What You Missed This Week in EVs and Clean Energy

KGI Securities upgrades Tesla as Nomura and CMB International downgrade Nio

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.

TESLA: 

KGI Securities upgraded Tesla to Outperform from Neutral. Tesla is seeing its “vast” U.S. investments in electric vehicle assembly and battery “bear fruit in 2023,” KGI tells investors in a research note. The firm views the company as the biggest beneficiary of the Inflation Reduction Act and federal funding for EV charging infrastructure. Every Model 3 and Y sold now qualifies for as much as $7,500 in tax credits, and Tesla stands to receive billions of dollars in production tax credits for its battery operations, says KGI. In addition, the firm believes the company’s artificial intelligence “prowess is underrated.”

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

MORE CRASHES THAN REPORTED: 

The recent crash in North Carolina’s Halifax County was one of 736 U.S. crashes since 2019 involving Teslas in Autopilot mode – far more than previously reported, according to a Washington Post analysis of National Highway Traffic Safety Administration data, the publication’s Faiz Siddiqui and Jeremy B. Merrill report. The number of such crashes has surged over the past four years, the data shows, reflecting the hazards associated with increasingly widespread use of Tesla’s futuristic driver-assistance technology as well as the growing presence of the cars on the nation’s roadways, the authors write. The number of deaths and serious injuries associated with Autopilot also has grown significantly, the data shows. While it’s impossible to say how many crashes may have been averted, the data shows clear flaws in the technology being tested in real time on America’s highways, the publication adds.

TESLA SUPER CHARGERS: 

General Motors announced a collaboration with Tesla to integrate the North American Charging Standard connector design into its EVs beginning in 2025. Additionally, the collaboration will expand access to charging for GM EV drivers at 12,000 Tesla Superchargers, and growing, throughout North America. The Tesla Supercharger Network will be open to GM EV drivers starting in 2024 and will initially require the use of an adapter. Beginning in 2025, the first GM EVs will be built with a NACS inlet for direct access to Tesla Superchargers without an adapter.

Commenting on the news that General Motors is joining Tesla’s Supercharger Network following Ford’s decision two weeks ago to make its EVs compatible with Tesla’s “increasingly ubiquitous supercharging network,” Morgan Stanley said this is “good for consumers, good for Tesla and quite a good sign for GM in terms of moving the needle on capital discipline and collaboration.” The firm, who thinks this development is “a significant and a welcomed sign for GM investors,” adds that it sees the agreement between GM and Tesla as “potentially profoundly significant in narrative change.” GM being willing to work with “the dominant player in EVs” can allow the company to focus investment on more value added areas, such as business model, brand, customer experience, and return of capital. Morgan Stanley keeps an Overweight rating on GM shares.

Meanwhile, Wedbush raised the firm’s price target on Tesla and reiterated an Outperform rating on the shares. The firm also added the shares to its “Best Ideas List” as Tesla “took another big step forward” by announcing General Motors will integrate the North American Charging Standard connector design into its electric vehicles, allowing access to Tesla chargers in fiscal 2024, and without an adapter by fiscal 2025. Wedbush believes Tesla’s sum-of-the-parts story “now further comes into play” with its supercharger network, energy business, artificial intelligence driven autonomous path, “unmatched” battery ecosystem, and increased production globally adding to the “golden EV success story still in the early days of playing out with customers.” The firm expects the Street will start to better recognize the underlying value in the Tesla EV ecosystem into 2024 and beyond. Wedbush further views the GM collaboration as a large monetization opportunity for Tesla in its supercharger story.

MOVING TO THE SIDELINES: 

Nomura downgraded Nio (NIO) to Neutral from Buy, after a different analyst at the firm assumed research coverage of the stock. The company reported lackluster deliveries with an eroding gross margin profile in Q1, and the firm expects Nio’s implied upside to be capped by intensified competition and limited market share improvement in 2023, based on the company’s 2023 guidance for deliveries versus the overall growth outlook for the electric vehicle industry.

CMB International also downgraded Nio to Hold from Buy. The firm says heightened competition is dragging the company’s sales growth more severely than expected. Nio could face more challenges than its peers when its sales growth slows amid its heavy investments, CMB added.

SELL FISKER: 

Wolfe Research downgraded Fisker (FSR) to Underperform from Peer Perform. The firm continues to view Fisker as the most speculative auto maker within its coverage. The company is attempting to build a brand within some of the most highly saturated Industry segments, including mass-market two-row crossovers and sedans, Wolfe adds. The firm says Fisker’s competitive landscape is becoming more intense as Tesla and several Chinese car makers “press their cost advantages.”

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Originally Posted June 12, 2023 – What You Missed This Week in EVs and Clean Energy