Hydrogen Truck Maker Nikola Leads EV Stock Rally As Biden Cuts Off Russian Oil

President Joe Biden said the U.S. was cutting off imports of Russian oil because of its invasion of Ukraine, which led to a big stock market gain for electric vehicle makers.

In afternoon trading today, shares of the Phoenix-based company rose about 17% to $7.73, while shares of the Seattle-based company, which makes fuel cells that convert hydrogen into electricity, and the Norway-based company, which makes electrolyzers needed to produce hydrogen, surged The world's most valuable automaker,Tesla, gained 4% while newer makers of battery-powered autos, including Fisker and Rivian, also gained. Cummins, which is developing hydrogen-powered systems for truck manufacturers, was up 4% in afternoon trading.

Jeffrey Osborne, an equity analyst for Cowen, said investors appear to be shifting to renewable power stocks due to spiking oil prices. Hydrogen may benefit from that volatility.

With elevated diesel prices and a focus on more renewable power around the world, that opens the door for green hydrogen in a bigger way.

The company won't begin commercial production of hydrogen-fuel Tre FCEV trucks until 2023, so any bet on the company is a long-term investment. Two prototype vehicles that the company says can go more than 500 miles between fuelings were used to haul beer for the company. The supply of hydrogen made from low- or no-carbon sources, such as water and renewable power, remains in short supply because of the cost of high-powered fuel cell systems and storage tanks. It will take a year or more for production of the clean fue to be increased.

The price of crude oil went up after Biden said the U.S. would stop buying Russian oil. The average price of a gallon of regular gasoline in the US rose about 11 cents. Motorists in California are paying an average of $5.44 a gallon.

Dan Ives, an equity analyst for Wedbush Securities, said that the gains for EV makers is a knee-jerk reaction in the midst of $4-plus gasoline.

There is some bargain hunting going on after the massive selloff of electric vehicle companies.