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.

GOAL OMISSION: Tesla omitted a previously stated goal to eventually sell 20 million vehicles a year from one of its yearly reports, adding to signs Elon Musk is prioritizing autonomy over its core car business, Bloomberg News’ Dana Hull reports. The company still says in the 2023 impact report it wants “to displace fossil fuels by selling as many Tesla products as possible,” as it has in previous years. However, the carmaker deleted language that appeared in its 2021 and 2022 reports which quantifies how many cars it wants to make by the end of the decade, the author notes.

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

WORKFORCE REDUCTION: In a regulatory 8-k filing, Lucid (LCID) stated that, “On May 24, 2024, Lucid Group announced a restructuring plan intended to optimize the Company’s operating expenses in response to evolving business needs and productivity improvements through a reduction of the Company’s current employee workforce by approximately 400 employees, or approximately 6%. The Company expects to substantially complete the Plan by the end of the third quarter of 2024, subject to local law and consultation requirements.

“The Company estimates that it will incur a total of approximately $21 million to $25 million in charges in connection with the Plan, which consist primarily of charges related to severance payments, employee benefits, employee transition, and stock-based compensation. The Company expects that charges of approximately $19 million to $23 million will be recognized primarily in the second quarter of 2024, with the majority of such charges anticipated to be paid by the end of the third quarter of 2024. Substantially all of these charges are expected to result in cash expenditures. The charges related to stock-based compensation are not expected to be material.”

SELL ENPHASE: GLJ Research initiated coverage of Enphase Energy (ENPH) with a Sell rating and $45.82 year-end 2024 price target. The firm sees “four structural flaws to the popular view” that Enphase’s fundamentals will return to their “post-COVID glory” in the second half of 2024. GLJ Research arrives at 2024 and 2025 adjusted EPS estimates of $1.96 and $1.98, respectively, which it compares to consensus estimates of $2.76 and $4.96, respectively.

NEAR-TERM RISK: JPMorgan downgraded NextEra Energy Partners (NEP) to Underweight from Neutral with an unchanged price target of $25. The stock has traded up 25% in the last month, drifting away from the price target, the firm tells investors in a research note. JPMorgan does not view NextEra Energy Partners as a primary beneficiary of rising power demand and believes near-term risk remains around the company’s longer-term convertible equity portfolio financing obligations and its ability to accretively finance potential dropdown acquisitions.

REMOVED FROM FOCUS LIST: JPMorgan removed Array Technologies (ARRY) from the firm’s Analyst Focus List but kepT an Overweight rating on the shares with a $29 price target. Exiting the Q1 prints for clean energy, the firm is shuffling its top picks to stocks it believes are relatively best positioned to navigate what it expects to be a volatile remainder of the year. While JPMorgan continues to believe that utility-scale solar has the highest level of demand, it says macro factors are impacting project timing while increasing geopolitical developments present risks. The firm removed Array Technologies and Shoals Technologies (SHLS) from the firm’s Analyst Focus List, believing increasing geopolitical issues and project timing uncertainty “may keep a lid on both stocks near term.” JPMorgan’s top picks are HASI (HASI) and TPI Composites (TPIC).