EV stocks get a broad boost from VW's purchase of 5% stake in XPeng

By Tomi Kilgore

Rivian's stock climbs toward a 7-month high, while Tesla shares buck the trend with a decline

Shares of electric-vehicle makers got a broad boost Wednesday, bucking the weakness in the broader stock market, as investors cheered Volkswagen AG's $700 million investment in China-based XPeng Inc.

Also providing support for the EV sector, a group of global automakers said they were working together to build a high-powered charging network that will be accessible to all EV owners. That also appeared to help the shares of EV-charging companies.

XPeng's (XPEV) stock led the charge higher, rocketing 26.9% in afternoon trading to put it on track for an 11-month closing high.

The rally comes after Volkswagen said it would take a 4.99% stake in XPeng. The investment comes with a cooperation pact between the VW brand and XPeng, which will provide for the development of two VW electric models customized for China's EV market.

Among XPeng's China-based rivals, shares of Nio Inc. (NIO) shot up 9.6% toward a seven-month high, Li Auto Inc. (LI) shares climbed 3.2% toward a one-year high and BYD Co.'s stock tacked on 2% toward an 11-month high.

Meanwhile, shares of Texas-based Tesla Inc. (TSLA), which generated 23% of its second-quarter revenue from China, were an outlier as they slipped 0.5%.

Among other U.S.-based EV companies, Rivian Automotive Inc. (RIVN) shares ran up 6.4% toward a seven-month high.

Meanwhile, Nikola Corp. (NKLA) shares leapt 9.4% after tumbling 19% over the past two days. Fisker Inc.'s (FSR) stock rose 2.6% after sinking 15% over the past four sessions and Lion Electric Co.'s (LEV) stock tacked on 1.7% after giving up 5.3% in the past two days.

The rallies come as the Nasdaq Composite Index fell 0.4% and the S&P 500 slipped 0.2%.

Separately, seven automakers -- BMW Group , General Motors Co. (GM), Honda Motor Co. (7267.TO), Hyundai Motor Co. , Kia Corp. , Mercedes-Benz Group AG and Stellantis NV (STLAM.MI) -- are creating a joint venture to make EV charging more accessible.

The joint venture will develop a charging network with at least 30,000 chargers that will be accessible to all battery-powered vehicles, whether they use the North American Charging Standard (NACS), which is used by Tesla, or the Combined Charging Systems (CCS).

Among EV-charging companies, shares of ChargePoint Holdings Inc. (CHPT) tacked on 0.9%, EVgo Inc. (EVGO) edged up 0.3% and Blink Charging Co. (BLNK) advanced 1.8%.

-Tomi Kilgore

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07-26-23 1421ET

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