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.

FACING CHALLENGES: HSBC initiated coverage of Tesla with a Reduce rating and $146 price target. Tesla cars may well be the main driver of revenue and profits currently, but if the group is to be taken at its word, the future for Tesla is about robots, autonomous vehicles, energy storage and super-computers, the firm tells investors in a research note. HSBC adds, however, that the expected cost of capital for these businesses should be well above the group average given the regulatory and technological challenges they face.

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

EARNINGS: On Tuesday, Rivian Automotive reported Q3 adjusted EPS ($1.19), with consensus at ($1.33), and Q3 revenue $1.34B, with consensus at $1.31B. The company said, “We produced 16,304 vehicles in the third quarter of 2023. This represents our strongest quarterly production volume to-date and importantly, required navigating the complexities of introducing new consumer variants in the manufacturing process, including the Dual-Motor and Max pack R1 vehicles. Increasing our production is one of the primary levers in our path to profitability.”
“Due to the progress experienced on our production lines, the ramp of our in-house motor line, and the supply chain outlook, we are increasing our 2023 production guidance to 54,000 total units. Our progress on cost management has also continued and therefore we are improving our Adj. EBITDA guidance to $(4,000) million. We are also lowering our capital expenditures guidance to $1,100 million,” Rivian added.

MOVING TO THE SIDELINES: R.F. Lafferty downgraded Lucid Group (LCID) to Hold from Buy with a price target of $5, down from $10. The company’s Q3 production fell by 37% to 1,550 cars and management reduced its production forecast to between 8,000 to 8,500, lower than its prior guidance of 10,000 cars, to match output with demand, R.F. Lafferty tells investors in a research note. The firm says the downgrade reflects the weaker than expected demand caused by the effect of higher interest rates and recent electric vehicle price wars.

Cantor Fitzgerald also downgraded Lucid Group to Neutral from Overweight with a price target of $6, down from $10, citing lower expected revenues, persistent large negative gross margins, revision of the company’s annual production guidance and industry demand slowdown. After having reported Q3 revenue below FactSet’s consensus, Lucid revised its FY23 annual production guidance to 8,000-8,500, notes the firm, which also notes that the company had previously revised its guidance on May 8.

Earlier in the week, Lucid had reported quarterly results, with Q3 EPS coming at (28c) and revenue at $137.8M. Consensus was at (35c) and $192.72M, respectively. The company is also adjusting its production outlook for 2023 to 8,000 – 8,500 vehicles to prudently align with deliveries.

GOING CONCERN WARNING: Wolfe Research downgraded Plug Power (PLUG) to Peer Perform from Outperform and removed the firm’s prior $15 price target after the company added “going concern” language due to its liquidity needs. Even after the stock hit yesterday, there’s still significant execution risk both on operations and financing and the going concern disclosure in the recent quarterly report and related liquidity and financing overhang “makes it tough to value PLUG here,” the firm tells investors.

Jefferies also downgraded Plug Power to Hold from Buy with a price target of $6, down from $12, citing execution, cash burn and “going concern” language in the company’s latest quarterly filing. Even if the company is able to secure near-term bridge financing, “execution remains key” and the firm awaits improved execution while stating that funding and 45V guidance “remain important catalysts.”

Meanwhile, RBC Capital, Northland and Oppenheimer also downgraded the name to Neutral-equivalent ratings voicing similar concerns.