What You Missed This Week in EVs and Clean Energy

Rivian, Tesla and Chinese competitors report quarterly deliveries

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 (TSLA), Wall Street’s newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM (GM) and Ford (F) 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.

DELIVERIES: 

Tesla announced that in the first quarter, it produced 440,808 vehicles, 5% of which are subject to operating lease accounting, and delivered 422,875 vehicles. Tesla also said it produced 421,371 Model 3 and Y vehicles in Q1 and delivered 412,180. Additionally, the EV maker announced that it produced 19,437 Model S and X units in the quarter while delivering 10,695.

Click here to check out Tesla’s recent Media Buzz Sentiment as measured by TipRanks.

Chinese competitors also reported deliveries over the weekend. Nio (NIO) said it delivered 10,378 vehicles in March 2023. The deliveries consisted of 3,203 premium smart electric SUVs, and 7,175 premium smart electric sedans. Nio delivered 31,041 vehicles in the first quarter of 2023, representing an increase of 20.5% year-over-year. Cumulative deliveries of Nio vehicles reached 320,597 as of March 31, 2023. XPeng (XPEV) announced that in March 2023, the company delivered 7,002 Smart EVs, representing a 17% increase over the prior month. Total deliveries for the first quarter of 2023 reached 18,230 vehicles. Meanwhile, Li Auto (LI) said it delivered 20,823 vehicles in March 2023, surpassing the 20,000 monthly delivery mark again and representing an increase of 88.7% year over year. This took the company’s first quarter deliveries to 52,584, up 65.8% year over year. The cumulative deliveries of Li Auto vehicles reached 309,918 as of the end of March.

Additionally, Rivian Automotive announced production totals for the quarter ending March 31. The company produced 9,395 vehicles at its manufacturing facility in Normal, Illinois and delivered 7,946 vehicles during the same period. These figures remain in line with the company’s expectations, and it believes it is on track to deliver on the 50,000 annual production guidance previously provided.

FACTORY UNION ISSUES: 

A federal appeals court on Friday affirmed a finding that Tesla illegally fired an employee involved in union organizing, and that the company’s chief executive, Elon Musk, had illegally threatened workers’ stock options if they chose to unionize, The New York Times’ Noam Scheiber reports. The opinion, by three judges on the U.S. Court of Appeals for the Fifth Circuit, allows the National Labor Relations Board to enforce a 2021 order requiring Tesla to reinstate, with back pay, the employee, Richard Ortiz, and Musk to delete a Twitter post suggesting workers could lose stock options if they unionize.

U.S. BATTERY PLANT: 

Tesla is looking to build a battery plant in the U.S. under what would “likely be a controversial arrangement” with China’s dominant EV battery maker, CATL, sources told Bloomberg’s Gabrielle Coppola, Ed Ludlow and Jennifer Jacobs. Tesla wants to pursue a deal similar to one that Ford Motor announced last month with the battery maker to construct a plant wholly owned by the U.S. automaker, according to the report, which adds that Tesla discussed plans involving Contemporary Amperex Technology Co. Ltd. with the White House in recent days.

APPLE CARPLAY: 

General Motors intends to phase out Apple CarPlay (AAPL) and Android Auto technologies that enable drivers to bypass a vehicle’s infotainment systems, turning instead to a built-in infotainment platform developed with Google (GOOG, GOOGL) for future electric vehicles, Reuters’ Joseph White reports, citing sources. GM’s decision to stop offering the systems, beginning with the 2024 Chevrolet Blazer, could help the automaker secure additional data on how consumers drive and charge EVs.

RESTRUCTURING PLAN: 

In a regulatory filing, Lucid Group (LCID) confirmed a restructuring plan intended to reduce the company’s operating expenses “in response to evolving business needs and productivity improvements” through a reduction of the company’s current employee workforce by approximately 1,300 employees, or approximately 18% and that on March 28, Peter Rawlinson, the company’s CEO and Chief Technology Officer, sent an email to the company’s employees regarding the plan. The company expects to substantially complete the plan by the end of the second quarter of 2023, subject to local law and consultation requirements.

BENEFITS ALREADY PRICED IN: 

Morgan Stanley downgraded First Solar (FSLR). First Solar is one of the biggest direct beneficiaries of the Inflation Reduction Act, the stock has appreciated 196% since the IRA was announced, the firm tells investors in a research note. Morgan Stanley believes the shares already price in the significant benefits of the IRA. Going forward, it sees risk of increased competition as domestic and international competitors expand in the U.S. given the “very supportive” potential subsidy level available to panel manufacturers. This will likely drive down the long-term earnings profile of First Solar, the firm contends.

‘GETTING MORE CAUTIOUS’: 

Morgan Stanley downgraded Plug Power (PLUG). The firm continues to like the company’s strategy to vertically integrate the green hydrogen ecosystem. However, after several quarters of execution issues, Morgan Stanley is “getting more cautious” on the pace of Plug’s revenue growth and margin improvement. It also sees potential near-term financing risks given the company’s continued elevated levels of cash burn.

BULLISH ON BLOOM ENERGY, OTHERS: 

Morgan Stanley analyst Andrew Percoco assumed coverage of Bloom Energy, and named the stock the firm’s new Pick in clean tech as the analyst took over lead coverage of North America Clean Tech research at the firm. The firm calls out Bloom as “a key beneficiary” of several key themes including the growing “economic wedge” of distributed energy, rising grid instability, grid capacity limitations and the $3/kg clean hydrogen tax credit included in the IRA.

Sunrun (RUN), Stem (STEM), and Altus Power (AMPS) coverage was also assumed at Morgan Stanley with Overweight ratings.

Additionally, Morgan Stanley initiated coverage of Sunnova Energy (NOVA). Sunnova is the third largest residential rooftop solar installer in the U.S, the firm tells investors in a research note. Morgan Stanley likes the company’s exposure to a “vastly under-penetrated” market, with strong long-term growth prospects. It sees an attractive buying opportunity “for those willing to accept near-term volatility.”

ON THE SIDELINES: 

Coverage of SunPower (SPWR), Maxeon Solar (MAXN), SolarEdge (SEDG), and Shoals Technologies (SHLS) stocks was assumed at Morgan Stanley with Equal Weight ratings. The firm’s In-Line industry view balances the strong long-term growth prospects for renewable energy with near-term headwinds that include permitting backlogs, a challenging supply chain and macro environment and volatility in the financing markets.

Meanwhile, Morgan Stanley initiated coverage of Enphase Energy (ENPH). The firm says the stock’s valuation balances the company’s above-peer profitability and long-term growth prospects with elevated near-term risks. Enphase has exposure to small-scale residential solar installers, which may see a more significant impact from Net Energy Metering 3.0 in California and the volatile financing environment, Morgan Stanley adds.

BEARISH ON ARRAY, OTHERS: 

Morgan Stanley analyst Andrew Percoco assumed coverage of Array Technologies (ARRY), as the analyst took over lead coverage of North America Clean Tech research at the firm. The firm’s In-Line industry view balances the strong long-term growth prospects for renewable energy with near-term headwinds that include permitting backlogs, a challenging supply chain and macro environment and volatility in the financing markets.

HIGHLY COMPETITIVE MARKET: 

Barclays initiated coverage of Blink Charging (BLNK). While the company’s revenues are largely comprised of equipment sales today, recurring revenues from electricity sales and network fees should grow as Blink expands its network of owned/operated chargers and swaps out the Level 2 chargers for Level 3 chargers over the longer term, the firm tells investors in a research note. However, the firm’s Equal Weight rating reflects the “highly competitive market” that is characterized by limited pricing power for the equipment and for charging.

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Originally Posted April 3, 2023 – What You Missed This Week in EVs and Clean Energy