Welcome to The Fly's latest edition of "Charged," where we look back at some recent analysts' notes, news and activity in the electric vehicle and clean energy space.
TESLA DELIVERIES, PRODUCTION: Tesla announced on Friday that it produced just over 180,338 vehicles and delivered nearly 184,800 vehicles in the first quarter. "We are encouraged by the strong reception of the Model Y in China and are quickly progressing to full production capacity. The new Model S and Model X have also been exceptionally well received, with the new equipment installed and tested in Q1 and we are in the early stages of ramping production," Tesla said in a statement.
Model S/X deliveries were 2,020 and Model 3/Y deliveries were 182,780. Tesla added, "Our net income and cash flow results will be announced along with the rest of our financial performance when we announce Q1 earnings. Our delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct. Final numbers could vary by up to 0.5% or more."
Following the news, Wedbush analyst Daniel Ives upgraded Tesla to Outperform from Neutral with a price target of $1,000, up from $950. The analyst also added the shares to the "Wedbush Best Ideas" list with a $1,300 "long-term bull case." The first quarter delivery numbers released Friday was a "paradigm changer" and shows that the pent-up demand globally for Tesla's Model 3/Y is hitting its "next stage of growth as part of a global green tidal wave underway," Ives told investors in a research note. The analyst now believes Tesla could exceed 850,000 deliveries for 2021 with 900,000 a "stretch goal," despite the chip shortage and supply chain issues lingering across the auto sector.
While the electric vehicle sector and Tesla shares have been under significant pressure so far this year, the "tide is turning" on the Street and the "eye popping" delivery numbers coming out of China cannot be ignored with the trajectory on pace to represent 40% of deliveries for Tesla by 2022, said Ives. The analyst believes Tesla's profitability and free cash flow profile will significantly improve over the next four years with $20 of annual earnings per share potential by 2026.
NIO, XPEV DELIVERIES: NIO (NIO) said on Thursday that it delivered 7,257 vehicles in March, a new monthly record representing a 373% year-over-year growth. The deliveries consisted of 1,529 ES8s, the company's six-seater and seven-seater smart electric SUV, 3,152 ES6s, the company's five-seater smart electric SUV, and 2,576 EC6s, the company's five-seater premium smart electric coupe SUV. NIO delivered 20,060 vehicles in Q1, a new quarterly record representing an increase of 423% year-over-year. As of March 31, cumulative deliveries of the ES8, ES6 and EC6 reached 95,701 vehicles.
XPeng (XPEV) also announced that it delivered a total of 5,102 Smart EVs in March, consisting of 2,855 P7s, the company's sports smart sedan, and 2,247 G3s, its smart compact SUV. The company's March deliveries represent a 384% increase year-over-year and a 130% increase from the previous month. The company achieved record quarterly deliveries of 13,340 Smart EVs in Q1, representing a 487% increase year-over-year. In March, the company reached the benchmark of delivering cumulative 50,000 Smart EVs and started deliveries of its P7 Wing edition which was unveiled in November last year.
The company also launched lithium iron phosphate, or LFP, battery-powered G3 SUVs and P7 sedans in China, anticipating deliveries to begin in April and May, respectively. Powered by its proprietary Navigation Guided Pilot, XPeng successfully completed China's longest autonomous driving expedition in March, setting records for autonomous driving in the production vehicle category. XPeng plans to unveil its third production model in the second quarter with deliveries planned in fourth quarter.
APPLE TO USE TESLA'S 'MEGAPACK' BATTERIES: Apple's (AAPL) most recent big energy storage project at the company's Northern California solar farm will be using battery packs from Tesla, reported Sean O'Kane of The Verge citing an email from Monterey County's planning chief. The recently announced set-up will consist of 85 Tesla lithium-ion "megapacks" that will make storing energy generated by Apple's 130-megawatt solar array possible.
BUSINESS MODEL PIVOT: Shares of Canoo (GOEV) were under pressure last Tuesday after the EV startup reported its first quarterly results post SPAC-IPO and said it would be deemphasizing engineering and engineering services.
"We at the board really feel like the best thing to do is to accelerate our derivatives and focus our talent on creating IP for the company. You also have a lot of IP leakage when you do this work. And from my perspective, if I had been more involved earlier certainly, I certainly once I started – I invested and then I took the chairmanship, we started the analysis. I had concerns about this. If you study all OEMs, you can find a partnership or something like that if it makes sense. And we'll continue to look for things, but to be a contract engineering house is just really not going to drive the best shareholder value," Executive Chairman Tony Aquila explained during the Q&A portion of the company's conference call discussing the results.
Following the news, Roth Capital analyst Craig Irwin downgraded Canoo to Neutral from Buy with a price target of $12, down from $30. The analyst cited the "hard pivot" in the business model and a reset on operations, which are "clearly still ongoing." The difficult part is where the pivot points after the reset, as Canoo has de-emphasized engineering services done for others, pushed back from the subscription model for the lifestyle vehicle, and replaced its CFO and VPCorp. Strategy, Irwin contended. The analyst also pointed out that Chairman Tony Aquila announced that the company's original SPAC guidance through year-end 2025 is no long applicable given the transition in the business model. As a result, Irwin has pulled his 2023-2025 estimates.
BUY GM, FORD: Wells Fargo analyst Colin Langan initiated coverage of General Motors (GM) with an Overweight rating and $67 price target. General Motors is leading the way in the autonomous, electric, and connected future of mobility, the analyst told investors in a research note. While restructuring work still needs to be done internationally, GM's North American operations are strong, reporting a 9.4% adjusted EBIT margin in 2020, an incredible performance in a market down 20%, said Langan.
The analyst also started coverage of Ford (F) with an Overweight rating and $15 price target. The analyst believes the new CEO Jim Farley has already accelerated the previously "glacial" pace of the Ford turnaround and simultaneously accelerated the company's shift from ICE to EV. The turnaround is a massive change, as Ford is no longer focused on having a product for all markets, but rather focused on delivering products in segments with competitive strength, pickups and SUVs, he added, pointing out that Ford North America has one of the strongest line-ups in decades with a refreshed F-150, the Mustang Mach E, and new Broncos.
ON THE SIDELINES: Barclays analyst Brian Johnson initiated coverage of Fisker (FSR) with an Equal Weight rating and $17 price target. Fisker, by focusing on its core skills of design while outsourcing manufacturing, is more capital efficient to launch cars, and has the potential "to offer fast-cycle design more akin to fashion than automotive," Johnson told investors in a research note. While the shares, if the company hits its goals, look cheap relative to Tesla, the Fisker story "is not without considerable risk," added Johnson. He sees risk to the shares as the 180-day post-merger lockup expires on April 27 and up to 43M shares become unrestricted.
'TERRIBLE' FIRST EARNINGS CALL: Last week, Williams Trading analyst Sean Milligan downgraded Romeo Power (RMO) to Hold from Buy with a $6.70 price target after the company's first earnings call as a public company disappointed. "Very few shows that start this bad, end well," said the analyst, calling Romeo's first call "terrible from a supply chain and messaging perspective." Milligan argued that Romeo Power is "situated poorly" between cell manufacturers and larger original equipment manufacturer players.
INTEREST RATES COULD BE HEADWIND: JPMorgan analyst Mark Strouse initiated coverage of Brookfield Renewable Partners (BEP) with a Neutral rating and $43 price target. Brookfield Renewable is "best in class" in the development and ownership of renewable projects, but rising interest rates could be a near-term headwind for the stock, Strouse told investors in a research note.
MARKET SHARE LOSSES, TRACTION IN COMMERCIAL: Bank of America analyst Aric Li initiated coverage of SolarEdge (SEDG) with a Neutral rating and $306 price target. The company is seeing market share losses in the U.S. residential market, but traction in commercial and international markets provides an offset, said Li, whose MW volume forecasts are about 10% higher than consensus through 2023 as he views consensus commercial and international expectations as understated. However, he expressed caution on blended average selling prices given the increasing volume mix of lower ASP larger-scale commercial and international work.
LACK OF CATALYSTS, BOARD DRAMA: Craig-Hallum analyst Richard Shannon downgraded Velodyne Lidar (VLDR) to Hold from Buy with a price target of $13, down from $20. The analyst noted that 2021 hasn't been the stellar year Velodyne had hoped for - from withdrawn guidance to public mentions of lost customers to a public Board spat. Shannon still believes in the long-term opportunity here, and thinks Velodyne has "very attractive" opportunities outside of the automotive market, namely in delivery and robotics, and believes it has a first-mover advantage in delivery in particular. However, Velodyne needs to prove out its auto capabilities though, and he doesn't think this stock is going anywhere until "this Board/family drama is resolved" and financial visibility is restored.
'LITTLE ROOM' FOR UPWARDS REVISIONS: H.C. Wainwright analyst Amit Dayal downgraded Beam Global (BEEM) to Neutral from Buy without a price target. The analyst believes near-term growth expectations are more than adequately reflected in the company's current valuation. Further, Dayal believes current expectations for 2021 are reflective of the favorable business environment Beam Global is currently operating in, "with little room to make any upwards revisions."
Beam Global
+1.08 (+2.70%)
Velodyne Lidar
-0.33 (-2.58%)
SolarEdge
-10.03 (-3.55%)
Brookfield Renewable Partners
+1.25 (+2.93%)
Romeo Power
-0.3 (-3.62%)
Ticker changed to FSRN
-0.46 (-2.72%)
Ford
+0.22 (+1.81%)
General Motors
+1.61 (+2.78%)
Canoo
-0.37 (-4.11%)
Apple
+2.37 (+1.93%)
XPeng
-0.82 (-2.22%)
Nio
-0.08 (-0.20%)
Tesla
+28.89 (+4.36%)