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.

PAY PACKAGE: Bernstein believes Tesla CEO Elon Musk’s $56B pay package is unlikely to pass the shareholder vote coming later this week. Around 25% of eligible voting shares are held by either passives, who are likely to follow the “no” recommendation of ISS and Glass Lewis, or institutional investors who have publicly announced their intention to vote no, the firm tells investors in a research note. Bernstein points out that Tesla has never seen more than 63% voter turnout in any shareholder vote. Even assuming turnout is much higher at 75%, Tesla would need over 73% of the unaccounted-for voters to vote yes for the pay package to pass, the firm adds.

The chances of Tesla’s proposed re-domestication to Texas being approved are higher, but still uncertain, it notes. The firm says that if Musk’s pay package is blocked, Tesla’s diluted share count would decrease by 9% going forward, increasing earnings per share by 10%. However, if the pay package is rejected, the stock would likely be down 5% or more amid fears that Musk might leave Tesla, according to Bernstein. The firm keeps an Underperform rating on Tesla with a $120 price target. It believes investors may be underestimating the risk that Musk’s pay package is rejected, making the risk/reward into the shareholder vote currently skewed to downside.

Over the weekend, Reuters’ Louise Rasmussen and Gwladys Fouche reported that Norway’s $1.7 trillion sovereign wealth fund said on Saturday it will vote against ratifying Tesla CEO Elon Musk’s $56 billion pay package, which is up for a shareholder vote next week, after a Delaware judge invalidated it earlier this year. The fund is Tesla’s eighth-biggest shareholder, according to LSEG data. In 2018, the fund had voted against the package.

NO REFRESHED MODEL Y: Tesla’s CEO Elon Musk says Tesla will not launch a refreshed Model Y this year. According to a post on X, formerly Twitter, “No Model Y “refresh” is coming out this year. I should note that Tesla continuously improves its cars, so even a car that is 6 months newer will be a little better.” Reference Link

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

RESIDENTIAL SOLAR: Residential solar shrank by 25% year-over-year as the segment continued to struggle with high interest rates and the transition to net billing in California, according to the Solar Energy Industries Association. With 1.3 GWdc installed, it was the segment’s lowest quarter since Q1 2022, the firm noted. The U.S. solar industry installed 11.8 gigawatts-direct current of capacity in Q1 of 2024, the second best quarter for the industry, behind the last quarter of 2023, the SEIA added. Publicly traded companies in the solar space include Array Technologies (ARRY), Canadian Solar (CSIQ), Emeren (SOL), FTC Solar (FTCI), First Solar (FSLR), JinkoSolar (JKS), Maxeon Solar (MAXN), Shoals Technologies (SHLS), SolarEdge (SEDG) and SunPower (SPWR).

SELL MAXEON SOLAR: Goldman Sachs double downgraded Maxeon Solar to Sell from Buy with a price target of $1, down from $11. The firm says weak market conditions and a lack of Department of Energy loan lead to financing uncertainty for Maxeon. The company surprised the market by announcing an equity investment from TZE alongside a debt restructuring that would result in a “decided shift” in Maxeon’s capital structure and, given the proposed new share issuance, likely dilute existing shareholders, Goldman tells investors in a research note. The firm believes that while the deal should help alleviate liquidity concerns given weak market conditions, the company noted increased uncertainty around future funding.