Welcome to The Fly's first edition of "Charged," where we look at some analysts' notes, news and activity in the electric vehicle and clean energy space.
LONG-TERM SALES OUTLOOK: On Wednesday, Goldman Sachs analyst Mark Delaney upgraded Tesla (TSLA) to Buy from Neutral with a price target of $780, up from $455, in a research note titled "Tesla to Buy on better long-term sales outlook and margin expansion." The analyst sees the shift toward battery electric vehicle adoption accelerating, noting that falling battery prices are improving the economics of EV ownership, and now believes it will occur faster than his previous view. Delaney sees Tesla's integrated model helping it "sustain a leadership position in the EV market." The analyst also sees margins expanding for Tesla, "driven by mix shift toward the Model Y." Additionally, Delaney noted that the "increased mix of software sales should also be a tailwind to margins over time."
Earlier this week, Tesla CEO Elon Musk said he was open to discussing a tie-up of his company with a rival car maker, Reuters' Edward Taylor reports. "We are definitely not going to launch a hostile takeover. If somebody said it would be a good idea to merge with Tesla, we would have this conversation," Musk said at an Axel Springer event in Berlin.
USPS DELAYS DECISION ON NGDV: Shares of Workhorse (WKHS) were under pressure earlier this week after the United States Postal Service issued an update on its Next Generation Delivery Vehicle, or NGDV, program. "In 2016, the United States Postal Service began a multi-year research program, with select suppliers, to replace its aging fleet of right-hand drive Long Life Vehicles - LLV - with the Next Generation Delivery Vehicle - NGDV - and is now nearing the end of the extensive process. The COVID-19 pandemic previously resulted in the expected production award being pushed to the end of 2020. However, amid continuing COVID-19 concerns, and in order to provide for capital investment activities and required approvals, the program schedule has been revised and a decision is now planned for quarter 2 of fiscal year 2021, or January to March 2021," the USPS said.
GM, NIKOLA REVISED DEAL: Nikola (NKLA) has announced the signing of a non-binding Memorandum of Understanding with General Motors (GM) for a global supply agreement related to the integration of GM's Hydrotec fuel-cell system into Nikola's commercial semi-trucks. This supersedes and replaces the transaction announced on September 8, 2020. Under the terms of the MOU, Nikola and GM will work together to integrate GM's Hydrotec fuel-cell technology into Nikola's Class 7 and Class 8 zero-emission semi-trucks for the medium- and long-haul trucking sectors. The MOU does not include the previously contemplated GM equity stake in Nikola or development of the Nikola Badger. As previously announced, the Nikola Badger program was dependent on an OEM partnership. Nikola will refund all previously submitted order deposits for the Nikola Badger.
HYDROGEN-POWERED VEHICLES: Plug Power (PLUG) and Gaussin said they are collaborating to bring a commercial suite of ProGen-powered Gaussin transportation vehicles to market in 2021 as a solution to decarbonize the logistics ecosystem. Integrated solutions, ranging from ProGen-powered Gaussin terminal tractors to automated guided vehicles, will use green hydrogen produced by Plug Power's best of class PEM electrolyzer solution. Plug Power and Gaussin will target new cargo markets, including logistic centers, seaports and airports in Europe, the United States, and globally beyond. The first vehicles are expected to be available commercially in early-2021.
Following the announcement, Roth Capital analyst Craig Irwin raised the firm's price target on Plug Power to $30 from $22, while keeping a Buy rating on the shares. The analyst expects the new relationship to be modestly additive to 2021 revenue, but potentially material over the longer-term.
XPENG DOWNGRADE, NIO UPGRADE: Earlier this week, UBS analyst Paul Gong downgraded Xpeng (XPEV) to Neutral from Buy with a price target of $59, up from $25. While he believes the company continues to lead in China's autonomous driving development race, after an over 200% rally in the stock he believes "investors more or less already recognize this," Gong said. Even though peers such as NIO (NIO), Geely and Great Wall are working towards autonomous driving, he believes Xpeng maintains its lead in this race.
Meanwhile, Goldman Sachs analyst Fei Fang upgraded NIO Inc. to Neutral from Sell with a price target of $59, up from $7.70. The analyst admited to underestimating the benefits to NIO from powertrain breakthroughs, the introduction of its battery as a service program, and regulatory incentives that turned around electric vehicle market demand from an ongoing decline. Combined, all of these factors have provided "significant tailwinds" to NIO's sale volumes, Fang told investors in a research note. The analyst expects an increase in electric vehicle penetration from 5% this year to 20% in 2025.
CHARGING STATIONS: Blink Charging (BLNK) announced an agreement with JSC Management Group, a Burger King (QSR) franchisee, to deploy numerous EV charging stations at Burger King locations across the Northeast. Blink will maintain ownership of the charging stations deployed at JSC Burger King locations, and additional JSC locations will be added to the Blink network in late 2020/early 2021, the company said. Twenty-six dual-port Level 2 IQ 200 charging stations will be deployed at 10 Burger King locations across the Northeast. This includes five locations that are currently operational at JSC Rhode Island and New York Burger King's locations, Blink said, adding that additional locations will be announced later.
Tesla
+5.95 (+1.00%)
Workhorse Group
-0.585 (-2.58%)
Nikola
-0.14 (-0.74%)
Plug Power
+1 (+4.19%)
XPeng
-2.065 (-4.01%)
Nio
-2.29 (-5.06%)
Blink Charging
+1.19 (+5.25%)
Restaurant Brands
+1.68 (+2.86%)
General Motors
+0.31 (+0.70%)