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.

STALLING EV MOMENTUM: Morgan Stanley lowered the firm’s price target on Tesla to $345 from $380 and keeps an Overweight rating on the shares ahead of Tesla reporting Q4 results this coming Wednesday, January 24. The EV market is over-supplied versus demand and global EV momentum is stalling, notes the firm. Morgan Stanley anticipates Tesla’s 2024 outlook to be cautious on volume and profitability and rather than wait for what it expects to be a clearly cautious outlook for 2024, the firm wanted to mark-to-market its 2024 and 2025 estimates “ahead of time.” Morgan Stanley’s 2024 non-GAAP EPS estimate falls below $2 and it sees “tough sledding for EVs,” but remains Overweight on Tesla, citing AI and robotics optionality.

Barclays also lowered the firm’s price target on Tesla to $250 from $260, while keeping an Equal Weight rating on the shares. The firm believes the most central theme for Tesla in 2024 is that it faces volume pressure in a demand constrained environment. This year marks the first time in the company’s history that volume will likely be more a function of demand than of Tesla’s production capacity, possibly causing investors to revisit long-term volume expectations, Barclays tells investors in a research note. The firm expects Tesla to deliver 1.97M units in 2024, below the consensus at 2.19M units, and marking “only” 9% year-over-year growth in deliveries. Barclays also sees the potential for a disappointing 2024 volume guide, perhaps around 2M units, but Barclays could see CEO Elon Musk “stoking interest” by citing potential on the earnings call for 2.2M-2.4M units if the macro and rate environment is more supportive.

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

UBER WORKING WITH TESLA: Uber (UBER) is working with Tesla to urge its drivers to switch to EVs in a bid to be emissions-free in the U.S. and Canada by 2030, including by sharing trip data, Joann Muller of Axios reports. Uber has begun sharing data with Tesla about where its drivers do most of their trips, starting in New York City, and is also offering drivers incentives of up to $2,000 on the purchase of a Tesla Model 3 or Model Y, Muller writes.

RIVIAN RISK: Deutsche Bank downgraded Rivian Automotive to Hold from Buy with a price target of $19, down from $29. The firm sees downside to the company’s 2024 volume and margin outlook. While the planned R2 unveil could help investor sentiment, there remains many other questions post the announcement including timing of capital needs, production ramp, and profitability, Deutsche tells investors in a research note. The firm expects 2024 volume guidance of just 65,000 units from Rivian amid prolonged factory shutdowns and a slow ramp up. This could result in continued deep losses through Q3, which are unlikely to be offset by potential positive gross margins in Q4, contends Deutsche Bank.

BRAKING LOSS COMPLAINTS: The NHTSA’s Office of Defects Investigation issued a notice Tuesday that it is probing Fisker’s (FSR) Ocean SUV for loss of braking performance. NHTSA says the Ocean can experience “partial loss of braking over low traction surfaces, without alerting the driver,” which “results in a sudden increase in stopping distance,” according to the braking complaints referenced by ODI, which were submitted between October and December 2023. The complaints also reference problems with the Ocean’s regenerative braking. The ODI has received nine complaints alleging loss of braking performance in model year 2023 Fisker Ocean vehicles, it said.

MOVING TO FISKER SIDELINES: TD Cowen downgraded Fisker to Market Perform from Outperform with a price target of $1, down from $11. A shift in distribution strategy, continued delivery issues, missed timelines and an overall softening in the overall electric vehicle market “have taken the luster off of this once shiny new vehicle manufacturer,” the firm tells investors in a research note. TD Cowen says the most recent pain point for Fisker came with the news of the company facing a possible National Highway Traffic Safety Administration probe stemming from complaints associated with the Ocean’s braking system. “Unanticipated growing pains continue to accumulate” for Fisker, contends the firm.

SOLIS SOLAR TRUCK COVER: Worksport (WKSP) announces that the SOLIS Solar Cover will be available for Ford, RAM (STLA) and General Motors light pickup trucks. Simultaneous with this message, Worksport announces it has successfully placed its first substantial order of solar panels, specifically designed for the SOLIS Solar Cover. The first shipment of advanced solar panels is expected to arrive within a few months – between January and February 2024. This represents a critical step in bringing this innovative technology to market. Upon arrival, the panels will undergo final quality testing, ensuring they meet the company’s high standards for performance and reliability.

FORD LIGHTNING PRODUCTION CUT: Ford Motor announced plans to create nearly 900 new jobs as part of a new third crew at Michigan Assembly Plant in Wayne to meet demand for the popular Bronco and Bronco Raptor and the all-new Ranger and Ranger Raptor. In addition to nearly 900 net new hires, the new 1,600-person third crew at Michigan Assembly Plant will also include approximately 700 employees from Ford’s Rouge Complex in Dearborn who applied for job openings. Ford is adding the manpower this summer to support planned future volume increases for vehicle lines assembled at the plant. The all-new Ranger and Ranger Raptor are on track to launch this year. Michigan Assembly Plant will transition to producing vehicles seven days a week versus five currently, with three crews working two shifts. The company also has capacity available to scale production of gas-powered and hybrid F-150 trucks based on customer demand.

Approximately 1,400 employees will be impacted as the Rouge Electric Vehicle Center transitions to one shift effective April 1. Roughly 700 will transfer to Michigan Assembly Plant and the others will be placed in roles at the Rouge Complex or other facilities in Southeast Michigan, or take advantage of the Special Retirement Incentive Program agreed to in the 2023 Ford-UAW contract. A few dozen employees could be impacted at component plants supporting F-150 Lightning production, depending on the number of employees who apply for the Special Retirement Incentive Program. Ford would provide placements for impacted employees within Southeast Michigan. “We are taking advantage of our manufacturing flexibility to offer customers choices while balancing our growth and profitability. Customers love the F-150 Lightning, America’s best-selling EV pickup. We see a bright future for electric vehicles for specific consumers, especially with our upcoming digitally advanced EVs and access to Tesla’s charging network beginning this quarter,” said Ford President and CEO Jim Farley.

SELL SOLAREDGE: Barclays downgraded SolarEdge Technologies (SEDG) to Underweight from Equal Weight with a price target of $50, down from $74. Consensus estimates will need to come down for both SolarEdge and Enphase Energy (ENPH), but the magnitude is larger for SolarEdge, the Barclays tells investors in a research note. The firm calculates that SolarEdge is trading at a three-turn premium to Enphase based on 2025 earnings estimates. Due to the better recovery expect for Enphase and also the higher gross margins, Barclays thinks these valuations should be flipped with Enphase trading at a premium. As a result, the firm downgraded SolarEdge Underweight and raised its price target for Equal Weight-rated Enphase Energy to $106.

Meanwhile, SolarEdge announced a restructuring plan that includes workforce reduction designed to reduce operating expenses and align its cost structure to current market dynamics. The workforce reduction impacts approximately 16% of the SolarEdge global workforce, or approximately 900 employees, of which approximately 500 are from the company’s various manufacturing sites. The reduction follows measures which the company has already taken to align with current market conditions, including discontinuation of manufacturing in Mexico, reduction of manufacturing capacity in China, and termination of the company’s light commercial vehicle e-mobility activity. Further detail will be provided in the company’s end-of-year earnings release which is expected to be released by the end of February 2024.

SOFT BOOKINGS: Barclays downgraded Array Technologies (ARRY) to Equal Weight from Overweight with a price target of $15, down from $22. Given weak bookings year-to-date and an expectation for a soft bookings again in Q4, the firm lowered Array’s fiscal 2024 revenue estimate to $1.59B, reflecting 4% year-over-year growth and more than 15% below consensus.

RISK OF ORDER BOOK LOSS: Deutsche Bank downgraded Luminar (LAZR) to Hold from Buy with a price target of $4, down from $11. In conversations with industry players at CES, it seems like Luminar may be losing some existing order book to peers like Aeva and Innoviz, the firm tells investors in a research note. Deutsche Bank believes these data points suggest competitive threats from peers for Luminar. In particular, Mobileye (MBLY) recently won a design win from VW and Deutsche wonders if Innoviz lidars might be selected for the SuperVision program, as an extension for ID Buzz, says the firm.