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What You Missed This Week in EVs and Clean Energy
The Fly

What You Missed This Week in EVs and Clean Energy

Tesla reportedly cancels solar projects in mass across the U.S., considers sending China-made cars to U.S.

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.

SOLAR PROJECTS CANCELLATION: Tesla has canceled solar projects in mass across the U.S. as the company says that it is shutting down its solar operations in some markets, Electrek‘s Fred Lambert reports. Over the last 3 days, Electrek has received half a dozen reports from Tesla Solar customers who have been informed by the company that Tesla would not be moving forward with their projects and canceling the order. In the email to customers, Tesla writes that it is no longer servicing the areas where those customers are located, Lambert says. We have received reports from customers in major solar markets including the greater Los Angeles area, Northern California, Oregon, and Florida.

CHINA-MADE EXPORT REPORT CALLED "FALSE": Tesla is considering exporting electric cars that were made in China to the United States, Reuters reported, citing two people with knowledge of the planning. The company has been studying whether parts made by its China-based suppliers are compliant with local regulations in North America, and if they are, could ship China-made Model Y and Model 3 cars to the U.S. as soon as next year, sources told Reuters. In response to the report, Tesla CEO Elon Musk replied it was "false" on Twitter.

BEST IDEAS LIST REMOVAL: Wedbush analyst Daniel Ives removed Tesla from the firm’s "Best Ideas" list given his near-term view that things are "increasingly becoming more challenged," though his longer-term bullish view of Tesla remains generally unchanged. He sees "a very nervous few months ahead for Tesla investors" as they "remain the ones that have been punched again and again by the Musk Twitter antics," Ives said. Although the stock is "deep in the investor penalty box until deliveries hit in early January," Ives keeps an Outperform rating on Tesla shares.

TESLA RECALL: Tesla is voluntarily recalling 40,168 2017-2021 Model S and Model X vehicles that could experience a loss of power steering assist, according to a filing with the National Highway Traffic Administration. Tesla said as of November 1, 97% of the recalled cars have installed an update that addresses the problem and no further action is necessary from those owners.

RIVIAN PRODUCTION GUIDANCE AFFIRMED: Rivian Automotive affirmed its 2022 production guidance 25,000 total units produced. The company said, "Based on our latest understanding of the supply chain environment, we are reaffirming our 2022 production guidance of 25,000 total units produced. We are also reaffirming the annual guidance provided during our second quarter earnings call of $(5,450) million in Adjusted EBITDA. We are lowering our Capital Expenditure guidance to $1,750 million due to our streamlined product roadmap and the shift of certain capital expenditures to 2023. We continue to work with the state of Georgia and the Joint Development Authority and expect our R2 platform will launch in 2026. We expect the R2 platform will unlock a global market opportunity for Rivian and are excited about the early development work that is underway. We remain confident in our ability to fund operations with cash on hand through 2025, excluding the impact of the investment in the currently contemplated joint venture with Mercedes-Benz."

PROJECT GRAVITY SUV RESERVATIONS: Lucid Group (LCID) plans to open reservations for Project Gravity SUV in early 2023. "We continue to have strong demand with over 34,000 reservations as of November 7, 2022," said Sherry House, Lucid’s CFO. "We plan to open reservations for Project Gravity SUV in early 2023, which we believe will unlock a very large and incremental addressable market for us. We remain intently focused on scaling the business and continue to expect to see significant growth in revenue as delivery volumes ramp."

ENDURANCE DELIVERIES: Lordstown Motors (RIDE) reaffirmed "Q4 start of deliveries of Endurance, subject to full homologation and required certification, which is expected later this quarter; awaiting approval from EPA and CARB. All FMVSS crash testing has been successfully completed; remaining non-crash testing ongoing; continue to target initial production batch of up to 500 units; seeking OEM partnerships to scale Endurance; pre-development work on next vehicle has begun by LMC, in collaboration with Foxconn EV ecosystem, including MIH consortium; Foxconn has agreed to make an additional investment in Lordstown Motors of up to $170M, subject to certain terms and conditions; and yarget year end cash and short-term investments of $150M-$165M, including Foxconn initial investment, and excluding contingent liabilities and other financings."

ON THE SIDELINES: China Renaissance analyst Yiming Wang downgraded Nio (NIO) to Hold from Buy with a price target of $12.30, down from $24.30, after the company’s net loss widened in Q3 on lower GPM and higher expense ratios. Despite five new models in its pipeline for 2023, Wang expects losses to continue to widen given Nio’s "low profitability and high expense ratio," the analyst tells investors.

Guggenheim analyst Joseph Osha initiated coverage of SunPower (SPWR) with a Neutral rating and no price target. While he thinks the company’s efforts to reposition itself purely as a residential solar competitor are "bearing fruit" and believes the new management team has "the right focus," Osha views the stock as fairly valued given the current valuation and the company’s "minimal free cash flow."

BUY BEEM GLOBAL: H.C. Wainwright analyst Amit Dayal upgraded Beam Global (BEEM) to Buy from Neutral with a $30 price target. The upgrade is based on the "significant build up in backlog" that sets the company up to deliver over 100% revenue growth in 2023, Dayal tells investors in a research note. The analyst also expects meaningful margin improvements, supported by larger volumes of shipments and better capacity utilization. Further, he sees a "highly favorable" regulatory environment for Beam Global post the passage of the Inflation Reduction Act.

SUPPLY CHAIN CHALLENGES EASING: Northland analyst Gus Richard upgraded SolarEdge (SEDG) to Market Perform from Underperform. While noting that SolarEdge missed Q3 EPS consensus by (53c) and his estimate by (58c), Richard said the miss was due to foreign currency devaluation and a higher tax rate. While also arguing that "execution has been less than stellar," the demand environment is "specular" and logistic and supply chain challenges are easing, said Richard, who tells investors that he thinks "it is becoming more challenging" for SolarEdge to underperform.

VELODYNE LIDAR, OUSTER MERGER: Oppenheimer analyst Colin Rusch downgraded Velodyne Lidar (VLDR) to Perform from Outperform. With Velodyne Lidar announcing its merger with Ouster (OUST), the analyst believes the combined platform is poised to substantially outgrow peers with an industry-leading IP and product portfolio combined with a strong balance sheet and a highly capable management team. While bullish on the merger and believing the combined entity will be able to execute on its target of $75M in annual cost savings, he is moving to the sidelines on Velodyne Lidar shares for now as details of the merger are finalized. Rusch expects further information to become available in early 2023 and will re-evaluate his valuation at that point.

Meanwhile, Craig-Hallum analyst Richard Shannon upgraded Velodyne Lidar to Hold from Sell with a price target of 85c, down from $1. The analyst notes the company’s quarter was in-line with billings flat quarter-over-quarter, and opex coming down meaningfully, showing Velodyne is making good on its commitment to right-size the ship. The company’s guide up quarter-over-quarter, likely continued opex reductions, and improving supply chain, show stabilizing business fundamentals that should meaningfully reduce cash burn and give investors more confidence in a stock that’s trading with a negative EV on today’s cash balance, Shannon argues. That said, the biggest dynamic for investors in this stock today is the proposed merger with Ouster, he argues.

Keywords: charged, ev, electric vehicles, clean energy, solar, batteries

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