Why the Infrastructure Act is making these 3 stocks soar today

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What happened

House spokeswoman Nancy Pelosi has set Thursday as the date for a House vote on the $ 1 trillion bipartisan infrastructure bill. She has expressed confidence that it is over and as a result, three alternative energy stocks are soaring today. From 2 p.m. EDT, XL fleet (NYSE: XL), Hyliion stocks (NYSE: HYLN), and Clean energy fuels (NASDAQ: CLNE) moved as follows:

  • XL Fleet rose 10.9%.
  • Hyliion gained 8.7%.
  • Clean Energy Fuels rose 10.2%.

so what

The proposed Infrastructure Act spans several areas aimed at spurring and accelerating growth in the electric vehicle sector as well as other alternative energy solutions. That support could fuel the growth plans of companies like XL Fleet, Hyliion and Clean Energy Fuels.

Image source: Hyliion.

XL focuses on the electrification of class 2-6 commercial vehicles, the sizes of which range from commercial vehicles to medium-heavy commercial vehicles. Hyliion covers the larger commercial truck fleets by providing electrified drivetrains for class 8 tractor units. Clean Energy Fuels is working to promote the use of renewable natural gas as a fuel for transport. All three benefit from the passage of the proposed Infrastructure Act.

What now

The proposed law covers several areas from which each of these companies would benefit. US $ 39 billion is earmarked for the modernization of local public transport. This includes replacing thousands of rail and bus fleets with zero-emission models, according to a CNN report. Separately, $ 7.5 billion will be allocated to zero-emission and low-emission buses, some of which are aimed at increasing the use of electric school buses. Another $ 7.5 billion would go towards building a nationwide network of electric vehicle chargers.

Both XL Fleet and Hyliion need this charging infrastructure to help customers convert commercial fleets to plug-in hybrid or fully electric vehicles. XL Fleet, for example, got in touch with the owners of. teamed up UBS Arena in New York City to investigate how the arena where the NHL’s New York Islanders play is being expanded to include 1,000 charging points. The arena is strategically located in relation to New York City’s two main airports, and the company intends to use the property for loading fleets of trucks during off-peak hours as well as for customers parking there at events.

Hyliion expects to begin realizing revenue for its hybrid truck electric propulsion solution before the end of 2021. Clean Energy Fuels takes a different approach to reducing CO2 emissions from commercial vehicles. It supplies RNG to modified engines, which are considered completely carbon-free as the natural gas is made from organic waste from dairy farms, sewage treatment plants and landfills.

All of these deals would get a chance with significant additional federal spending that would come from pending infrastructure legislation. Of course, investors shouldn’t just bet on a political outcome. Although these companies all carry high risks, the trend towards electrifying transport and using clean alternative energy appears to be a trend that will continue. Investors with a sufficiently long time horizon and willingness to take risks may be interested in these companies regardless of how the vote on the bill ends.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.


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