What You Missed This Week in EVs and Clean Energy

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.

TACTICAL IDEAS LIST: Wells Fargo added Tesla to the firm’s Q2 “Tactical Ideas List” and keeps an Underweight rating on the shares with a $125 price target. The firm sees moderating delivery growth driven by lower demand and diminished return on price cuts. It estimates Tesla’s auto gross margin excluding credits fall by 130 basis points year-over-year in Q1 given the likelihood of more price cuts and lower volumes. Wells’ fiscal 2024 delivery estimate of 1.8M units represents flat year-over-year growth and remains 10% below consensus. It remains concerned with recent flattening trends across all three of Tesla’s key regions – the U.S., European Union and China.

LOWER ESTIMATES: RBC Capital kept an Outperform rating and $298 price target on Tesla but reduced the firm’s estimate for deliveries in Q1 to 446K from its initially estimated 500K, which is also about 3% below consensus. The firm cited registration data and app downloads while noting that Tesla is expected to report Q1 deliveries in the first week of April.

Meanwhile, Deutsche Bank lowered the firm’s price target on Tesla to $200 from $218 but maintained a Buy rating on the shares. The firm also cut Q1 estimates again for Tesla to reflect weaker than expected China sales and the company’s recent plan to cut production in the region. For Q1, the firm now expects 414,000 deliveries, down from 427,000 units, due to weaker than expected sales in China in the last few weeks of March.

Deutsche also cut its full year deliveries estimate to 1.9M units, below the consensus of 2.06M, which represents “only” mid-single digit growth for the year. It continues to see pressure on Tesla’s margins and earnings, as the company already announced deep price cuts in both China and Europe earlier in the quarter, and made further moderate price adjustments in February to incentivize vehicle purchases. While Tesla announced it will raise prices in the U.S. and China effective April, this is an attempt to boost sales in March, rather than a sign of solid demand, Deutsche Bank contends.

Keeping an Overweight rating on Tesla, Morgan Stanley reduced its Q1 deliveries estimate. The firm cut its Q1 deliveries estimate to 425,400 units from 469,400 and fiscal 2024 estimate to 1.954M units from 1.998M. Morgan Stanley cited its latest channel checks, including China data and electric vehicle volumes, ahead of Tesla’s April 1 delivery release for the reduction. The firm, however, is looking for price increases and cost-cutting actions “to compensate” for lower deliveries.

CATL PARTNERSHIP: Morgan Stanley noted that Bloomberg recently reported that Contemporary Amperex Technology Co. Ltd., or CATL, is working with Tesla on faster charging batteries, which follows news that CATL is supplying machinery to Tesla’s Giga Nevada factory. China’s CATL is effectively barred from selling into the U.S. directly, but is able to license battery tech to partners and charge a royalty fee, noted the analyst, who notes that the U.S. is an under-penetrated EV market in need of high quality, cheap battery tech and that China is a highly penetrated EV market with an oversupply of batteries. The firm, which believes a Tesla-CATL partnership “could be a game changer” for the U.S. electric vehicle market, has an Overweight rating and $320 price target on Tesla shares.

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

OCEAN SUV PRICE CUT: Fisker (FSR) “announced reductions in Manufacturer’s Suggested Retail Price, OR MSRP, on many model year 2023 Fisker Oceans in the US. Fisker is lowering the MSRP of the 2023 Ocean Extreme trim by $24,000, to $37,499 from $61,499 MSRP. In addition, The 2023 Ultra trim will be priced at $34,999 MSRP, reduced from the current $52,999; and the 2023 Sport will be priced at $24,999 MSRP, reduced from the current $38,999. All reduced-MSRP Fisker Ocean trims are 2023 models, with Fisker’s latest 2024 Ocean OS software version 2.0 installed. Certain Ocean vehicles come equipped with as much as $7,000 worth of additional options – such as colors, 22″ wheels, interiors, and other options – included in the discounted price. MSRP reductions on 2023 model year vehicles will go into effect Friday, March 29, 2024.”

DELIVERIES: Nio (NIO) announced its March and first quarter 2024 delivery results. The company delivered 11,866 vehicles in March, increasing by 14.3% year-over-year. The deliveries consisted of 6,737 premium smart electric SUVs, and 5,129 premium smart electric sedans. Nio delivered 30,053 vehicles in the first quarter of 2024. Cumulative deliveries of Nio vehicles reached 479,647 as of March 31.

Meanwhile, Li Auto (LI) announced that the company delivered 28,984 vehicles in March, increasing by 39.2% year over year. This brought the company’s first-quarter deliveries to 80,400, up 52.9% year over year. The cumulative deliveries of Li Auto vehicles reached 713,764 as of the end of March, establishing Li Auto as the first Chinese emerging new energy automaker to reach a milestone of 700,000 cumulative deliveries.

XPeng (XPEV) also announced its vehicle delivery results for March and the first quarter of 2024. In March, the company delivered 9,026 Smart EVs, representing a 99% increase over the prior month and 29% increase year-over-year. The XPeng X9 maintained its position as the top-selling all-electric MPV in China, with 3,946 units delivered in March and nearly 8,000 units delivered since its launch. Overall, XPeng delivered 21,821 Smart EVs in the first quarter of 2024, a 20% increase from last year.

BUY BLOOM ENERGY: Evercore ISI initiated coverage of Bloom Energy (BE) with an Outperform rating and $21 price target. Bloom Energy’s highly efficient and low-emissions-intensive solid oxide fuel cells are increasingly gaining traction in the market and widely being accepted in the rapidly expanding end markets, including marine, aviation, data centers, BEV charging, green ammonia, steel, e-fuel, CCUS, and methanol, the firm tells investors in a research note. Evercore views Bloom’s stationary, off-grid hydrogen solutions as an emerging opportunity as interconnection bottlenecks continue to persist.