B. Riley analyst Christopher Souther sees Workhorse delivering even without the Post Office
Welcome to The Fly's latest edition of "Charged," where we look back at some recent analysts' notes, news and activity in the electric vehicle and clean energy space.
WALMART INVESTS IN CRUISE: Walmart (WMT) said in a blog post that it is making an investment in Cruise, the self-driving vehicle company majority-owned by General Motors (GM). "The investment will aid our work toward developing a last mile delivery ecosystem that's fast, low-cost and scalable," said John Furner, president and CEO of Walmart U.S. "We began working with Cruise in November of last year developing a delivery pilot in Scottsdale, Arizona. We've been impressed with Cruise's differentiated business model, unique technology and unmatched driverless testing. We also value our shared commitment to a zero emissions future.
SECOND BATTERY CELL PLANT IN THE U.S.: Ultium Cells a joint venture of LG Energy Solution and General Motors, announced a more than $2.3B investment to build its second battery cell manufacturing plant in the United States. The facility will be located in Spring Hill, Tennessee. Ultium Cells will build the new plant on land leased from GM. The new battery cell plant will create 1,300 new jobs. Construction on the approximately 2.8 million-square-foot facility will begin immediately, and the plant is scheduled to open in late 2023. Once operational, the facility will supply battery cells to GM's Spring Hill assembly plant. The Spring Hill plant will use the most advanced and efficient battery cell manufacturing processes. The plant will be extremely flexible and able to adapt to ongoing advances in technology and materials.
LIMITED PRODUCTION: In a reply to a tweet inquiring about the status of Tesla's (TSLA) "Giga Texas" factory progress, Tesla CEO Elon Musk stated he sees "Limited production of Model Y this year, high volume next year." In a follow-up reply regarding the company's factory in Germany, Musk added, "Same with Berlin."
CRASH BELIEVED TO BE DRIVERLESS: Two men died after a Tesla vehicle that authorities believe was operating without anyone in the driver's seat crashed into a tree Saturday night north of Houston, The Wall Street Journal's Rebecca Elliott reported over the weekend. One of the men was in the front passenger's seat and the other was in the back seat of the Tesla, which was traveling at high speed along a curve before it hit a tree around 11:25pm local time, Harris County Precinct 4 Constable Mark Herman said in an interview.
Meanwhile, Associated Press' Tom Krisher reported that federal safety regulators have sent a team to investigate the fatal crash of a Tesla in a Houston suburb in which local authorities say no one was behind the wheel. The National Highway Traffic Safety Administration said Monday it has sent a Special Crash Investigation team to Spring, Texas, to look into the Saturday night crash of the electric car, the author notes, adding that investigators are “100% sure” that no one was driving the 2019 Tesla Model S that ran off a suburban parkway, hit a tree and burst into flames, killing two men inside.
MACH-E MADE IN CHINA OPENS FOR PRE-ORDER: Ford (F) announced that its "pioneering intelligent all-electric" Mustang Mach-E SUV, manufactured in China, has opened for pre-orders in China, with prices from RMB 265,000-379,900. The Mustang Mach-E GT First Edition will be available in GT Grabber Blue, Ford said. "In order to compete as a challenger and breakthrough in electrification, Ford China established its BEV Division dedicated to R&D, manufacture, sales and user experience of Ford electric vehicles in the country. Mustang Mach-E is also the first product launched by the new BEV Division. [...] NIO's [NIO] nationwide fast charging network will also be accessible to Mustang Mach-E users. In addition, Ford will be the first to offer 'plug-and-charge' functionality on 45,000 fast charging piles without the need for using a mobile app," Ford stated in a press release.
XPENG ANNOUNCES THE P5: Last week, XPeng Motors (XPEV) announced its third production model, the XPeng P5, which it called "the world's first production smart EV equipped with automotive-grade LiDAR technology." The P5 "will bring Navigation Guided Pilot capabilities to city roads for the first time in a production vehicle, powered by XPeng's full-stack in-house developed autonomous driving system XPILOT 3.5," the company stated. On Monday, XPeng said delivery of its P5 sedan is expected to start in the fourth quarter with reservations starting April 19. "Early bird customers will be entitled for lifetime free charging and supercharging services," according to a statement by the company.
DELIVERING EVEN WITHOUT POST OFFICE: B. Riley analyst Christopher Souther initiated coverage of Workhorse Group (WKHS) with a Buy rating and $20 price target. The analyst believes Workhorse has the potential to "gain early footing with key customers as it ramps up production and sales this year." The company will be beating to market most of the electric competition focused on the delivery space by quarters or years with its C-Series ramp expected this year, Souther told investors in a research note titled "Workhorse Can Deliver Even without the Post Office." The analyst believes the larger size cargo offers differentiation in the space relative to the smaller-volume vans coming from the large auto makers and upstarts.
BUY CHARGEPOINT: R.F. Lafferty analyst Jaime Perez initiated coverage of ChargePoint (CHPT) with a Buy rating and $29 price target. Nothing that the company is the largest provider of electric vehicle charging stations in North America, the analyst recommended ChargePoint as a long-term investment leveraged to clean transportation infrastructure and the rise in electric vehicle adoption. For the electrification of transportation to grow over the next decade, the electric vehicle industry needs to build charging infrastructure to meet the demand for charging stations both home and on the road, Perez added.
ON THE SIDELINES: Goldman Sachs analyst Mark Delaney initiated coverage of Velodyne Lidar (VLDR) with a Neutral rating and $13 price target. While the analyst acknowledges that Velodyne is an "early mover in lidar with a broad product portfolio," Delaney views the company's valuation as "reasonable but full" and expects lower long-term margins. The stock trades near the median of other lidar companies, at a premium to auto tier ones, but at a discount to leading electric vehicle/auto tech companies that have a role in advanced driver assistance systems, Delaney added.
BUY BLOOM ENERGY: JPMorgan analyst Paul Coster upgraded Bloom Energy (BE) to Overweight from Neutral with an unchanged price target of $36, citing valuation following the stock's 21% year-to-date pullback. Fuel cell and hydrogen stocks he covers are all down significantly year-to-date and in correction territory, noted Coster, who thinks "much of the selling might be a technical," including front-running the S&P Clean Energy Index rebalancing today. The analyst believes the stock is reaching levels that "should be attractive to long-term investors that were frightened off by momentum-style euphoria that prevailed in this space from November through February," and sees upcoming catalysts associated with commercial introduction of hydrogen-based electrolyzers and fuel cell systems.
MULTIPLE POSITIVE CATALYSTS: Citi analyst J.B. Lowe upgraded First Solar (FSLR) to Buy from Neutral with a price target of $100, up from $88, and opened a "90-day catalyst" on the shares. The analyst sees potential for "multiple positive catalysts" over the next several months from U.S. tax policy, U.S. trade policy and higher estimate revisions relative to production and margin outperformance. Any of the catalysts would cause First Solar shares to outperform, resulting in an attractive risk/reward proposition, Lowe told investors in a research note. If the Section 201 tariffs are extended in their current form, 2023 consensus EBITDA estimates could move 20% higher, he added.
Keywords: charged, ev, electric vehicles, clean energy, solar, batteries, bev