Li Auto, Nio and Xpeng announced vehicle delivery results for July
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.
TESLA RESULTS: Tesla reported quarterly results last week, with second quarter non-GAAP earnings per share coming at $1.45 and revenue at $11.96B, both better than the expected 96c and $11.21B, respectively. Tesla said: "In the second quarter of 2021, we broke new and notable records. We produced and delivered over 200,000 vehicles, achieved an operating margin of 11.0% and exceeded $1B of GAAP net income for the first time in our history. Supply chain challenges, in particular global semiconductor shortages and port congestion, continued to be present in Q2. The Tesla team, including supply chain, software development and our factories, worked extremely hard to keep production running as close to full capacity as possible. With global vehicle demand at record levels, component supply will have a strong influence on the rate of our delivery growth for the rest of this year."
The company also said that, "We plan to grow our manufacturing capacity as quickly as possible. Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries. In some years we may grow faster, which we expect to be the case in 2021. The rate of growth will depend on our equipment capacity, operational efficiency, and the capacity and stability of the supply chain. We have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses. We expect our operating margin will continue to grow over time, continuing to reach industry-leading levels with capacity expansion and localization plans underway."
SECURITIES FRAUD SCHEME: Audrey Strauss, the United States Attorney for the Southern District of New York, and Phillip R. Bartlett, Inspector-in-Charge of the New York Division of the United States Postal Inspection Service, announced last week the unsealing of a criminal indictment charging Trevor Milton with securities and wire fraud in connection with his scheme to defraud and mislead investors about the development of products and technology by the company he founded, Nikola (NKLA). Manhattan U.S. Attorney Audrey Strauss said that, "As alleged, Trevor Milton brazenly and repeatedly used social media, and appearances and interviews on television, podcasts, and in print, to make false and misleading claims about the status of Nikola's trucks and technology. But today's criminal charges against Milton are where the rubber meets the road, and he now will be held accountable for his allegedly false and misleading statements to investors."
U.K. FACTORY: Rivian, the EV maker backed by Amazon (AMZN) and Ford (F), is in talks with ministers about building a giant factory in the U.K. that could include a big state support package, Sky News' Mark Kleinman reported. Sky News has learnt that Rivian has been in secret negotiations with the British government for weeks about the construction of a plant near Bristol.
DELIVERIES: Over the weekend, Li Auto (LI) announced that the company delivered 8,589 Li ONEs in July 2021, crossing the 8,000-vehicle milestone for the first time while hitting a new record. The deliveries were up 11.4% month over month and 251.3% year over year, a remarkable rate of growth. As of July 31, 2021, total deliveries in 2021 reached 38,743, bringing cumulative deliveries of Li ONE to 72,340 since its market debut. The company also said it is accelerating the expansion of its direct sales and servicing network. As of July 31, 2021, Li Auto had 109 retail stores in 67 cities, as well as 176 servicing centers and Li Auto-authorized body and paint shops operating in 134 cities.
Meanwhile, Nio (NIO) has announced it delivered 7,931 vehicles in July, representing a 124.5% year-over-year growth. The deliveries consisted of 1,702 ES8s, the company's six-seater or seven-seater smart electric SUV, 3,669 ES6s, the company's five-seater smart electric SUV and 2,560 EC6s, the company's five-seater smart electric coupe SUV. As of July 31, cumulative deliveries of the ES8, ES6 and EC6 reached 125,528 vehicles.
XPeng (XPEV) also announced its vehicle delivery results for July. For this month, XPeng recorded its highest-ever monthly deliveries of 8,040 Smart EVs, representing a 228% increase year-over-year, and a 22% increase over last month. Deliveries in July consisted of 6,054 P7s, the company's sports smart sedan, and 1,986 G3s, its smart compact SUV. As of July 31, year-to-date total deliveries of the company reached 38,778 units, representing a 388% increase year-over-year.
SOLID-STATE EV BATTERY DEVELOPMENT RAMPS UP: Shares of QuantumScape (QS) were on the rise on Wednesday after the company reported quarterly results. The Volkswagen (VWAGY)-backed startup announced deeper than expected losses for the quarter as it ramps up development of solid-state EV batteries. Losses widened to (12c) per share from (6c) a year ago, with consensus at (7c), as research and development expenses almost tripled to $36.8M. QuantumScape also said that, "we are excited to announce that we have made and are currently testing our first 10-layer cells." "We had set ourselves the goal of showing results from 10-layer cells by the end of 2021, so we are encouraged that we have the first 10-layer cells this early. This reflects a rapid rate of progress over the last few quarters, with single-layer results in December, followed by four-layer results in February, and now 10-layer cells in July. We will seek to continue to improve the performance of the 10-layer cells through the rest of 2021, including ongoing improvements to the quality, consistency, and throughput of our separator, demonstrate several dozen layers in 2022 and produce test cells for vehicles on our QS-0 pre-pilot production line in 2023... Our longer-term targets remain unchanged - we aim to deliver prototype samples in commercially relevant form factors to automotive OEMs from our engineering lines in 2022, provide cells for R&D test cars from QS-0 in 2023 and enter commercial production in 2024-2025."
BUY CHARGEPOINT: DA Davidson analyst Matt Summerville initiated coverage of ChargePoint (CHPT) with a Buy rating and $30 price target. The company possesses the largest active charging port count in North America as well as an emerging presence in Europe, the analyst told investors in a research note. Summerville also pointed out that ChargePoint is among the "best-positioned" names to capitalize on strong demand for EV charging infrastructure with a portfolio of "easy-to-use" solutions and "attractive" recurring revenue opportunities.
LEADING MARKET POSITION: Evercore ISI analyst James West initiated coverage of EVgo (EVGO) with an Outperform rating and $18 price target. With 800 DC fast charging sites across the U.S., EVgo has a leading market position in a DCFC market and the company also has a differentiated business model building dedicated fleet charging stations that experience higher utilization rates and leveraging its proprietary data to select premier charging locations, West told investors.
POSITIVE COMMENTARIES ON DEMAND, PRICING: Susquehanna analyst Biju Perincheril upgraded First Solar (FSLR) to Positive from Neutral with a price target of $120, up from $89. The analyst cited management's "positive commentaries" on module demand and pricing on the second quarter earnings call. Average selling prices for new bookings appear to be stabilizing due in part to an increase in c-Si panel prices and c-Si supply disruption concerns, Perincheril told investors in a research note. Although First Solar's margins will continue to contract both this year and in 2022 as price declines outpace cost improvements, its margin trajectory will reverse starting in 2023 and continue into 2024, he added.