What You Missed This Week in EVs and Clean Energy

Tesla reports Q3 deliveries, Evercore ISI says buy Rivian ahead of “round 2”

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. 

Q3 DELIVERIES: 

Tesla said that, “In the third quarter, we produced over 430,000 vehicles and delivered over 435,000 vehicles. A sequential decline in volumes was caused by planned downtimes for factory upgrades, as discussed on the most recent earnings call. Our 2023 volume target of around 1.8 million vehicles remains unchanged.” The company reports deliveries of 435,059 vehicles and production of 430,488 vehicles.

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

SEPTEMBER DELIVERIES: 

Nio Inc. (NIO) announced its September and third quarter 2023 delivery results. Nio delivered 15,641 vehicles in September 2023, increasing by 43.8% year-over-year. The deliveries consisted of 11,504 premium smart electric SUVs, and 4,137 premium smart electric sedans. Nio delivered 55,432 vehicles in the third quarter of 2023, representing an increase of 75.4% year-over-year. Cumulative deliveries of Nio vehicles reached 399,549 as of September 30, 2023.

XPeng (XPEV) also announced its vehicle delivery results for September and the third quarter of 2023. In September 2023, XPeng recorded monthly deliveries of 15,310 Smart EVs, representing a 12% increase over the prior month and a 81% increase year-over-year, underscoring XPeng’s strong growth trajectory for eight consecutive months. XPeng G6 deliveries reached 8,132 units in September, which brought cumulative G6 deliveries to 19,381 units. Total Smart EV deliveries for the third quarter of 2023 reached 40,008 units, a quarter-over-quarter increase of 72%.

Meanwhile, Li Auto (LI) announced that the company delivered 36,060 vehicles in September 2023, representing an increase of 212.7% year-over-year and setting a new monthly record. This brought the company’s third quarter deliveries to 105,108, up 296.3% year-over-year. The cumulative deliveries of Li Auto vehicles in 2023 reached 244,225 as of the end of September.

AHEAD OF ROUND 2: 

Evercore ISI upgraded Rivian Automotive. “Who is the next Tesla?” is the “simple, yet vexing, question constantly asked by investors,” the firm stated. While Evercore ISI “hates that question,” the firm posits that “a better question would be” to ask what are the key similarities that have made Tesla and BYD responsible for greater than 40% of global NEV sales and concludes that the answers include brand, scale economics and vertical integration. In that context, the firm argues that outside of Tesla and BYD, Rivian is “the only OEM showing increased evidence” of meeting all three criteria. Of the three criteria, the two the firm focused on for its upgrade are escape brand velocity of R1S, with the R2 to further expand with an SUV, and a path to 15%-20% gross margins, says Evercore, which further notes that the company has executed on both cost and delivery targets. The firm, which sees the R1 plus R2 setting up Rivian’s “round 2,” would be buyers at current levels and expects “solid” production and deliveries to be reported for Q3.

BULLISH FRESH PICK: 

Baird is designating Rivian Automotive as a “bullish Fresh Pick” into Q3 deliveries, as the firm expects they will beat consensus. Concerns regarding third party reports of weakening demand have led to recent weakness in the stock, notes Baird, which believes underlying demand remains strong with production improving. The firm, which sees the Q3 deliveries data being a near-term catalyst, has an Outperform rating and $30 price target on Rivian shares.

PURE-PLAY EXPOSURE: 

BofA reinstated coverage of Fisker (FSR). The stock offers investors “pure-play exposure to the rapidly growing EV market” with a lower risk business model than peers, the firm contends. In addition, Fisker has key milestones coming in 2024 that should provide catalysts for the shares, BofA says.

UNIQUE BUSINESS MODEL: 

UBS initiated coverage of Blink Charging (BLNK). Blink has the third largest network of public electric vehicle chargers in the U.S and investors do not fully appreciate its positive attributes, the firm tells investors in a research note. UBS says Blink Charging’s business model is unique, selling EV charging equipment, owning/operating chargers for clients, and running a hybrid revenue share model.

BULLISH ON CHARGEPOINT: 

UBS initiated coverage of ChargePoint (CHPT). The firm is positive for three reasons, namely the fact that ChargePoint has the largest network of Level 2 chargers in North America with about 50% share; deep customer base of large companies that will support the land and expand growth strategy; and clear path to break even EBITDA by 4Q25 as gross margin expands as various headwinds abate and opex growth slows.

MOVING TO THE SIDELINES: 

Barclays downgraded SolarEdge (SEDG). The firm expects challenges to persist beyond the near-term destocking issue due to “inevitable” selling price reductions, market share losses, and an currency rates that are currently trending unfavorably. “There is probably more bad news before we get good news” for SolarEdge, Barclays tells investors in a research note. Incremental data seen on market share and SolarEdge’s U.S shipments to date would indicate the company pushed too much inventory into the channel at the start of this year as demand was starting to weaken, says the firm.

MARKET SHARE: 

UBS initiated coverage of Sunnova Energy (NOVA). The firm sees the company as well positioned to take market share, driven by increasing demand for third party-owned residential solar systems which have relatively more favorable tax treatment under the Inflation Reduction Act. The 50% one-year decline in Sunnova shares, driven by near-term market growth concerns and rising rates, provides an opportunity on a 12-month forward basis, UBS tells investors in a research note.

DOWNSIDE RISK: 

UBS initiated coverage of Maxeon Solar (MAXN). Maxeon is positioned to be a significant beneficiary of manufacturing tax incentives under the Inflation Reduction Act, the firm tells investors in a research note. However, UBS sees downside risk to second half of 2023 and 2024 consensus estimates given ongoing solar module pricing pressure in Europe, slowing U.S. residential solar demand driven by recent policy changes in California and high financing costs broadly.

FINANCIAL INFLECTION ‘WAYS OUT’: 

BofA reinstated coverage of Luminar Technologies (LAZR). The firm believes catalysts associated with the company’s earnings and cash flow inflection are a few years out. Luminar’s demand could accelerate as sensors come to new vehicles but a financial inflection is a ways out, BofA tells investors in a research note.

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Originally Posted October 2, 2023 – What You Missed This Week in EVs and Clean Energy