Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.
From the hotly-debated high-flier Tesla, Wall Street's newest darling Rivian, traditional-stalwarts turned EV-upstarts GM and Ford to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with "Charged," a weekly recap of the top stories and expert calls in the sector.
CALIFORNIA PLANNING SUIT AGAINST TESLA: Tesla (TSLA) said on Wednesday the California Department of Fair Employment and Housing intends to file a lawsuit against the company alleging systematic racial discrimination and harassment. The lawsuit appears to be focused on alleged misconduct at its factory in Fremont, California, between 2015 and 2019, Tesla said in a statement. Tesla said, "Tesla strongly opposes all forms of discrimination and harassment and has a dedicated Employee Relations team that responds to and investigates all complaints. We also have a Diversity, Equity, and Inclusion team whose work is shown in this public report. Tesla has always disciplined and terminated employees who engage in misconduct, including those who use racial slurs or harass others in different ways. We recently rolled out an additional training program that reinforces Tesla's requirement that all employees must treat each other with respect and reminds employees about the numerous ways they can report concerns, including anonymously. Above all, Tesla continues to seek to provide a workplace that is safe, respectful, fair, and inclusive -all of which are vital to achieving our mission." Once the DFEH files its lawsuit, Tesla said it will be asking the court to pause the case and take other steps to ensure that facts and evidence will be heard.
TESLA RECALL: Tesla is recalling 26,681 2021-2022 Model 3, Model S, Model X, and 2020-2022 Model Y vehicles, as a software error may cause a valve in the heat pump to open unintentionally and trap the refrigerant inside the evaporator, resulting in decreased defrosting performance, according to a notice posted on the NHTSA's website. Tesla will perform an over-the-air software update, free of charge, the NHTSA said. Tesla said it was not aware of any injuries or crashes related to the recall.
SUPPLY CHAIN EXECUTIVES: Nikola's (NKLA) supply chain department is "intact" and continues to hire, the company said on Tuesday in response to Electrek's report stating the company hit a pause on hiring amid executive exits, Reuters reported. "The supply chain department has been intentionally strengthened with new and existing leadership," the company said. "Nikola is focusing its efforts on getting its first BEVs and FCEVs to market and continues to hire strategically for critical roles." According to Eletrek's report, Nikola lost almost its entire supply-chain leadership over the past few months, including: Matthew Jenkins, director of supply chain and purchasing; Mike Chaffins, global head of supply chain; and Mike Gallagher, director of purchasing. Reuters verified the news of the departures by checking the executives LinkedIn profiles.
FORD NOW SHIPPING E-TRANSIT: Ford (F) E-Transit, the first of two all-electric vehicles "purpose-built" for Ford Pro commercial customers, is now shipping across the U.S., Ford Motor announced. "The popular E-Transit already has more than 10,000 orders from businesses of all sizes and Ford is working on ways to increase production. The all-new E-Transit is produced at Kansas City Assembly Plant - Ford's first U.S. plant to assemble both batteries and all-electric vehicles in-house," the company stated in a press release. "E-Transit is part of Ford's more than $30 billion investment in electrification through 2025. It is Ford's most recent electric vehicle, following Mustang Mach-E. F-150 Lightning and F-150 Lightning Pro deliveries begin this spring. By the end of next year, Ford will have the global capacity to produce 600,000 battery electric vehicles annually, which includes 200,000-plus Mustang Mach-E SUVs and 150,000 F-150 Lightning trucks. Ford is now working on ways to increase E-Transit production. Demand is strong, with more than 300 customers placing orders for 10,000-plus E-Transit vans," Ford added.
AMAZON DEAL: In a regulatory filing, Velodyne Lidar (VLDR) disclosed that the company and Amazon (AMZN) entered into a transaction agreement, pursuant to which, among other things, Velodyne agreed to issue to Amazon.com NV Investment Holdings, a wholly owned subsidiary of Amazon, a warrant to acquire up to 39,594,032 shares of the Velodyne's common stock. "The vesting of the warrant shares ... is based on discretionary payments made by Amazon, whether made directly from Amazon, its affiliates or by a third party on behalf of Amazon, pursuant to existing commercial agreements between the company and Amazon or its affiliates, which relate to the use of the company's technology to continue to improve the customer experience, any possible future commercial agreements between the company and Amazon or its affiliates, and the anticipated entry into an agreement between the company and Amazon or its affiliates related to the use of the company's technology," the filing stated.
RARE OPPORTUNITY: "Rapid adoption" of electric vehicles around the world and "booming" sales have presented China's electric vehicle makers a "rare opportunity" to not only take a sizable market share of the domestic auto market, but also build a dominant position around the world, Barclays analyst Jiong Shao told investors in a research note. The analyst believes electric vehicles and smart cars are among China's top national priorities. Not only is China the world's largest auto market, its auto industry accounts for over one-third of the global automotive profit, Shao pointed out. The analyst thinks China "has one of the most supportive and well-thought-out government policy agendas" for the electric vehicle industry. With this as a backdrop, Shao initiated coverage with an Overweight rating on the three leading Chinese electric vehicle makers, namely Li Auto (LI), Nio (NIO) and XPeng Motors (XPEV), with price targets of $38, $34 and $45, respectively.
EV TRANSITION LIMITS PROFIT GROWTH: Nomura analyst Anindya Das downgraded General Motors (GM) to Neutral from Buy with a price target of $56, down from $66. The analyst cited a revised earnings outlook as the analyst lowered the procurement and R&D cost savings from GM's proposed alliance with Honda (HMC) in North America and assumes accelerated electrification investments and volume model launches of margin-dilutive EVs to comply with the EPA's revised greenhouse gas standards, which were set to be stricter than Das' expectations. Based on the company's 2022 guidance, Das now expects GM to largely recover from the semiconductor chip shortages by the third quarter of 2022, which is pushed out a quarter from his prior expectation. Against this backdrop, and also based on GM's commentary with its fourth quarter results, Das now expects GM to reinvest cash into building its EV and Cruise AV businesses, while dialing back on shareholder returns, which would be "a prudent strategy," but also one that caps the outlook for near-term shareholder returns.
Meanwhile, Morgan Stanley analyst Adam Jonas also downgraded General Motors to Equal Weight from Overweight with a price target of $55, down from $75. The analyst sees a "less clear path to realization" of GM's sum-of-the-parts valuation after its fiscal 2022 guidance came in below his estimates. Jonas changed his valuation methodology for GM from sum-of-the-parts to discounted cash flow, which drives the reduced price target. He now expects GM to "remain one holistic company" for at least the next 12-18 months as management builds out its electric vehicle, autonomous vehicle and connected car capabilities. Further, the analyst still has concerns around the company's shift from internal combustion engine to electrification.
ON THE SIDELINES: UBS analyst Chris Snyder initiated coverage of QuantumScape (QS) with a Neutral rating and $18 price target. The analyst is positive on the company's leading position in solid-state battery technology that is looking to disrupt a $300B market as well as its auto OEM relationships, though he is still awaiting QuantumScape's checkpoints on commercialization.
ONGOING STRONG EXECUTION: Craig-Hallum analyst Eric Stine upgraded Enphase Energy (ENPH) to Buy from Hold with a $241 price target. The analyst argued that Enphase Energy "emphatically" demonstrated its market leadership and ongoing strong execution as it posted fourth quarter results ahead of expectations and guided first quarter above estimates while navigating current market challenges. Stine continues to view Enphase as best-in-class but was sidelined with a Hold due to valuation.
STRONG FINANCIAL PERFORMANCE: Bank of America analyst Julien Dumoulin-Smith upgraded Bloom Energy (BE) to Buy from Neutral with a price target of $29, up from $28, following what he called an "uncharacteristically strong year-end financial performance," arguing that the company's margin improvement is the "most tangible manifestation of the turnaround." The solid near-term performance raises his confidence in the company's update multi-year outlook and the fourth quarter revenue and "record" acceptances of systems set the stage for "a series of favorable updates heading into FY22," Dumoulin-Smith added.
Tesla
+35.4 (+4.12%)
Nikola
+0.48 (+6.17%)
Ford
+ (+0.00%)
Velodyne Lidar
+0.13 (+3.23%)
Amazon.com
+95.05 (+3.10%)
Li Auto
+0.475 (+1.69%)
Nio
+0.26 (+1.08%)
XPeng
+0.595 (+1.60%)
General Motors
-0.07 (-0.14%)
Honda
+0.09 (+0.30%)
QuantumScape
+0.68 (+4.28%)
Enphase Energy
+3.72 (+2.55%)
Bloom Energy
+1.39 (+8.22%)