Xi Jinping’s plan to become carbon-neutral by 2060 for ChinaOctober 5, 2020
Investors should also note that the Chinese company benefits from the popularity of EVs and renewable energy projects in that country
Another day, another winner in the renewable energy space. On Friday morning it is CBAK Energy Technology (NASDAQ:CBAT) charging forward. Headlines earlier this week, as well as brand-new legislation, have CBAT stock soaring 150%.
What exactly is CBAK Energy Technology? To start, the company focuses on developing and selling lithium-ion batteries for electric cars, buses and a variety of tools. It calls China its home, but it has operations in the United States, Israel and Europe as well. That description alone should tell you just why CBAT stock is so hot today.
It appears as if this massive rally comes on the back of similar moves in SPI Energy (NASDAQ:SPI) and Sunworks (NASDAQ:SUNW). Everything started when SPI Energy, a solar company, announced it would be launching EdisonFuture, an EV subsidiary. Sunworks soared yesterday on speculation it could do the same, and CBAK Energy is the next beneficiary.
However, CBAK Energy stands out even more. Why? The company already is a player in the electric vehicle market thanks to its battery tech. Although the moves higher in CBAT stock come without press releases or U.S. Securities and Exchange Commission filings, it is clear investors are hopeful CBAK Energy will be next in line with a big announcement.
Investors should also note that the Chinese company benefits from the popularity of EVs and renewable energy projects in that country. CBAK Energy announced just last week it won a supply deal to work on smart-home technology with Haier. The company is eager to take its lithium-ion expertise and explore other market segments like home appliances.
Why CBAT Stock Is Soaring Today
There is another key reason CBAK Energy is soaring today. Underneath all of the recent activity in micro-cap renewable energy companies is a big megatrend. Consumers care more than ever now about the environment, and investors are recognizing that with their buying decisions. Plus, former Vice President Joe Biden has promised to support clean energy initiatives if he ends up in the White House.
Thursday afternoon saw another piece of legislation that supports CBAT stock and its peers. The House of Representatives voted to pass the Clean Energy and Jobs Innovation Act — a bill that broadly promises to fight climate change. Part of the legislation will fund research and development programs for solar, hydroelectric and geothermal power. For CBAK Energy, investors likely see this legislation as an indicator of future government support, potential tax breaks and broad shifts in consumer demand.
As with Sunworks yesterday, be especially careful. CBAT stock is on fire, but its market capitalization still comes in below $100 million. However, any actual news could change that.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.
With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
With an Engineers degree in Advanced Database Management and Information Security, Sandesh brings the deep understanding of the digital world to the table. His articles reflect the challenges and the complexities that come along with every disruption in the industry. He carries over six years of experience on working with websites and ensuring that the right article reaches the right reader.