What You Missed This Week in EVs and Clean Energy

CEO Elon Musk says Tesla will try out "a little bit of advertising"

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.

ADVERTISING CAMPAIGN: Following Tesla’s annual shareholder meeting, Wedbush said it believes Elon Musk will remain CEO of Tesla for at least another 5 years as the company navigates this next phase of its EV growth, which Wedbush still views in the early innings. During the meeting, an investor asked about a potential advertising campaign to teach more about the full Tesla story, which Musk responded with the company will try out "a little bit of advertising." The firm views this as "a major positive" for Tesla as many parts of the Tesla product portfolio are undervalued by the Street with FSD a "major potential value adder" on top of the company’s expanding product portfolio across auto and energy as many in the general public does not know about the affordability and capabilities of the company’s products. Wedbush believes no advertising was the right strategy for Musk & Co. in the past but is no longer the best path forward as competition increases across the EV landscape. The firm has an Outperform rating on the shares with a price target of $215.

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

MANUFACTURING BASE PLANS: India’s deputy minister for technology Rajeev Chandrasekhar said that Tesla is "serious" about its plans to build a manufacturing base in the South Asian country, Reuters’ Munsif Vengattil and Aditya Kalra report. "They are very seriously looking at India as a production and innovation base," Chandrasekhar told Reuters in an interview. "We have signalled to them that the government of India is working together (and) will certainly make whatever ambitions they have or investment objective they have in India a success," he added.

GUIDANCE: Ford again reiterated its expectations for full-year 2023 adjusted EBIT of $9B-$11B and adjusted free cash flow of about $6B. The company continues to anticipate EBIT of about $7B for Ford Blue, up modestly from 2022, and approaching $6B for Ford Pro, nearly double last year, and a full-year loss of about $3B for the startup Ford Model e. Ford Model e’s growth expectations include a production capacity run-rate of 2M EVs by the end of 2026 and beyond.

Meanwhile, Ford has entered into a long-term agreement with Nemaska Lithium for the supply of lithium products, including lithium hydroxide, over an 11-year period. The agreement calls for the delivery of up to 13,000 tons of lithium hydroxide per year. EnergySource Minerals, or ESM, also announced a binding lithium supply contract with Ford. ESM will supply Ford with lithium hydroxide produced at ESM’s Project ATLiS, located in Imperial Valley California. Project ATLiS is expected to be operational in 2025.

Additionally, Compass Minerals (CMP) announced the signing of a binding, multiyear supply agreement to provide Ford Motor with battery-grade lithium carbonate from its Ogden, Utah, lithium brine development project, while Albemarle (ALB) announced a definitive agreement with Ford to deliver battery-grade lithium hydroxide to support the automaker’s ability to scale electric vehicle, or EV, production. Albemarle will supply more than 100,000 metric tons of battery-grade lithium hydroxide for approximately 3M future Ford EV batteries. The five-year supply agreement starts in 2026 and continues through 2030.

Lastly, SQM (SQM) and Ford announced a long-term strategic agreement to secure the supply of lithium products for production of electric vehicles. The agreement between Ford and SQM will ensure the supply of battery-grade lithium carbonate and lithium hydroxide, essential components to manufacture high-performance electric vehicle batteries.

SECULAR SOLAR UPTREND: Seaport Research initiated coverage of Array Technologies (ARRY) with a Buy rating and $30 price target. As the world’s second largest provider of tracker solutions for utility-scale solar projects, Array’s earnings should grow on the back of the continued secular uptrend in tracker deployments, with global installations from 2020 to 2023 expected to total 650 to 700 GW, the firm tells investors in a research note. For 2023, Seaport sees potential upside to management’s guidance ceiling from the company’s possible realization of a higher than assumed selling prices and/or extension of recent market share gains.

BUY BLOOM ENERGY: JPMorgan analyst Mark Strouse upgraded Bloom Energy (BE) to Overweight from Neutral with a price target of $20, down from $22. The recent pullback in the shares, down 45% since mid-February, is overdone, JPMorgan tells investors in a research note. The firm believes investors can take advantage of the volatility to add to positions in a stock that it says will be a long-term beneficiary of the energy transition. Bloom’s upcoming analyst day, contract announcements, continued efficiency improvements in the Fremont facility, and more details regarding specific impacts from the Inflation Reduction Act could serve as catalysts for the stock, JPMorgan says.

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