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.

SALES DOWN: Wells Fargo tells investors in a research note that Tesla’s April sales are down 21% year over year in North America, 1% in Europe and 21% in China, based on available data, adding that annualized April volumes imply a 1.3M pace, well below 1.8M in 2023. The firm, which made no change to its Underweight rating or $120 price target, says Tesla’s fundamentals look weak with volumes slowing and the 0.99% U.S. Model Y financing offer likely implying a large price cut, as Tesla likely needs to compensate the lender for the low rate.

FSD SOFTWARE: Tesla plans to register its “Full Self-Driving” software with China authorities ahead of its planned rollout of the feature this year, Reuters’ Zhang Yan and Kevin Krolicki report. Tesla is also considering selling the software as a monthly subscription to users of its cars in China, according to three people with knowledge of the matter. The successful software registration with China’s Ministry of Industry and Information Technology would pave the way for Tesla to internally test FSD by having its employees drive on China’s public roads before delivering it as an upgrade to its Chinese users in the coming months, two of the people say.

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

DELIVERIES: XPeng (XPEV) announced its vehicle delivery results for May 2024. The company said it delivered 10,146 Smart EVs in May, representing a 35% increase year-over-year and an 8% increase over the prior month. The XPeng X9 achieved monthly deliveries of 1,625 units, reaching a cumulative total of 11,456 units, and has continuously held its top-selling position in both the all-electric MPV and three-row model segments in China since its launch. Year-to-date, XPeng has delivered 41,360 Smart EVs, representing a 26% increase year-over-year. In May, the monthly active user penetration rate of XNGP in urban driving scenarios reached 84%. Also, by May 2024, the accredited XNGP on-road test mileage by XPENG R&D team exceeded 6.46 million kilometers, bringing the company closer to achieving XNGP’s full nationwide road coverage by the third quarter of this year.

Nio (NIO) also announced its May 2024 delivery results. The company delivered 20,544 vehicles in May 2024, representing a substantial increase of 233.8% year-over-year. The deliveries consisted of 12,164 premium smart electric SUVs, and 8,380 premium smart electric sedans. Cumulative deliveries of Nio vehicles reached 515,811 as of May 31, 2024. In May 2024, Nio further expanded its strategic cooperation on battery swapping by partnering with GAC Group and FAW Group, adding to a growing list of strategic partnerships that include its existing collaboration with Changan Automobile, Geely Group, JAC Group, Chery Automobile, and Lotus Technology. Nio is committed to establishing a rapidly evolving battery swapping ecosystem, and providing efficient and convenient recharging experiences for its users.

Meanwhile, Li Auto (LI) said the company delivered 35,020 vehicles in May 2024, up 23.8% year-over-year. The cumulative deliveries of Li Auto vehicles reached 774,571 as of the end of May 2024. “We have delivered over 15,000 Li L6s since deliveries began on April 24, setting a record pace for our newly launched models. We are fully committed to securing the supply chain and ramping up production of Li L6 to ensure users receive their vehicles at the earliest possible opportunity. Sales of the 2024 Li L7, Li L8, and Li L9 continue to gain momentum, driven by the new pricing strategy we implemented,” commented Xiang Li, chairman and chief executive officer of Li Auto.

“Our market share in the RMB200,000 and higher NEV market continues to experience healthy year-over-year growth, expanding to 13.5% for the period between January to April and strengthening our top position among Chinese auto brands. We remain cognizant of the challenges we face and will proactively embrace changes, push the boundaries for growth, and continue to create better products and services for our users.”
Lastly, Zeekr (ZK) announced it delivered 18,616 vehicles in May 2024, representing an increase of 115% year over year. The cumulative deliveries of Zeekr vehicles reached 264,397 as of the end of May 2024.

CHINESE EV TARIFF: The European Commission will postpone its decision on Chinese electric vehicle tariffs until after the European Parliament election on June 9, a source familiar with the matter told Reuters on Wednesday. The provisional tariffs, which were expected to be announced by June 5, would be a sticker shock representing billions of dollars in new costs for Chinese electric car makers, the publication adds. The delay aims to keep the issue out of the election campaign phase, said German magazine Spiegel, which first reported the news. The European Parliament election is on June 6-9.

U.S. CONVICTION LIST: Goldman Sachs analysts added Enphase Energy (ENPH) to the firm’s US Conviction List as part of its June 2024 “Directors’ Cut” update. The firm believes the company is poised to see a rebound in revenue, particularly from California, as a regulation-induced inventory de-stocking cycle dissipates.

MOVING TO THE SIDELINES: Mizuho downgraded First Solar (FSLR) to Neutral from Buy with a price target of $274, up from $209. The firm cites valuation for the downgrade. The stock already reflects First Solar’s strong pricing power, there is limited upside to Mizuho’s bull case of $325 per share, which factors in a 5c/W price adder in the U.S. and one new U.S. production line, the firm tells investors in a research note.