What You Missed This Week in EVs and Clean Energy

Tesla laying off more than 10% of global workforce

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 LAYOFFS: 

Tesla is laying off more than 10% of its global workforce, Electrek‘s Jameson Dow reports, citing an internal company-wide email. According to the report, this means that at least 14,000 employees will be laid off, but it is unclear which specific teams will be most or least affected by Tesla’s layoffs. The company-wide email, which was leaked to the press, said in part that “Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity. As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.”

PRICE CUT FOR FSD: 

Tesla has reduced the subscription price for its Full Self-Driving driver-assist software to $99 from $199 per month in the U.S., the company announced in a post on X.

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

CONTINUED EBITDA LOSSES: 

Wolfe Research initiated coverage of Nikola (NKLA) with a Peer Perform rating and no price target. While noting that Nikola has a first mover advantage in commercializing hydrogen fuel cell electric vehicles, the firm expects continued EBITDA losses and cash burn for “the next couple of years,” the firm tells investors. However, Wolfe adds that Nikola “finally has a stable management team in place” with a well-respected CEO and recently appointed CFO following “years of controversy and management turnover.”

LI AUTO OVER NIO, XPENG: 

Macquarie resumed coverage of Nio (NIO) with a Neutral rating. While stating that near-term volumes are challenging, the firm adds that Nio has reached a point where heavy upfront spending on battery swapping and service centers provide an edge.

Macquarie also resumed coverage of XPeng (XPEV) with a Neutral rating. While its mass-market launches will help, scale remains the biggest challenge for XPeng and the firm is concerned that heavy competition in its core BEV price segments make it difficult to grab share.

Meanwhile, Macquarie resumed coverage of Li Auto (LI) with an Outperform rating, saying the company “now stands alone” among China’s new wave of EV entrants with the highest volumes, vehicle margins and cash generation among peers.

SELL CHARGEPOINT: 

Goldman Sachs downgraded ChargePoint (CHPT) to Sell from Neutral. The firm believes slower growth in the number of electric vehicles on the road in the U.S. and rising competition in EV charging will lead to less growth for ChargePoint than what is in Street estimates. With about 80% of its revenue tied to North America, ChargePoint will be impacted by slower U.S. EV sales, Goldman tells investors in a research note. Meanwhile, competition is increasing, including from Tesla, which could limit demand for networks using ChargePoint, says the firm.

ON THE SIDELINES: 

Barclays initiated coverage of NextEra Energy (NEE) with an Equal Weight rating. The company is seeing positive momentum after a volatile two years, but the stock’s valuation “skews fairer” with shares already trading at a strong premium, the firm tells investors in a research note.

Barclays also initiated coverage of NextEra Energy Partners (NEP) with an Equal Weight rating. NextEra Energy is a leading renewable YieldCo and one of the largest owners of renewable assets in the U.S., the firm tells investors in a research note. Barclays says that while the company has many long-term advantages, its near-term outlook is challenged, mainly due to an elevated cost of capital and funding needs that have not yet been addressed.

BUY FIRST SOLAR: 

Janney Montgomery Scott initiated coverage of First Solar (FSLR) with a Buy rating. First Solar’s utility-scale panel business is oversold through 2026 with a greater than $23B backlog, providing a “unique level of long-duration certainty” and insulating it from ongoing challenges regarding project pushouts impacting the domestic utility-scale landscape in 2024-2025, the firm tells investors. In addition, the firm views First Solar as a beneficiary of a potential “tougher on China” trade policy, Janney added.

Originally Posted April 15, 2024 – What You Missed This Week in EVs and Clean Energy