Electric vehicle stocks recover, but the road may not end well

Last time we checked in with the electric vehicle sector at Data Sheet—about two years, sorry, two months, no, checks web archive, two weeks ago— things were not good.

The crowd of revenue-free startups planning to produce EVs down the road, like Fisker, Hyliion, and Lordstown, were plunging amid a growing aversion to risky stocks and concern that consumers might not be ready to go electric. Even market leader Tesla, which produces more than 1,500 electric cars a day, lost one-eighth its value, or about $50 billion.

But a couple of things have changed in November. For one, former vice president Joe Biden won the election. A component of Biden’s economic plan is to boost the green energy sector by building a huge network of charging and refueling stations for renewable energy vehicles, converting half a million buses to emission-free technology, and subsidizing consumers who want to swap a gas-powered car for an EV. Also, the mysterious committee that oversees the S&P 500 stock index finally decided to add Tesla, meaning all of the mutual fund managers running S&P 500 index funds will have to buy billions of dollars worth of the stock.

The Biden win and S&P 500 decision fueled a turnaround not just for market leader Tesla, up 14% in November, but also smaller players like three-wheeled EV maker Arcimoto, with a 47% jump this month, electric van maker Workhorse Group, up 40%, and Chinese electric SUV maker Nio, up 52%. Star car designer Henrik Fisker got a boost too. His eponymously named second-try electric car startup doesn’t have a product on the market yet, but it rose 62% this month. Electric bus maker Arrival hit the market on Wednesday via a merger with a SPAC. Expect it to shoot up for a bit too.

While the president certainly has some influence over the future of electric vehicles, some related stocks got a boost from another guy who has some influence over the stock market. Former hedge fund manager and CNBC host Jim Cramer has long been touting companies that focus on the hydrogen fuel cell-powered vehicle segment. These vehicles replace a gasoline engine with one that runs on hydrogen, which can easily be created with wind power and produces no emissions beyond water. Cramer was hammering the theme again last week, even criticizing Tesla for ignoring hydrogen. FuelCell Energy saw its stock price double since the start of the month, Plug Power is up 64%, and Bloom Energy has gained 52%

All of these stocks may get another slight boost today, after U.K. Prime Minister Boris Johnson unveiled his green energy package that includes banning gas-powered vehicles in 2030.

But this sort of coordinated movement in the EV sector is one of the classic signs of an investment bubble. As is the flood of investor cash and high valuations given to companies that don’t have any sales yet. It’s gotten to the point where Elon Musk is worth more than Mark Zuckerberg, making him the third-richest person in the world.

For now, everyone’s a winner. But as with most bubbles, it’s unlikely to last for the majority of these speculative stocks caught in the updraft.

Aaron Pressman
@ampressman
aaron.pressman@fortune.com

NEWSWORTHY

Go ask Bezos when he's ten feet tall. Speaking of big stock moves, the big pharmacy chains tumbled on Tuesday after Amazon rolled out its expanded prescription drug sales effort. It took two years after buying online pharmacy PillPack, but now Amazon is bringing its full weight to bear on cracking the market, including discounts and free delivery for Prime members.

Fanfare for the common app. In a move showing good faith with software developers, Apple on Wednesday announced it would cut its take in half, to just 15%, on sales of apps that generate less than $1 million. Apps from new developers would also get the 15% treatment. Neither condition applies to apps from Epic Games, so don't expect that lawsuit to end just yet. Nor would the change likely satisfy regulators probing the app store's policies for antitrust violations. But among those brand new developers? Marissa Mayer's new startup's new app, Sunshine Contacts. It's an effort to clean up the contact mess across our phones and other devices.

Smoke but no fire. There wasn't much news, although there were surely a few viral clips generated by Tuesday's Senate Judiciary Committee hearing. Facebook CEO Mark Zuckerberg and Twitter CEO Jack Dorsey defended their companies' actions around the election, while Republicans complained of bias and Democrats asked for stronger oversight. “All taken together, we went really quite far to distribute reliable and accurate information,” Zuckerberg said. Maybe some of the more troublesome tweets can be converted to the site's new fleets, an Instagram Stories-like feature that lets users post photos and short videos that disappear after a day.

The quickening. The movie industry is just beginning to adjust to the permanent changes wrought by the pandemic. On Tuesday, Universal Pictures became the first major studio to face the new reality, striking a deal to bring most of its films to streaming services as few as 17 days after opening in theaters. Movies making $50 million will stay exclusively in theaters for 31 days.

Exceeds expectations. The reviews are out for the three computers Apple introduced last week running its homegrown M1 processor. And the reviews are good. Harry McCracken says the new MacBook Air works just like the last one (powered by an Intel CPU) but is "much faster (and) more power-efficient." Jason Snell finds a $699 Mac Mini outperforming his $5,000 iMac Pro. And YouTube's Marques Brownlee says he used the new 13" MacBook Pro for a week without needing to plug it in.

FOOD FOR THOUGHT

Remote learning wasn't created from the pandemic. Sal Khan founded the Khan Academy to help kids learn online back in 2008. He talked to The Verge about how the massive increase in online learning needs to change how teachers teach in person.

When people get together, the teacher should act as more of an adviser. How do you unblock kids, or how do you be the conductor so that you can get kids to help each other? So the school has always been about students’ agency and the students being at the center of their learning, and that the adults are there to always help and unblock.

And that might seem like a small thing, but it’s actually a huge thing. It’s much harder and it takes a lot more sophistication than if you’re just going through the same lectures year after year. That’s always been the core principles of the school. And there’s other principles; everyone a student, everyone a teacher, learning should not be bound by time or space.

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BEFORE YOU GO

They did introduce the line with the disclaimer, "Never thought we'd print this," but still...

On the cover of the December issue of Cosmopolitan, alongside the interview of movie star Emma Roberts, is this insane statement about 2020: "Dating lessons from pandemics past. The 14th century called and it wants its sex spree back." Sadly, the story is not online yet.