADAM SHAPIRO: What about this effort by the federal government to switch over to the fleet all new purchases being electric vehicles? I mean, are we going to see– remember how it was K-cars in the 1980s? Are we going to see Nissan Leafs, because I can’t imagine government folk driving Teslas?

DAN IVES: Well, and I think when you look at this government initiative, it’s really the broader green initiative that we’re seeing. And of course, GM just drove into the deep end of the pool going full EVs by 2035. And I think what you’re really going to see is a massive shift within the US, not just on the government side, but within consumer demand.

But a lot of it’s driven from a Biden and a blue Senate, green across the board, and that disproportionately benefits the likes of Tesla, GM. But it’s also why you have that company in Cupertino, Apple, they’re not going to look at EVs from the outside looking in. I believe in the next six to nine months, they announce an EV partnership with the likes of Tesla, VW, Hyundai, or potential one of the big three.

SEANA SMITH: Hey, Dan, when we got the info out from Biden saying that he wants to move this whole– the fleet to EVs, this whole initiative that he launched, he didn’t give a timeline. Does that matter?

DAN IVES: Well, I think they don’t want to put themselves sort of back against the wall in terms of a time frame. I mean, we talk about 2030 in terms of supercharger network potentially building out 500k, but I think they still need to double click and figure out to make sure they do a time horizon that they don’t miss. There’ll be a lot of speculation on that. And I think over the next, call it, three to six months, it’s going to be a more concrete plan.

But I think it’s going to be multifaceted. The restoration of tax credits to Tesla and GM, that’s significant, especially for Tesla in terms of US demand, more tax incentives in terms of factory build outs, and then the supercharger build outs. And I believe a year from now, we’re sitting here, we have more foreign EV manufacturers coming into this country, and I think that’s going to be a big part of job growth in terms of the EV environment.