This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
What happened
Although it won't be the direct beneficiary of a big pile of federal spending on electric vehicle (EV) infrastructure, Tesla, Inc. (NASDAQ: TSLA) attracted quite a few bulls on Thursday. On news of a sprawling (and expensive) project to build out EV charging stations throughout the U.S., shares of the popular EV maker inched 0.4% higher. That was in favorable contrast to the more than 1% slump of the S&P 500 index on the day.
So what
On Wednesday, President Biden announced that the federal government would disburse $900 million to 35 U.S. states to establish a network of EV charging stations. That funding will be part of the $1 trillion Bipartisan Infrastructure Law passed last year.
The following day, investors sensibly plowed into stocks of companies directly or closely involved with charging infrastructure -- ChargePoint Holdings and Blink Charging were obvious plays, among others.
The knock-on effects of this big initiative are also obvious for the companies that manufacture the EVs themselves, and Tesla is the top selection among this crowd. The bellwether for the segment is a pure-play, in contrast to domestic incumbents like General Motors and Ford, which are currently in the midst of fairly long-tail transitions away from internal combustion engine (ICE) vehicles.
Now what
A heaping pile of money for charging stations isn't an automatic knock-on win for Tesla, to be sure. Investors are well aware that General Motors, Ford, and the other incumbents aren't going to let the company own the EV segment. We can say the same for up-and-coming rivals such as China's Nio.
So yes, this latest development is good for Tesla. Let's see how effectively the company can ride it.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
