Here’s why electric vehicle stocks are hot

The popularity of the electric car industry is booming, after slowly expanding for years, with investors taking advantage of the positive sentiment on this growing market. The electric vehicle (EV) market is now offering many new opportunities and growth, with new players and upcoming innovations around the corner.

Most investors know about Tesla, but there is more to this sector than car manufacturers. If you’re not interested in trading big electric vehicle manufacturers like Tesla, but you still want to take advantage of electric vehicle stock, you can turn to smaller companies in different sub-sectors, like lithium batteries providers or fintechs. Thanks to the recent EV trend, some penny stocks within the sector have gone wild. Blink Charging Co. (NASDAQ: BLNK), for instance, went from a low of around $2 in 2020 to a high of more than $55 in 2021!

Of course, not all penny stocks are going to perform that well, but this electric vehicle is a hot sector and some stocks are moving quickly to reflect important news in the market…and you can take advantage of this high volatility. You just need to learn the ins and outs of penny stock trading to make the most of it. Check this guide to learn more.

So, why are EV stocks so popular right now?

Growth prospects: Consumer spending on electric vehicles keeps rising

According to the latest report about trends and developments in electric vehicle markets from the IEA, “more than 10 million electric cars were on the world’s roads in 2020”. It’s a 43% increase from 2019, which makes 2020 a record year. For the first time, Europe is the biggest market, overtaking China.

Despite the pandemic, there is strong momentum in the electric vehicle market that should keep supporting growth over the next few years. According to the IEA, EVs could account for 7% of the road vehicle fleet, with 145 million cars used by 2030.

Increased government support for EVs to help reach their climate goals

With all the recent extreme weathers events we’ve seen around the world, like the heat dome in Canada and massive flooding in Germany and Belgium, governments increasingly need to take action to fight the impact of climate change. One way to tackle climate change is to incentivize people to buy EVs, as they are becoming an increasingly important tool to meet global goals on climate change. A large part of the observed increased electric car registration numbers is due to governments around the world providing incentives to buy EVs and other supportive regulatory frameworks.

Final words

The EV sector isn’t new, but it seems to have recently gained momentum that investors want to take advantage of, whether that be through large, well-known companies like Tesla or smaller players. China and many European countries are offering generous incentives to support the use of EVs, while the rest of the world is catching up, which should help the sector to keep rising over the coming years. Not to mention that innovation will continue to improve electric performance and improve the EV offering, attracting more and more users.