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 PROBE BY NHTSA: On Monday morning, the National Highway Traffic Safety Administration announced a formal investigation into Tesla's (TSLA) autopilot system which covers 765,000 models Y, X, S and 3 for years 2014 through 2021. Since January 2018, the agency's Office of Defects Investigation has identified eleven crashes in which Tesla models of various configurations have encountered first responder scenes and subsequently struck one or more vehicles involved with those scenes. The crashes resulted in 17 injuries and one fatality. Most incidents took place after dark and the crash scenes encountered included scene control measures such as first responder vehicle lights, flares, an illuminated arrow board, and road cones, the agency said in a post on its website. The involved subject vehicles were all confirmed to have been engaged in either Autopilot or Traffic Aware Cruise Control during the approach to the crashes. The investigation will assess the technologies and methods used to monitor, assist, and enforce the driver's engagement with the dynamic driving task during Autopilot operation.
GLJ Research analyst Gordon Johnson views this morning's formal autopilot investigation by the National Highway Traffic Safety Administration as a "potential big problem" for Tesla. The agency is focusing on the danger that Tesla's autopilot creates for people outside the vehicle, so the drivers accept autopilot's risks does not appear to be a defense here, Johnson tells investors in a research note. The analyst is of the opinion that Tesla's driver assist software does not monitor driver awareness nearly as well as other available systems. Johnson has a Sell rating on Tesla shares.
Also commenting on NHTSA's formal safety probe into Tesla's Autopilot system, Citi analyst Itay Michaeli said the scrutiny supports his industry view around the need for sensor redundancy and is a risk that he has noted before given what he called "Tesla's more controversial approach to automated driving than peers." Michaeli, who acknowledged it is too early to predict how NHTSA's probe might conclude, believes the probe could end in some sort of recall or feature changes in the "worst case." Michaeli has a Sell rating and $209 price target on Tesla shares.
TESLA CHINA SHIPMENTS: Tesla shipments of cars made in China to the local market fell 69% in July from June to just 8,621 units, Bloomberg reported. In June, Tesla's Shanghai factory shipped 28,138 cars to the local market. Exports jumped to 24,347 in July from 5,017 in June, and overall Tesla China shipments in July declined 0.6% to 32,968, according to the report.
DELIVERY DELAY: Ford (F) confirmed that it is delaying deliveries of its electric Mustang Mach-E crossovers and some Bronco SUVs amid manufacturing issues, CNBC's Michael Wayland reported. The delays are due to a roof issue on the Bronco SUV and a shortage of semiconductor chips for the Mustang Mach-E crossover. Ford said that, "As a result of continued roof challenges, we will be producing fewer 2021 model year Bronco vehicles than initially planned" and that "We are working closely with all of our key suppliers to address production constraints tied to this global semiconductor shortage so we can continue to build Mach-E vehicles, and get them to our customers as quickly as we can."
On Wednesday, Electrek's Jameson Dow reported that Ford had sent out an email to future Mach-E owners warning of a six-week delay in delivery times for orders produced or scheduled between July 5 and October 1 due to the global semiconductor shortage. Ford will provide an additional 250kWh worth of complimentary charging to affected owners, according to the report.
CAP ON PRICE OF EV QUALIFYING FOR TAX CREDIT: The U.S. Senate has voted to approve a new $40,000 threshold on the price of electric cars that would be eligible for a $7,500 federal tax credit, Electrek's Fred Lambert reported. Only electric cars that cost less than $40,000 would be eligible, and only buyers with an income of less than $100,000 would be able to apply for the tax credit, the author noted. The timing of the effort to limit access to the EV incentive is interesting since the Biden administration has made clear that they plan to reform the program, the publication added. Publicly traded companies in the space include Tesla, General Motors (GM), Ford, Nikola (NKLA), Lucid (LCID), and Fisker (FSR).
WORKHORSE SELLS MOST OF STAKE IN LORDSTOWN: Workhorse (WKHS) said in a filing that the company sold down much of its stake in Lordstown Motor (RIDE) this summer. The electric delivery truck maker sold 11.9M shares in the startup since July 1, reducing the company's 9% stake by about three quarters. "During the period beginning July 1, 2021 through August 6, 2021, [Workhorse] sold approximately 11.9 million shares of [Lordstown] Class A Common Stock at an average price of $6.67 per share for expected net proceeds, after transaction expenses and brokers’ commissions, of approximately $78.8 million. As a result of the sales, the company recorded a loss of approximately $52.1 million," according to the filing. Workhorse was an early investor in Lordstown Motors.
'LIMITED' PRODUCTION OF ENDURANCE: Lordstown Motors said in its earnings report on Wednesday that it plans to begin "limited" production of its Endurance electric truck in late September. Production in 2021 will be limited to coincide with the commercialization roadmap, the company said. "We are launching the Endurance with a prudent ramp of production given a challenging industry and supply chain landscape. We are on track to begin limited production at the end of September and through the fourth quarter and complete vehicle validation and regulatory approvals in December and January. This will be followed by deployments with selected early customers in Q1 in advance of commercial deliveries in early Q2, with the ramp steepening the second half of next year," it added.
AIWAYS EXPLORES U.S. IPO: Aichi Automobile, an electric-vehicle startup better known as Aiways, is exploring a U.S. initial public offering that could occur as soon as this year, Bloomberg's Gillian Tan, Vinicy Chan, and Manuel Baigorri reported, citing people familiar with the matter. The Shanghai-based company is working with underwriters ahead of a listing in which it could raise about $300 million, the people said.
ON THE SIDELINES: DA Davidson analyst Michael Shlisky initiated coverage of Nikola with a Neutral rating and $10 price target. The company is beginning production of its battery-powered truck, which will be followed by its fuel-cell powered model, and while a BEV seem like a straightforward proposition, the fuel-cell truck could be a tougher initiative, the analyst told investors in a research note. Shlisky added, however, that at current valuation levels, he's not prepared to recommend Nikola shares.
The analyst also started coverage of:
BUY FISKER: Morgan Stanley analyst Adam Jonas resumed coverage of Fisker with an Overweight rating and $40 price target following the company's second quarter report. The analyst, who continues to recommend Fisker as his "highest rated de-SPAC EV startup," has a $90 bull case target for the shares. He views Fisker as potentially "one of the only EV-related startups to actually launch on time" with its Ocean and expects it can "ramp efficaciously in late 2022 at at time when demand for EVs exceeds supply.
INCREASING EXECUTION RISKS: Roth Capital analyst Craig Irwin downgraded Blink Charging (BLNK) to Neutral from Buy with a $37 price target as the shares of Blink trade near his price target. The analyst noted that second quarter results were positive, with product sales driving revenue, plus a $1.4M contribution from Blue Corner. However, Irwin believes execution risks may be increasing due to a tight supply chain and other issues, and he would look for a better entry point in the stock.
PURE PLAY INVESTMENT ON DC FAST CHARGING: Cowen analyst Gabe Daoud initiated coverage of EVgo (EVGO) with an Outperform rating and $18 price target. The analyst argued that the company stands out as a pure play investment on DC fast charging, 21st century infrastructure required to continue the decarbonization of mobility and drive further EV adoption. EVgo also appear well placed to capitalize on a rapidly growing TAM given strong partnerships, site selection and "SaaS"-like qualities, he contended
Tesla
-35.91 (-5.01%)
Ford
-0.16 (-1.18%)
General Motors
-0.95 (-1.77%)
Nikola
-0.375 (-3.93%)
Lucid Group
-0.77 (-3.28%)
Fisker
-0.705 (-4.90%)
Workhorse Group
-0.15 (-1.59%)
Lordstown Motors
-0.105 (-1.96%)
Electric Last Mile Solutions
-0.52 (-6.02%)
Lightning eMotors
+0.66 (+7.40%)
Shyft Group
-0.58 (-1.36%)
Blink Charging
-0.445 (-1.37%)
EVgo
-0.56 (-5.43%)