What happened
Rivian Automotive (RIVN 1.85%) escaped the carnage that was Friday's stock market, with its shares rising in price by nearly 2% against the S&P 500 index's 1.5% drop. A new mandate from one of the most populous and prominent states in America was a big reason for the increase.
So what
New York Governor Kathy Hochul announced that the state is mandating all new cars, SUVs, and pickup trucks sold there must be zero-emissions models, such as the electric vehicles (EVs) Rivian makes. The deadline is the start of 2035.
New York is the most populous and densest big city in the U.S. Thus, it still has a high level of emissions to cut. In an official statement on the state government's official website, Hochul emphasized that New York aims to lower its greenhouse gas output 85% by 2050.
The state will get there with the help of "sweeteners," Hochul added. "With sustained state and federal investments, our actions are incentivizing New Yorkers, local governments, and businesses to make the transition to electric vehicles."
New York's move comes on the heels of a similar initiative from its West Coast counterpart, California. Last month, the Golden State approved a rule stipulating that all cars and light trucks sold within its borders are to be zero-emission models.
Now what
This is all sweet music to the ears of Rivian investors and shareholders of other EV manufacturers, as the legislative environment continues to develop in their favor.
While we can expect more states to follow California and New York's lead, investors should exercise caution here. The EV segment is still relatively young, and competition is only intensifying, with both incumbents and determined upstarts vying to carve out share.
