Tesla said to have suspended car production at Shanghai plant, company says news report “not accurate”
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Tesla suspended car production at its Shanghai plant on Saturday, extending a planned eight-day production halt at its largest worldwide plant by car output, The Wall Street Journal’s Raffaele Huang reported over the weekend, citing people familiar with the matter. The decision to extend the work halt comes as Tesla faces a wave of COVID-19 infections among its workers and suppliers, the people said. The temporary halt follows a recent slowdown in global demand for Tesla vehicles, the author added. Meanwhile, Tesla told the Global Times that, “media report about Tesla’s suspending production at its Shanghai plant is not accurate.”
The Senate Finance Committee has opened an inquiry into whether auto makers including Tesla and General Motors are using parts and materials made with forced labor in China’s Xinjiang region, The Wall Street Journal’s Yuka Hayashi reports. In a letter sent Thursday, the committee asked the chief executives of eight car manufacturers to provide detailed information on their supply chains to help determine any links to Xinjiang, where the U.S. government has alleged the use of forced labor involving the Uyghur ethnic minority and others, the author notes. The letter to car companies cited a recent report from the U.K.’s Sheffield Hallam University that found evidence that global auto makers were using metals, batteries, wiring and wheels made in Xinjiang, or sourcing from companies that used Uyghur workers elsewhere in China.
NIO CUTS Q4 PRODUCTION OUTLOOK:
Nio (NIO) said that it expects to deliver 38,500 to 39,500 vehicles in Q4, down from its previous outlook of 43,000 to 48,000 vehicles. “In December 2022, the company has been facing challenges in deliveries and productions, together with certain supply chain constraints, caused by the outbreak of the Omicron coronavirus variant in major cities in China. While our teams have strived to maintain continuous operations on all fronts, we were not able to reach our full capacities, particularly when there have been disruptions on delivery and registration procedures involving users,” Nio said in a press release.
Nio founder and Chief Executive Officer William Li had said the Chinese EV maker may face a challenging first half as a cut in government subsidies and the broader economic slowdown erode local demand in the world’s largest new-energy vehicle market, according to Bloomberg. Customers are likely to try place orders before the end of the year, when the national subsidies for electric vehicles are expected to be phased out, Li said at a briefing after the company’s launch of its latest models at a weekend event in Hefei, central China.
Northland analyst Abhishek Sinha initiated coverage of Lion Electric (LEV). The analyst believes Lion offers a “compelling entry point” for investors looking for exposure to a small cap electric vehicle manufacturer with a focus on medium- and heavy-duty commercial vehicles. The company has an early-mover advantage with a proven technology and is well positioned to scale up, drive costs down, and capture market share in the growing electric vehicle market in North America, Sinha tells investors in a research note.
LOCK-UP MAY OFFER ENTRY:
Scotiabank analyst Orest Wowkodaw initiated coverage of Ivanhoe Electric (IE). The analyst believes shares of the exploration and development-stage company primarily focused on critical minerals located in the United States warrant a premium valuation despite the company’s “relatively early-stage development” given Ivanhoe’s “impressive management track record,” proprietary “Typhoon” 3D exploration technology, and focus on U.S.-based critical minerals. The potential for “undue weakness” in the shares due to a near-term expiration of initial public offering lock-ups “could represent an attractive entry point,” the analyst added.
BULLISH ON ENPHASE:
Daiwa analyst Jonathan Kees initiated coverage of Enphase Energy (ENPH) and First Solar (FSLR). Enphase has been gaining market share in a duopoly, has the highest margins, and “remains the predominant microinverter tech company,” said Kees, who added that the company is expanding internationally. Regarding First Solar, the analyst argued that EBITDA should rebound from 2022 lows and the Street “may not have fully factored in the rebound in forward estimates.”
ON THE SIDELINES:
Daiwa analyst Jonathan Kees also started coverage of SolarEdge (SEDG) with a Neutral rating. The company has been delivering negative profit margins recently and a snap-back to pre-COVID levels is likely more challenging than peers, Kees tells investors. SolarEdge is losing market share in the U.S. duopoly, facing Chinese competitors in Asia markets, and already has a large base internationally, so growth there “may be more measured,” Kees added.
Cantor Fitzgerald analyst Derek Soderberg initiated coverage of Array Technologies (ARRY). Array is a logical long-term partner for engineering, procurement, and construction firms and utility-scale solar operators given the company’s proven track record, robust supply chain and differentiated product offering, Soderberg tells investors in a research note. The analyst believes Array holds a number one or number two U.S. market share, which will position the company well to benefit from strengthening U.S.-specific tailwinds.
Originally Posted December 27, 2022 – What You Missed This Week in EVs and Clean Energy
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