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 NOW ACCEPTING BITCOIN AS PAYMENT: Tesla (TSLA) CEO Elon Musk said last week via Twitter, "You can now buy a Tesla with Bitcoin. Tesla is using only internal & open source software & operates Bitcoin nodes directly. Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency. Pay by Bitcoin capability available outside US later this year."
Commenting on the news, Wedbush analyst Daniel Ives said he was not expecting bitcoin payment to go live until the second half of this year. Ives believes this is a seminal moment for Tesla and for the crypto world, with Musk now cutting the red ribbon on Bitcoin transactions within the broader Tesla ecosystem. The analyst expects less than 5% of transactions to be through Bitcoin over the next 12 to 18 months. However, this could move higher over time as crypto acceptance starts to ramp over the coming years, he added. In a nutshell, Tesla accepting bitcoin as a form of payment for its products/cars is a potential game changing move for the use of Bitcoin from a transactional perspective, Ives contended.
PATENT FOR LIDAR SYSTEM: One patent of the dozens granted to Apple (AAPL) recently covered "Waveform design for a LiDAR system with closely spaced pulses," UBS analyst David Vogt wrote in a research note on Wednesday, citing his own review of U.S. issued patents. The patent makes eight claims involving an optical device comprised of a light source, at least one scanning mirror, a detection sensor, as well as other characteristics to collect the light, Vogt said.
Although Apple has not made a formal announcement around its plans in the battery electric vehicle and autonomous vehicle market, the analyst believes the patent "serves as a reminder that Apple is allocating resources to projects that have yet to be commercially introduced and are likely not being valued by the market." Light detection and ranging, or LiDAR, is one of many technologies being pursued by both public and private companies to develop autonomous vehicles, he added. The analyst finds it notable in Apple's patent file a brief discussion of the "distance to the target scene may range from tens of centimeters to hundreds of meters." Industry experts have noted being able to detect objects at distances of several hundred meters is a critical milestone for truly autonomous deployment given the likely safety and regulatory hurdles, Vogt added.
NIO TO SUSPEND PRODUCTION: NIO (NIO) announced last week that the company decided to temporarily suspend the vehicle production activity in the JAC-NIO manufacturing plant in Hefei for five working days starting from March 29 due to semiconductor shortage. The overall supply constraint of semiconductors has impacted the company's production volume in March. The company expects to deliver approximately 19,500 vehicles in the first quarter, adjusted from previously released outlook of 20,000 to 20,500 vehicles.
BATTERY PACK ASSEMBLY CAPACITY: Ford (F) announced it is "continuing to invest in an electrified future" for its Valencia, Spain, operations with the new 2.5-litre Duratec hybrid engine that will be built at its engine plant from late 2022 and increased battery pack assembly capacity. From late 2022, Valencia Engine Plant will build the 2.5-litre Duratec hybrid engine for Europe, which powers the Kuga PHEV as well as the Kuga, Galaxy and S-MAX Full Hybrid models. Ford also confirmed an additional EUR 5.2M to support increased battery pack assembly capacity at Valencia following an initial EUR 24M investment announced in January 2020, with the facility starting operation in September last year. "The extra capacity is required to support increased demand for current and future electrified vehicle production," Ford said.
AWARD DECISION: U.S. Postmaster General Louis DeJoy defended awarding a contract to Oshkosh (OSK) potentially worth up to $6B to make up to 165,000 next-generation delivery vehicles instead of selecting Workhorse (WKHS) to construct an all-electric fleet, Reuters' David Shepardson reported. DeJoy told Reuters in an interview that he was briefed after the decision was made. "[USPS] thoroughly vetted and evaluated the decision," DeJoy said, adding that he was "pretty confident" in the move.
ELECTRIC VANS: Following a successful initial pilot program using nine Lightning Electric Ford Transit 350HD electric vans in the U.S. late last year, DHL Express plans to deploy the remaining 89 electric vehicles this year in New York and California, according to Green Car Congress. Produced by Lightning eMotors, a designer and manufacturer of elelctric medium- and heavy-duty vehicles, the new electric vehicles are capable of achieving 61 MPGe, compared to 13 MPG for similar gasoline-powered vans, the publication notes. GigCapital3 (GIK), a special purpose acquisition company, is in the process of buying Lightning eMotors.
MERGER INFORMATION REQUEST: In a regulatory filing, Lordstown Motors (RIDE) said that, on February 17, 2021, it received a request from the SEC for the voluntary production of documents and information, including relating to the merger between DiamondPeak and Legacy Lordstown and pre-orders of vehicles. The company added that it is responding to the SEC's requests and intends to cooperate with its inquiry.
BUY NIKOLA: Vertical Research analyst Jeffrey Kauffman started coverage of Nikola (NKLA) last week with a Buy rating and $24 price target. In his research note initiating coverage of the transportation and logistics sector, the analyst said that while the COVID-19 recession was "unlike anything" in the past five freight cycles, "there were important similarities that set the table for a more traditional freight cycle recovery."
'COMPELLING' PIVOTS TOWARD EV: Wells Fargo analyst Colin Langan initiated coverage of BorgWarner (BWA) with an Overweight rating and $64 price target. The company "continues to make compelling pivots toward the EV space," with its Delphi deal being the most important, Langan told investors. Meanwhile, the company's core ICE business "has been performing exceptionally well," said Langan, who sees continued margin upside as the company integrates and restructures the acquired Delphi business.
ON THE SIDELINES: Citi analyst Itay Michaeli initiated coverage of ChargePoint (CHPT) with a Neutral rating and $28 price target. The analyst is positive on the fundamental story but prefers to look for a more compelling entry point on the stock. He views ChargePoint as being in the "right place at the right time" as an established U.S. electric vehicle charging leader with a recognizable brand and strong customer relationships. However, he does not expect EBITDA profitability until 2024.
LESS UPSIDE: Goldman Sachs analyst Brian Lee downgraded SunPower (SPWR) to Neutral from Buy with a price target of $32, down from $42. Lee said the downgrade was due to year-to-date outperformance and less upside compared to residential solar peers from these levels. While the analyst still sees SunPower as well-positioned within the solar space, he now sees risk-reward as being more balanced at these levels relative to Buy-rated peers.
TRANSITION TO RENEWABLE DIESEL: Cowen analyst Jason Gabelman initiated coverage of Renewable Energy (REGI) with an Outperform rating and $80 price target. The analyst called it a top pick as the company is transitioning from a biodiesel producer to a renewable diesel and biodiesel. The ability to blend biodiesel into renewable diesel will allow the company to capture higher margins in the former, which he said is an underappreciated consideration.
Renewable Energy
-3.81 (-5.96%)
SunPower
-2.24 (-6.82%)
ChargePoint
+0.84 (+4.11%)
BorgWarner
+0.01 (+0.02%)
Nikola
-0.41 (-2.90%)
Lordstown Motors
-0.63 (-5.30%)
GigCapital3
-0.18 (-1.69%)
Workhorse Group
-0.7 (-5.21%)
Oshkosh
-0.45 (-0.37%)
Ford
-0.155 (-1.26%)
Nio
-0.74 (-2.05%)
Apple
+0.47 (+0.39%)
Bitcoin
+ (+0.00%)
Bitcoin
+ (+0.00%)
Tesla
-13.07 (-2.11%)