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.

EV SALES: Tesla delivered 72,115 China-made electric vehicles in October, down 2.6% from a month earlier, the China Passenger Car Association said on Thursday, according to Reuters. Sales of China-made Model 3 and Model Y cars edged up 0.6% from a year earlier, the publication adds. Tesla’s market share in China’s EV segment shrank to 9.89% in the third quarter from 12.98% in the second quarter and 9.93% a year earlier.

PRODUCTION: Tesla is planning to build a $26,838 car at its factory near Berline, Victoria Waldersee of Reuters reports, citing a source with knowledge of the matter. The source did not say when production would begin. The carmaker is closing in on an innovation that would allow it to die cast nearly all of the underbody of the vehicle in one piece, which would allow production to speed up and costs to lower, sources told Reuters.

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

PRICE CUTS: Lucid Group (LCID) cut prices of its Air range of luxury sedans earlier this week for a limited time ahead of the holiday season, amid stiff competition and slowing demand for electric vehicles, Reuters says. High-interest rates have hit demand for EVs, and auto manufacturers, led by the world’s most valuable automaker Tesla, have responded by cutting prices, the publication says. Lucid slashed the price of its Air Touring model to $87,500 from $95,000 and the more powerful Grand Touring by $10,000 to $115,600.

Meanwhile, Lucid Group reported production and delivery totals for Q3. Lucid produced 1,550 vehicles during Q3, plus over 700 additional vehicles in transit to Saudi Arabia for final assembly. The company delivered 1,457 vehicles during the same period.

WORKFORCE CUTS: Chinese electric vehicle maker Nio (NIO) plans to cut its workforce by 10% this month as it moves to improve efficiency and reduce costs in the face of growing competition, the company is quoted by Reuters as having said on Friday. Nio has told staff the reduction exercise would be completed in November, according to a statement to Reuters. “We still have a gap between our overall performance and expectations. This is a tough but necessary decision against the fierce competition,” Nio is said to have told staff in an email, adding that it needed to improve efficiency and ensure adequate resources.

OCTOBER DELIVERIES: Nio announced its October delivery results. Nio delivered 16,074 vehicles in October, increasing by 59.8% year-over-year. The deliveries consisted of 11,086 premium smart electric SUVs, and 4,988 premium smart electric sedans. Cumulative deliveries of NIO vehicles reached 415,623 as of October 31.

Li Auto (LI) also announced that the company delivered 40,422 vehicles in October, representing an increase of 302.1% year over year. Monthly deliveries exceeded the 40,000 milestone for the first time, and the cumulative deliveries of Li Auto vehicles in 2023 reached 284,647 as of the end of October.

Meanwhile, XPeng (XPEV) said that in October, the company’s Smart EV monthly deliveries reached a record high of 20,002 units, representing a 31% increase over the prior month and a 292% increase year-over-year. At the same time, the production output of XPeng G6 significantly ramped up, spurring the G6’s single-month delivery volume to reach 8,741 units, making it a battery electric SUV in the RMB 200,000-RMB 250,000 price segment.

30-DAY POSITIVE CATALYST WATCH: Citi lowered the firm’s price target on XPeng to $10.50 from $15 and kept a Sell rating on the shares, though the firm opened a “30-day positive catalyst watch” on volume and potential for a Q3/Q4 GPM beat. Citi estimates about 3,000 sales in October were sold to business rather than to consumers based on industry checks, which is long-term negative for Xpeng and hurt valuation.

MOVING TO THE SIDELINES: Wells Fargo downgraded SolarEdge Technologies (SEDG) to Equal Weight from Overweight with a price target of $82, down from $190. Although the shares trade at a discounted valuation, a lack of visibility into a recovery and “significant uncertainties” warrant a downgrade, the firm tells investors in a research note. Wells says SolarEdge’s uncertainties outweigh its discounted valuation.

Meanwhile, HSBC also downgraded SolarEdge Technologies to Hold from Buy with a price target of $80, down from $243. The firm says the company’s revenue and margin guidance cut was worse than expected due to more painful channel destocking in Europe. Loss-making seems inevitable in the next two quarters for SolarEdge before gradually recovering to a normalized level in Q3 of 2023, HBBC tells investors in a research note. The firm downgrades the shares but believes SolarEdge’s long term structural story remains intact.

On Friday, Wolfe Research had also cut SolarEdge Technologies’ rating to Peer Perform from Outperform without a price target. The firm sadi SolarEdge’s Q4 guide further highlights the challenges facing residential solar globally. Wolfe sees the company’s normalized revenue model as a fair proxy to value the stock and no longer sees enough upside relative to the risks.

This came a day after Citi downgraded SolarEdge Technologies to Neutral from Buy with a price target of $77, down from $187. The firm expected Q3 to be a “rough quarter” but says the situation for SolarEdge “is much worse than we anticipated.” The company’s gross margin will be persistently low over the near to medium term given a more severe need for inventory reduction and as fixed costs are meaningfully higher than expected, citi tells investors in a research note. The firm expects SolarEdge to face demand and margin headwinds through late 2024 and for the stock to be range bound and “in the penalty box until then.” Product pricing and competition has made the outlook in the near to medium term even more uncertain, says Citi. As such, it awaits a better entry point into the name.

Guggenheim, BMO Capital and Truist also moved to the sidelines on the name on Thursday, citing similar reasons.

SHOW ME STORY: Northland downgraded Sunrun (RUN) to Market Perform from Outperform with a price target of $12, down from $31, after the company reported a Q3 revenue miss and significantly lowered its fiscal year growth guidance for Solar Capacity Installed. Sunrun said it is making a strategic shift to now heavily focus on “storage first,” but the firm believes such “a sudden and arguably delayed strategy” will further depress bottom line in the near-medium term and would prefer to be on the sidelines for what it now calls a “show me first” story.