What You Missed This Week in EVs and Clean Energy

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Tesla recalls nearly 1.1M U.S. vehicles, Li Auto cuts Q3 delivery outlook

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.

TESLA “RECALL”: 

Tesla is recalling nearly 1.1 million U.S. vehicles because the window automatic reversal system may not react correctly after detecting an obstruction, increasing the risk of injury. The company told the NHTSA that it would perform an over-the-air software update of the automatic window reversal system. The recall covers some 2017-2022 Model 3, 2020-2021 Model Y, and 2021-2022 Model S and Model X vehicles. Tesla is not aware of any warranty claims, field reports, crashes, injuries, or deaths related to the recall.

In response to a tweet saying, “A headline is circulating this morning that Tesla $TSLA is recalling 1.1 million vehicles. This is typical NHTSA FUD. Tesla said it will perform an over-the-air software update to solve the issue with the automatic window reversal system. This is *not* a physical recall,” Tesla CEO Elon Musk tweeted, “The terminology is outdated & inaccurate. This is a tiny over-the-air software update. To the best of our knowledge, there have been no injuries.”

LI DELIVERY OUTLOOK CUT: 

Li Auto (LI) provided an updated delivery outlook for the third quarter, saying it now expects to deliver approximately 25,500 vehicles for the third quarter, revised from the previous vehicle delivery outlook of between 27,000 and 29,000 units. The revision is a direct consequence of the supply chain constraint, while the underlying demand for the company’s vehicles remains robust. The company will continue to closely collaborate with its supply chain partners to resolve the bottleneck and accelerate production.

EV EXPANSION: 

Hertz (HTZ) and General Motors announced an agreement in which Hertz plans to order up to 175,000 Chevrolet, Buick, GMC, Cadillac and BrightDrop EVs over the next five years. Hertz and GM believe this plan is the largest expansion of EVs among fleet customers and the broadest because it spans a wide range of vehicle categories and price points, from compact and midsize SUVs to pickups, luxury vehicles and more, the companies said in a statement. The agreement will encompass electric vehicle deliveries through 2027 as Hertz increases the EV component of its fleet and GM accelerates production of EVs broadly.

Over this period, Hertz estimates that its customers could travel more than 8 billion miles in these EVs, saving approximately 3.5 million metric tons of carbon dioxide equivalent emissions compared to similar gasoline-powered vehicles traveling such a distance. Hertz expects to begin taking delivery of Chevrolet Bolt EVs and Bolt EUVs in the first quarter of next year. GM deliveries to Hertz are projected to increase as GM rapidly scales its EV production between 2023 and 2025, driven by the opening of Ultium Cells battery cell plants in Ohio, Tennessee and Michigan. GM plans annual production capacity of 1 million EVs in North America by 2025.

ON THE SIDELINES: 

Needham analyst Vikram Bagri initiated coverage of Rivian Automotive (RIVN) with a Hold rating. The analyst sees the company emerging as a leader in the EV truck race with their “innovative” designs that not only have the horsepower of trucks but luxury and speed attributes of high-end cars. Bagri further noted that Rivian’s large order for commercial vehicles and a smaller SUV model on the horizon should drive continued market share gains, though he also sees valuation on the stock as full.

LUMINAR: 

JPMorgan analyst Samik Chatterjee initiated coverage of Luminar Technologies (LAZR) with an Overweight rating. The analyst thinks Luminar could exit the decade with the strongest revenue amongst the peer group despite a smaller order book relative to Innoviz (INVZ) currently. The higher revenue run-rate is driven by the company’s focus on L3+ applications, which is driving certain car markers to make LiDAR standard on vehicles with L2 functionality as they plan their L3 platforms, Chatterjee told investors in a research note.


Meanwhile, Northland analyst Gus Richard downgraded Luminar to Market Perform from Outperform. The company confirms that it will be production ready by year-end, but he believes the adoption of its lidar is taking longer than expected, Richard told investors.

VELODYNE: 

JPMorgan analyst Samik Chatterjee initiated coverage of Velodyne Lidar (VLDR) with an Underweight rating and no price target. The company is a diversified LiDAR supplier but has gained limited success in autos, Chatterjee told investors in a research note. He believes Velodyne has to “right-size operations for the limited success it has had in series production wins” with automakers to date. Velodyne might be the laggard in relation to revenue prospects amongst the peer group, the analyst wrote.

Originally Posted September 26, 2022 – What You Missed This Week in EVs and Clean Energy

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