Lordstown Motors said it is aware of Hindenburg's short report and acknowledged that it has received an information request from the SEC
Welcome to The Fly's latest edition of "Charged," where we look at some analysts' notes, news and activity in the electric vehicle and clean energy space.
PRIVACY, SECURiTY CONCERNS: Tesla (TSLA) cars have been banned from Chinese military complexes and housing compounds due to concerns that the electric vehicle maker may be collecting sensitive data via the cars' built-in cameras in a way the Chinese government can't see or control, according to Bloomberg, citing people familiar with the matter.
Commenting on the news, GLJ Research analyst Gordon Johnson said he believes Tesla faces legal risk in China by collection data in cars and sending it to the U.S. After speaking to "on-the-ground contacts," the analyst believes Tesla may be breaching National Security Law in China by sending data obtained in China to the U.S. and Europe. And this is a "much more Draconian headwind faces Tesla," Johnson added.
Over the weekend, CEO Elon Musk said Tesla would never provide the U.S. government with data collected by its vehicles in China or other countries, The Wall Street Journal's Trefor Moss reported.
TILBURG ASSEMBLY PLANT SHUTTING DOWN: Tesla is reportedly shutting down its assembly plant in Tilburg, the Netherlands, where the company performed the final assembly process and testing for Model S and Model X vehicles, Fred Lambert of Electrek reported. "Tesla will stop 'very shortly' with assembling the Model S and Model X in Tilburg. The models were upgraded at the end of January, which changed the production process in the United States so that assembly in the Netherlands is no longer possible," a Dutch online newspaper called Nu.nl wrote, according to Lambert.
PANASONIC TO REDUCE RELIANCE ON TESLA: Panasonic (PCRFY) plans to reduce its reliance on Tesla by making batteries that are more compatible with electric vehicles from other global carmakers, The Financial Times' Kana Inagaki reported, citing comments made by outgoing Panasonic CEO Kazuhiro Tsuga. "At some point, we need to graduate from our one-legged approach of relying solely on Tesla," Tsuga, who will step down after nine years as CEO to become chairman from April 1, told the publication. "We are entering a different phase and we need to keep an eye on supplying manufacturers other than Tesla."
'ALL-IN' ON BEVS: Deutsche Bank analyst Tim Rokossa raised the firm's price target on Volkswagen (VWAGY) to EUR 270 from EUR 185, while keeping a Buy rating on the shares. The analyst believes the company is "all-in" on battery electric vehicles, or BEVs, and that the market is "finally starting to give credit" to VW's EV story. With its new EV sales target of 1M units this year, VW "should come very close to Tesla's BEV sales," Rokossa said in a research note to investors. Given the global roll-out of the ID.4, he sees "a good chance" that VW could surpass Tesla's BEV sales as soon as next year, the analyst added.
SEC REQUEST, SHORT REPORT: On Wednesday, Lordstown Motors (RIDE) reported fourth quarter losses per share of (23c), which were worse than the expected (10c). The company also said it was aware of Hindenburg's short report and acknowledged that it has received an information request from the SEC. The company has formed a special committee and will not comment on the short report any further until the committee's investigation is finalized. Additionally, Lordstown said it has plans for an electric van in the second half of 2022.
GM-BACKED CRUISE TO ACQUIRE VOYAGE: Voyage's Oliver Cameron, co-Founder and CEO, stated in a post to the company's blog that, "I am delighted to share that Voyage is being acquired by Cruise! Together, we will deliver on the promise of self-driving cars - a revolutionary technology that will enable millions to move freely, affordably, and sustainably within their communities. At Voyage, we've been laser-focused on delivering a product that benefits the lives of real people. Voyage's approach has always been to leverage our limited resources to deliver a product that restores mobility to those who need it most: senior citizens. We've made tremendous progress towards this goal, moving countless senior citizens (some as old as 92!) around their communities. Now at Cruise, we are thrilled to have the substantial resources to eventually serve not just senior citizens, but every possible demographic who stands to benefit from self-driving services." Cruise is majority owned by General Motors (GM).
FORD TRANSIT CUSTOM ALL-ELECTRIC IN 2023: Ford (F) confirmed that the next generation Ford Transit Custom range will include an all-electric model in addition to plug-in hybrid, mild hybrid and conventional engine variants. The new Custom range - which includes the Transit Custom van and Tourneo Custom people mover - goes into production in the first half of 2023, with all-electric versions of both models part of "the most extensive Transit Custom range ever offered to European customers," Ford said. "All versions of the next generation Transit Custom will be built by Ford Otosan - Ford's joint venture in Turkey - in Kocaeli, the home of the Ford Transit range. In addition, the next generation Volkswagen 1-tonne commercial vehicle also will be built in Kocaeli, adding valuable scale to vehicle platforms and enhancing the customer experience by bringing more technologies to market, faster," Ford stated.
The company added that, "Ford said in February that its entire commercial vehicle range will be zero-emissions capable, all-electric or plug-in hybrid, by 2024, with two-thirds of Ford's commercial vehicle sales expected to be all-electric or plug-in hybrid by 2030. In the interim period, however, Ford understands that not all commercial vehicle operators will make the move from the conventional internal combustion engine to all-electric vehicles in a single jump. This is why its range of powertrain technologies from mild hybrids through to plugin hybrids are essential and will continue to be a significant part of the next generation Transit Custom range."
FORD SEEN MAKING 'MORE AGGRESSIVE' SHIFT TOWARD EV: Barclays analyst Brian Johnson upgraded Ford to Overweight from Equal Weight with a price target of $16, up from $9. While the analyst has liked Ford's product cycle and profit improvement potential under an "energetic" new CEO, the lack of an "aggressive" battery electric vehicle strategy has kept him on the sidelines. However, after a deep-dive into Ford Europe and in particular its Volkswagen alliance, Johnson is more comfortable with Ford's margin improvement outlook. Ford will likely shift much more aggressively than consensus believes toward electric vehicles in the 2025-2030 period, and will likely highlight at its spring investor day a strategy centered around two dedicated platforms, Johnson told investors in a research note. Further, a Ford Europe turnaround supports margin and earnings upside, he added.
PLUG TO RESTATE FINANCIAL STATEMENTS: Plug Power (PLUG) announced that it will restate its previously issued financial statements for fiscal years 2018 and 2019 and its quarterly filings for 2019 and 2020, which will be disclosed in the Form 10-K for the year ended December 31, 2020. In consultation with KPMG, the company's independent registered public accounting firm, management and the Audit Committee of Plug Power's Board of Directors determined that the company's prior period financial statements need to be restated due to errors in accounting primarily related to several non-cash items, including the reported book value of right of use assets and related finance obligations; loss accruals for certain service contracts; the impairment of certain long-lived assets; and the classification of certain costs, resulting in a decrease in research and development expense and a corresponding increase in cost of revenue.
The revised accounting will change how the company accounts for certain transactions and items, but is not expected to impact the company's cash position, business operations or economics of commercial arrangements, Plug stated. The company added that it continues to expect to achieve its previously stated gross billings targets of $475M in 2021, $750M in 2022 and $1.7B in 2024.
Following the news, Truist analyst Tristan Richardson downgraded Plug Power to Hold from Buy with a price target of $42, down from $65, following the company's announcement of likely restatements and the disclosure of weakness in its internal controls. Richardson stated that while he has been generally constructive on Plug Power's fundamental outlook for the long-term, he expects limited opportunity for near-term outperformance following these disclosures. The analyst acknowledged that Plug reiterated long-term targets and the accounting issues appear transitory in nature. However, he sees limited upside until resolution, particularly amid a broader rerating in alternative energy-oriented equities.
STRONG RESIDENTIAL SOLAR GROWTH: Susquehanna analyst Biju Perincheril upgraded Enphase Energy (ENPH) and SolarEdge (SEDG) to Positive from Neutral with price targets of $200 and $345, respectively, as part of a broader research note titled "Positioning for Strong Resi Solar Growth." The analyst stated that the alternative energy sector has seen a recent multiple de-rating on concerns of rising interest rates, but believes that the outlook for the sector remains robust. Perincheril added that the majority of the increases in his forecasts comes from the residential sector where the company stands to benefit most, and also contended that the pullback in the sector has made valuations "more reasonable." SAIC PARTNERSHIP: Earlier on Thursday, Luminar (LAZR) announced a strategic partnership with SAIC Motor, one of China's largest automakers. Under the terms of the deal, SAIC plans to use lidar sensors and software made by Luminar Technologies to enable autonomous capabilities in a new “R brand” line of vehicles, the companies said. The R brand program is expected to begin series production with Luminar starting in 2022, with the parties’ longer-term goal being widespread standardization across all vehicle lines, Luminar added. The partnership is expected to deliver the first autonomous production vehicles in China, it further noted.
Luminar CEO Austin Russell told CNBC that the companies’ longer-term plan is to standardize the system so it can be included in a wide array of SAIC vehicles.
Meanwhile, Craig-Hallum analyst Richard Shannon initiated coverage of Luminar with a Hold rating and $24 price target. Shannon believes Luminar is likely to win near-term contracts that require its long-range,solution, but as other solutions come into market, he has doubts about its efficacy given scalability/performance/cost barriers.
'MATERIAL WEAKNESS': Velodyne Lidar (VLDR) said in it annual 10-K regulatory filing that, "We have identified material weaknesses in our internal control over financial reporting, and the failure to achieve and maintain effective internal control over financial reporting could harm our business and negatively impact the market price of our common stock. Our management determined that, as of December 31, 2020, we did not maintain effective internal control over financial reporting. During the year, management identified a material weakness related to our process and controls over tracking and reporting whistleblower complaints and litigation matters that was remediated in the fourth quarter. In addition, management identified a material weakness in connection with our failure to adequately review revenue schedules associated with non-standard revenue arrangements, which resulted in misstatements of revenue and deferred revenue for the three months ended December 31, 2020. These misstatements have been corrected as of year-end. We are working to remediate the remaining material weakness and have taken and continue to take steps that we believe will address the underlying causes."