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.
TESLA WORKFORCE: CEO Elon Musk said Tesla (TSLA) needed to cut staff by around 10%, noting he had a "super bad feeling" about the economy, according to an internal email seen by Reuters, Hyunjoo Jin reported. The email, titled "pause all hiring worldwide," was sent to Tesla executives on Thursday, according to the report. Tesla employed around 100,000 people in the company and its subsidiaries at the end of 2021, according to its annual SEC filing.
Two days later, Elon Musk tweeted that, “Total headcount will increase, but salaried should be fairly flat.”
'CHALLENGES' TO 2022 DELIVERY GOAL: On Friday, Cowen analyst Jeffrey Osborne lowered the firm's price target on Tesla to $700 from $790, keeping a Market Perform rating on the shares. The analyst trimmed second quarter estimates given China'a zero COVID policy and challenges at Tesla's Shanghai production facility in April and May. In recent days, press reports have indicated that Shanghai is running two shifts and at pre-COVID levels of 2,600 capacity per day, Osborne told investors in a research note. However, he believes about 50,000 vehicles were lost during the shutdown and that risk remains for Tesla's June quarter, in particular with the local supplier ramp up. Osborne now expects Tesla second quarter deliveries of 242,000 vehicles, down from 309,400. Most investors expect extremely challenged working capital and production results from Tesla for Q2 and conversations with investors suggest buyside expectations are 240,000-250,000 deliveries, Osborne wrote. He expects Tesla to "point to challenges in achieving its stated goal of 50% delivery growth in 2022."
Goldman Sachs analyst Mark Delaney also lowered the firm's price target on Tesla to $1,000 from $1,200 but kept a Buy rating on the shares. In U.S. Autos and industrial technology, he is broadly lowering estimates and price targets to better reflect additional supply chain constraints in the near-term and weaker demand in the intermediate-term, Delaney told investors. He now expects global auto production of 79M and 84M units in 2022 and 2023, respectively, versus a prior view of 82M and 86M units and is lowering his sales forecasts with his U.S. SAAR forecasts for 2022 and 2023 now at 14.5M and 15.75M, respectively.
DELIVERIES: Nio (NIO) said it delivered 7,024 vehicles in May. The deliveries consisted of 5,317 smart electric SUVs, including 746 ES8s, 2,936 ES6s and 1,635 EC6s, and 1,707 ET7s. As of May 31, cumulative deliveries reached 204,936 vehicles. In May, the company's vehicle production had been gradually recovering from the impact of COVID-19 outbreaks in certain regions in China while vehicle deliveries were still constrained to a certain extent by the corresponding preventive measures. Nio plans to further ramp up the production capacity to a higher level by working closely with supply chain partners and to accelerate the delivery recovery starting from June, in light of the recent supportive developments in the COVID-19 situation and the strong order inflow.
XPeng (XPEV) also announced that it delivered 10,125 Smart EVs in May, representing a 78% increase year-over-year. The May deliveries consisted of 4,224 P7 smart sports sedans, 3,686 P5 smart family sedans, as well as 2,215 G3 smart compact SUVs. As of May 31, year-to-date total deliveries reached 53,688, representing a 122% increase year-over-year. The company resumed double-shift production at its Zhaoqing plant beginning in mid-May as supply chains and key manufacturing areas in China started to gradually recover.
Additonally, Li Auto (LI) said the company delivered 11,496 Li ONEs in May, up 165.9% year over year. The cumulative deliveries of Li ONE have reached 171,467 since the vehicle's market debut in 2019.
SELL RIVIAN: On June 1, DA Davidson analyst Michael Shlisky initiated coverage of Rivian Automotive (RIVN) with an Underperform rating and $24 price target. While the company's pickup truck and SUV electric vehicles are higher priced than typical mass-market models, the "high-performance and feature-rich vehicles may be able to justify the premium pricing," Shlisky told investors in a research note. The analyst "loved" the truck he tested, but is worried that negative headlines will outnumber the positives in the months to come. Like most electric vehicle startups, "there have been bumps in the road," he wrote.
BUY XOS: Northland analyst Donovan Schafer initiated coverage of Xos (XOS) with an Outperform rating and $5 price target. Xos' vehicle deliveries in the fourth and first quarters were "small though meaningful in number," said Schafer, who expects an increase in the next two quarters and believes the ramp should continue to expand with "meaningful demand" from customers. He attended the company's new product launch where it unveiled a Class 6/7 "medium-duty" truck and a Class 8 "heavy-duty" truck and was impressed with the new offerings.
BULLISH ON PROTERRA: DA Davidson analyst Michael Shlisky initiated coverage of Proterra (PTRA) with a Buy rating and $10 price target. The analyst views investing in Proterra "like an investment in a subset of pre-vetted, quality EV-truck companies." Furthermore, Shlisky thinks Proterra is emerging as a preferred provider of batteries to electric truck makers.
OUTSIZED GROWTH: Oppenheimer analyst Colin Rusch upgraded SolarEdge (SEDG) to Outperform from Perform with a $334 price target as he finds it demonstrating a highly defensible technology position poised for outsized growth despite trading at levels with a compelling risk/reward profile. With energy commodities, notably natural gas, remaining elevated, the analyst expects additional electricity rate increases across the globe even as solar plus storage economics already seem compelling across much of the U.S. and EU. He believes the global solar industry will grow 3-5-times over the next decade and that SolarEdge will be a key beneficiary, enjoying easing supply headwinds and incremental operating leverage.
EXECUTIVE ACTION ON SOLAR: On Monday, June 6, the White House released a fact sheet that stated in part: "While President Biden continues pushing Congress to pass clean energy investments and tax cuts, he is taking bold action to rapidly build on this progress and create a bridge to this American-made clean energy future. Today, President Biden is taking action to: Authorize use of the Defense Production Act to accelerate domestic production of clean energy technologies, including solar panel parts; Put the full power of federal procurement to work spurring additional domestic solar manufacturing capacity by directing the development of master supply agreements, including "super preference" status; and create a 24-month bridge as domestic manufacturing rapidly scales up to ensure the reliable supply of components that U.S. solar deployers need to construct clean energy projects and an electric grid for the 21st century, while reinforcing the integrity of our trade laws and processes. Together, these actions will spur domestic manufacturing, construction projects, and good-paying jobs - all while cutting energy costs for families, strengthening our grid, and tackling climate change and environmental injustice." Publicly traded companies in the solar energy space include Array Technologies (ARRY), Canadian Solar (CSIQ), FTC Solar (FTCI), First Solar (FSLR), JinkoSolar (JKS), Maxeon Solar (MAXN), ReneSola (SOL), Shoals Technologies (SHLS), SolarEdge and SunPower (SPWR).
