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>>> SPDR S&P Kensho Smart Mobility ETF (HAIL)
12-11-20
Yahoo Finance
https://finance.yahoo.com/news/7-electric-vehicle-stocks-style-133544446.html
52-Week Range: $15.70 – $53.19
YTD change: Up 71.45%
Dividend Yield: 0.24%
Expense Ratio: 0.45%
Next in line is another fund, i.e., the SPDR S&P Kensho Smart Mobility, that provides access to innovative companies behind the evolution in transportation. In addition to EV manufacturers, other companies involved in hydrogen cell, batteries, as well as drones are part of the ETF. Put another way, this is not a dedicated EV fund, which means increased diversification that could appeal to some investors.
HAIL, which started trading in 2017, currently has 56 holdings. Assets under management are close to $73 million. The top ten firms comprise over 40% of the fund. Nio, hydrogen fuel cell technology group Plug Power (NASDAQ:PLUG), Tesla, Workhorse (NASDAQ:WKHS) and components supplier BorgWarner (NYSE:BWA) head the names in the list.
In terms of sector allocation, over fifteen industry groups are represented. Automobile Manufacturers lead with 24.70%. Next in line are Auto Parts & Equipment (21.08%), and Semiconductors (11.70%). Year-to-date, the fund is up over 70% and hit an all-time high in late November.
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>>> Best Industrial ETFs for Q1 2021
HAIL, PRN, and FIW are the best industrial ETFs for Q1 2021
Investopedia
By NATHAN REIFF
Dec 16, 2020
https://www.investopedia.com/best-industrial-etfs-5092494?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral
The industrial sector is comprised of companies that produce supplies and equipment used in construction and manufacturing, as well as businesses providing related services. The sector is closely linked with the broader economy, and industrial stocks tend to drop dramatically during periods of economic turmoil. Still, there are a variety of industrial subsectors that may perform differently based in their specific characteristics. Some of the best-known companies in the sector include Honeywell International Inc. (HON), Lockheed Martin Corp. (LMT), and 3M Co. (MMM). The industrial sector also includes air transportation services companies. Investors looking to gain exposure to the industrial sector may consider exchange-traded funds (ETFs) which provide access to broader baskets of stocks while reducing the risks typically involved with investing in individual names.
KEY TAKEAWAYS
The industrial sector underperformed the broader market over the past year.
The industrial ETFs with the best 1-year trailing total return are HAIL, PRN, and FIW.
The top holdings of these ETFs are Nio Inc., Plug Power Inc., and Xylem Inc., respectively.
There are 38 industrial ETFs that trade in the U.S., excluding leveraged or inverse funds as well as those with under $50 million in assets under management (AUM).1? The industrial sector as represented by the benchmark Industrial Select Sector SPDR ETF (XLI) has underperformed the broader market in the past year. XLI has provided 1-year trailing total returns of 9.5% compared with 19.8% for the Russell 1000, as of December 14, 2020.2? The best performing industrial ETF, based on performance over the past year, is the SPDR S&P Smart Mobility ETF (HAIL). Below, we’ll look at the top 3 industrial ETFs as measured by 1-year trailing total returns. All figures in the tables below are as of December 15.
SPDR S&P Smart Mobility ETF (HAIL)
1-Year Trailing Total Returns: 75.2%
Expense Ratio: 0.45%
Annual Dividend Yield: 0.96%
3-Month Average Daily Volume: 45,862
Assets Under Management: $70.9 million
Inception Date: December 26, 2017
Issuing Company: State Street SPDR
HAIL is a multi-cap fund that targets the S&P Kensho Smart Transportation Index. The index comprises companies that are involved in the development of autonomous and electric vehicle technology as well as commercial drones and other advanced transportation systems.3? HAIL holds a portfolio of about 57 stocks, with just under 40% of invested assets concentrated in the 10 largest positions. The fund's top holdings include Sponsored ADR Class A shares of Nio Inc. (NIO), the China-based maker of electric vehicles; Plug Power Inc. (PLUG), the maker of hydrogen fuel cell systems; and Tesla Inc. (TSLA), the provider of electric vehicles and clean energy products.4?
Invesco DWA Industrials Momentum ETF (PRN)
1-Year Trailing Total Returns: 27.6%
Expense Ratio: 0.60%
Annual Dividend Yield: 0.16%
3-Month Average Daily Volume: 21,683
Assets Under Management: $131.8 million
Inception Date: October 12, 2006
Issuing Company: Invesco
PRN is a multi-cap growth fund that targets the Dynamic Industrials Sector Intellidex Index. The index utilizes a quant-based methodology to select a pool of industrial stocks. Because of this methodology, PRN has a higher expense ratio than some alternative funds focused on this space. The fund's top three holdings include Plug Power; TransDigm Group Inc. (TDG), the aerospace manufacturing company; and Class A shares of Bloom Energy Corp. (BE), the maker of solid oxide fuel cells.5?
First Trust ISE Water Index Fund (FIW)
1-Year Trailing Total Returns: 20.3%
Expense Ratio: 0.55%
Annual Dividend Yield: 0.48%
3-Month Average Daily Volume: 32,142
Assets Under Management: $645.7 million
Inception Date: May 11, 2007
Issuing Company: First Trust
FIW is a multi-cap blended fund that tracks the ISE Water Index, which is primarily focused on companies that derive a substantial portion of their revenue from the potable and wastewater industries. FIW holds a portfolio of about 38 stocks, with roughly 38.7% of invested assets concentrated in the top 10 holdings. The fund's top three holdings include Xylem Inc. (XYL), a maker of water and wastewater pumps, valves, heat exchangers, and treatment and testing equipment; IDEXX Laboratories, Inc. (IDXX), the maker of various products for the veterinary, livestock, water testing, and dairy markets; and Agilent Technologies, Inc. (A), the maker of analytical instruments and related products.
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>>> Luminar Technologies, Inc. (LAZR) operates as a vehicle sensor and software company for passenger vehicles and trucks. The company operates in two segments, Autonomy Solutions and Other Component Sales. The Autonomy Solutions segment designs, manufactures, and sells lidar sensors, and related perception and autonomy software solutions for original equipment manufacturers in the automobile, commercial vehicle, robo-taxi, and other related industries. The Other Component Sales segment engages in the designing, testing, and consulting of non-standard integrated circuits for government agencies and defense contractors. The company was founded in 2012 and is headquartered in Orlando, Florida.
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>>> Apple and Hyundai are reportedly planning to team up and build a 'beta' version of an electric car by 2022
Business Insider
1-10-21
https://www.msn.com/en-us/autos/news/apple-and-hyundai-are-reportedly-planning-to-team-up-and-build-a-beta-version-of-an-electric-car-by-2022/ar-BB1cCtrx?ocid=uxbndlbing
The companies are planning to sign a deal by March 2021 to partner on the cars, according to a Sunday report from local newspaper Korea IT News, which was cited by Reuters.
Hyundai and Apple may build a US factory that would eventually allow the companies to make about 400,000 vehicles each year.
Reuters cited a report from Korea IT News that said the companies are planning to sign a deal by March 2021 to partner on the self-driving electric cars, according to a Sunday report from Korea IT News.
With a deal in place, the companies may have a beta version of the vehicle ready by next year, according to the report. Mass production of the self-driving electric vehicles could begin by 2024. The plan would be to build about 100,000 vehicles in the US that year, according to Reuters.
The deal would add a complicated layer to Hyundai Motor Corp.'s business, Morgan Stanley analyst Young Suk Shin wrote on Friday in a research note to clients. It could be positive for Hyundai to be involved when Apple, which is known for disrupting industries, enters the vehicle market, according to Morgan Stanley.
"However, we still see a concern that HMG could effectively be helping a significant competitor to grow," the analysts wrote.
The Hyundai-Apple cars may be built at the Georgia factory that builds Kia Motors vehicles, a Hyundai affiliate. But Hyundai and Apple may instead build a factory that would eventually allow the companies to make about 400,000 vehicles each year.
Rival electric carmaker Tesla earlier this month said it delivered almost 500,000 vehicles in 2020.
"So proud of the Tesla team for achieving this major milestone! At the start of Tesla, I thought we had (optimistically) a 10% chance of surviving at all," Elon Musk, Tesla CEO, said on Twitter at the time.
On Friday, Hyundai reportedly acknowledged it was talking to Apple about the self-driving project.
Apple's cars are expected to use a new type of battery designed by Apple, which would "radically" lower costs and extend how far they could drive between charges, according to a December report.
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>>> A Million-Mile Battery From China Could Power Your Electric Car
Bloomberg News
Bloomberg
June 7, 2020
https://www.bloomberg.com/news/articles/2020-06-07/a-million-mile-battery-from-china-could-power-your-electric-car
CATL ready to sell pack that lasts 16 years, chairman says
Milestone could bring EV ownership costs down, boost demand
The Chinese behemoth that makes electric-car batteries for Tesla Inc. and Volkswagen AG developed a power pack that lasts more than a million miles -- an industry landmark and a potential boon for automakers trying to sway drivers to their EV models.
Contemporary Amperex Technology Co. Ltd. is ready to produce a battery that lasts 16 years and 2 million kilometers (1.24 million miles), Chairman Zeng Yuqun said in an interview at company headquarters in Ningde, southeastern China. Warranties on batteries currently used in electric cars cover about 150,000 miles or eight years, according to BloombergNEF.
Extending that lifespan is viewed as a key advance because the pack could be reused in a second vehicle. That would lower the expense of owning an electric vehicle, a positive for an industry that’s seeking to recover sales momentum lost to the coronavirus outbreak and the slumping oil prices that made gas guzzlers more competitive.
“If someone places an order, we are ready to produce,” said Zeng, 52, without disclosing if contracts for the long-distance product have been signed. It would cost about 10% more than the batteries now inside EVs, said Zeng, whose company is the world’s largest maker of the batteries.
Concerns about batteries losing strength and having to be replaced after a few years is one factor holding back consumer adoption of EVs. Tesla last year flagged it expected to bring into production a battery capable of a million miles of operation, and General Motors Co. last month said it is nearing the milestone. That distance is equivalent to circling the planet 50 times.
Anticipating a rapid return to growth for the EV industry, CATL is plowing research-and-development dollars into advances in battery technology. While the coronavirus outbreak will drag down sales throughout this year, EV demand will pick up in early 2021, said Zeng, who founded CATL a decade ago.
Million-Mile Electric-Car Battery Is Ready, Chinese Giant CATCL Says
Car buyers holding back during the pandemic is creating pent-up demand that will be unleashed starting next year, led by premium models, he said. CATL’s customers include BMW AG and Toyota Motor Corp.
Zeng’s comments strengthen views that electric vehicles are set to weather the economic slowdown caused by the outbreak better than gas guzzlers. Battery-powered cars will swell to 8.1% of all sales next year in China, which accounts for the largest share of global EV sales, and to 5% in Europe, BNEF predicts.
“The pandemic may have a lasting effect throughout 2020, but won’t be a major factor next year,” Zeng said. “We have great confidence for the long run.”
Gassed
In a market broadsided by the pandemic, global sales of gas-powered cars and trucks may have already peaked.
CATL struck a two-year contract in February to supply batteries to Tesla, a major boon for the Chinese company as the U.S. electric-car leader has thus far mainly worked with Japan’s Panasonic Corp. and South Korea’s LG Chem Ltd. The deal followed months of negotiations, with Tesla Chief Executive Officer Elon Musk traveling to Shanghai to meet with Zeng.
The CATL batteries are set to go into Model 3 sedans produced at Tesla’s massive new factory near Shanghai, which started deliveries around the beginning of this year. Batteries are the costliest part of an EV, meaning suppliers of those components have a chance to reap a lion’s share of the industry’s profits.
Zeng said he often shares insights with Musk, with the two exchanging text messages about developments in technology and business. CATL is strengthening its relationship with Tesla, with matters such as cobalt-free batteries on their agenda, Zeng said.
“We’re getting along well and he’s a fun guy,” Zeng said of Musk. “He’s talking about cost all day long, and I’m making sure we have the solutions.”
Zeng said Musk also requested his help in obtaining ventilators for coronavirus patients. The U.S. billionaire delivered more than 1,000 of the breathing machines from China to officials in Los Angeles in March.
Shares of CATL have advanced about six-fold in Shenzhen since its initial public offering in 2018, giving the company a market value of about $47 billion. Tesla, by far the most valuable EV maker, has a market capitalization of about $160 billion (--> over $800 Bil)
A “trigger point” for electric cars will occur once they overtake gasoline-powered vehicles around 2030-2035, Zeng said. That view is more ambitious than that of researchers such as BNEF, which expects the shift to take place a few years later.
CATL, which is adding a production facility in Germany, is set to make more than 70% of batteries required by BMW, an early customer, Zeng said. CATL also works with Volkswagen’s Audi unit and is cooperating with Porsche, he said.
Zeng didn’t rule out building a plant in the U.S., though he said the company has no specific plans for now.
“Our team has made achievements in competing with our global rivals in overseas markets,” Zeng said.
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>>> The Hot Battery Startup That Could Zap Tesla
Wall Street Journal
By Stephen Wilmot
Jan. 1, 2021
https://www.wsj.com/articles/the-hot-battery-startup-that-could-zap-tesla-11609497031?mod=itp_wsj
Investors are enthusiastic about QuantumScape, developer of an electric-vehicle battery that promises more power for less cost. If the company succeeds, Tesla could face new challenges.
One of the wildest plotlines in the great 2020 electric-vehicle rally was the late-year rise of QuantumScape, QS -14.08% a battery startup that has yet to report any revenue. If investors are even close to being right about its roughly $44 billion market value, they may need to worry more about the fortunes of Tesla.
QuantumScape’s shares have soared since going public in November. The company revealed promising test results for a limited version of its “solid state” battery in early December, but otherwise the stock’s meteoric ascent has been hard to explain.
Based in San Jose, Calif., and backed by Volkswagen and Bill Gates, the company now has a market value greater than Ford. Investors have gotten used to dizzying valuations for electric-vehicle startups positioning themselves as the next Tesla. With QuantumScape, the mania has reached potential suppliers too.
Solid-state batteries have long been seen as a way of breaking through performance limitations associated with today’s electric vehicles. Like your smartphone, a Tesla or BMW i3 is powered by a battery with a liquid electrolyte that carries lithium ions back and forth between the cathode and anode during charging and discharging. These liquid electrolytes are bulky and liable to overheat. General Motors recalled almost 69,000 Chevrolet Bolt electric vehicles in November after five reported fires.
The promise of solid state is to get rid of the liquid, and with it the fire risk. Moreover, “lithium-metal” cells being developed by QuantumScape, among others, combine the lithium component with the anode, further reducing bulk and potentially delivering more power at a lower cost. This is also critical: Electric vehicles have long been held back by the relatively high cost of batteries, which makes them more expensive than combustion-engine equivalents.
Other advantages of solid state include rapid charging and longer life expectancy. QuantumScape said in December that its cell as tested could be recharged to 80% in 15 minutes and retained more than 80% of its capacity even after 800 charges. Such numbers would make owning an electric vehicle much more similar to owning a gas-powered one today.
Many in the battery industry see solid state as the most likely technology of the future. Tesla Chief Executive Elon Musk is a prominent exception. Solid state wasn’t among the many developments discussed in the company’s September “battery day.” Mr. Musk told analysts on the third-quarter results call that removing the conventional anode “is not as great as it may sound” in terms of delivering space savings in the cell.
Tesla’s skepticism may also be related to its own battery technology, which would likely make it harder than for others to adapt to solid state electrolytes. Tesla uses cylindrical batteries formed from rolled cells, whereas its competitors typically favor so-called prismatic batteries, in which cells can be stacked. Because solid-state cells are more brittle than liquid ones, they will be much easier to stack than to roll.
Adapting most of today’s electric-vehicle battery factories to the new technology won’t be too disruptive, says Graeme Purdy, chief executive of Ilika, a U.K.-based solid-state company that is working with Jaguar Land Rover to ensure a smooth transition. But it might be another story for Tesla. This could be the point where the company’s batteries, which have been a competitive advantage to date, turn into a competitive disadvantage.
Tesla does have time on its side, if it needs to change tack. Toyota probably has the most advanced solid-state batteries today: It planned to have them powering prototype vehicles at the 2020 Tokyo Olympics, which were postponed a year, and is targeting a mass-produced model by 2025. But the technology probably won’t be cost competitive with today’s batteries until the late 2020s at the very earliest.
QuantumScape’s investors are playing a very long game. The business plan doesn’t envisage meaningful revenues before 2026. There is also no guarantee that the company’s solution will win out over those of Toyota and others. The test results QuantumScape announced last month were for single-layer battery cells. Private U.S. startup Solid Power is already producing multi-layer solid-state batteries in a factory in Louisville, Colo. “The manufacturing challenges get exponentially harder as you move to multiple layers,” says Mark Newman, an analyst at brokerage Bernstein who focuses on the battery industry.
The valuations of companies like Tesla and QuantumScape require investors to look far into the future and assume mass disruption to the status quo. The wrinkle is that if QuantumScape’s plan works out—a big if—Tesla itself could be one of the companies most disrupted. In 2020, investors bought almost anything related to electric vehicles. This year they need to become more discerning.
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>>> Batteries Serve as 'Secret Sauce' for EVs: 4 Stocks in Focus
Yahoo Finance
by Rimmi Singhi
December 22, 2020
https://finance.yahoo.com/news/batteries-serve-secret-sauce-evs-140902027.html
Electric vehicles (EVs) are the future of transportation. For years, it seemed that Tesla TSLA was the only automaker that was playing at the forefront of the EV phenomenon and taking the concept of green vehicles seriously from a real-world functionality standpoint. However, things are changing as most of the automakers are now fast changing gears to electric. Climate concerns, stringent fuel-economy targets, and advancement in technology as well as charging infrastructure are boosting the environment-friendly EV market.
EV sales across the globe are projected to grow 50% or more in 2021 compared with ICE expected sales growth of a meager 2-5%, as predicted by analysts at Morgan Stanley, quoted in a MarketWatch article. Global EV penetration is projected to jump from 3% to 31% by 2030.
Widespread adoption of e-mobility will have a trickle-down effect in the supply chain, making battery stocks more attractive than ever. Batteries are the most common element of green cars and will play the most important role in accelerating the EV revolution. Battery specs are the cornerstone of an electric vehicle’s performance. Without the right battery technology, the EV industry wouldn’t be able to live up to its hype.
Global EV Battery Market Charged Up
The EV battery space is mostly dominated by Asia, with Contemporary Amperex Technology Co Ltd, LG Chem, BYD Co. Ltd BYDDY, Panasonic Corp. PCRFY and Samsung SDI spearheading the game. Riding on the enormous optimism in the battery space and EV frenzy, California-based EV battery maker QuantumScape QS recently made its NYSE debut. The Bill Gates-backed EV battery supplier is developing the next generation of batteries utilizing lithium metal, which has a significantly higher energy density than lithium ion. Set to disrupt the world of batteries, QuantumScape claims that its batteries are designed to offer up to 80% longer range than the existing lithium-ion batteries. Per the company, its batteries would charge up a vehicle to 80% of its full capacity in around 15 minutes.
Per ReportLinker data, the global market for EV battery is estimated at $30.7 billion in 2020 and expected to witness a CAGR of 16% over the next seven years to reach $87.2 billion. Currently, the most popular source of power in green vehicles is lithium-ion batteries. Notably, the lithium ion battery segment is likely to record a CAGR of 17.7% over the next seven years, with China, the United States of America, Europe, Japan and Canada driving global demand. Amid the upbeat scenario, investors should put battery-related stocks onto their radar.
4 ‘Pick & Shovel’ Stocks to Play the EV Boom
Panasonic Corp.: Panasonic is one of the key players in the development of next-generation lithium-ion batteries for green vehicles. Continuous research and cutting edge technology have kept the company at the forefront of battery development. Its advanced lithium-ion battery tech offers improved energy density, lower costs and improved driving range. Partnerships with auto biggies like Tesla and Toyota TM are likely to boost the firm’s prospects. Notably, the company is targeting zero cobalt in its battery cells and plans to commercialize cobalt-free batteries in a few years. Panasonic currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its fiscal 2022 earnings indicates a year-over-year increase of 82.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
EnerSys ENS: Headquartered in Pennsylvania, EnerSys engages in manufacturing, marketing and distribution of various industrial batteries. Battery brands of the firm include EnergyCell, NexSys and PowerSafe. Solid product portfolio, new product offerings, acquired assets and shareholder-friendly policies are key strengths of EnerSys. Amid the changing dynamics of the industrial battery landscape, the company remains focused on the development of Thin Plate Pure Lead and advanced Lithium-ion technologies. It currently carries a Zacks Rank #3 (Hold) and has an expected EPS growth rate of 10% for the next three-five years.
Albemarle Corp. ALB: Considered as the world’s biggest lithium producer, this Charlotte-based company is expected to gain immensely from rising production of electric cars. Albemarle has battery-grade lithium-producing plants in Europe, Australia, China, Chile and the United States. This Zacks Rank #3 firm remains focused on strengthening the lithium business. Even amid the coronavirus crisis, Albemarle managed to surpass earnings and sales estimates in the last reported quarter. The company expects net sales for 2020 between $3.05 billion and $3.15 billion. Solid cost-cut initiatives and investor-friendly moves of the firm are encouraging. The company has an expected EPS growth rate of 11.9% for the next three-five years.
Vale S.A.VALE: Wondering why this Brazil-based giant miner is also on the list? Well, lithium-ion batteries mostly rely on nickel and Vale is the largest producer of the metal in the world. Most of the EV makers are aiming to eliminate the usage of cobalt in battery cells as the commodity is expensive and instead increase the nickel content. At the Battery Day event, Tesla revealed its intent to increase the nickel content in its battery composition, which would improve the range of vehicles and cut costs. So, the rising popularity of EVs is not just likely to buoy lithium demand but will also jack up nickel demand. Hence, Vale could very well be on your watchlist if you want to tap the EV boom. This Zacks Rank #3 company carries a VGM Score of A and has a long-term expected EPS growth of more than 25%.
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>>> Obvious reasons why a Tesla-crushing Apple car won't exist
Yahoo Finance
by Brian Sozzi
December 23, 2020
https://finance.yahoo.com/news/obvious-reasons-why-a-true-teslacrushing-apple-car-wont-exist-143346203.html
The Apple and Tesla blogs (and shares of electric vehicle related stocks, naturally) are going bananas this week on reports the iPhone maker will enter the electric vehicle space.
But some Wall Street analysts are casting doubt on the arrival of the “iCar,” for more reasons other than it would badly screw up their finely tuned discounted free cash flow models.
“We would assign the chances of Apple unveiling its own standalone car by 2024 as 35%-40%,” says Wedbush tech analyst Dan Ives.
Apple (AAPL) could start production on its own electric vehicle as early as 2024, according to a report out of Reuters this week. The car will be powered by a “breakthrough” monocell battery design that offers up greater range than traditional electric vehicle batteries. Apple, which did not respond to Yahoo Finance’s request for comment, is also reportedly exploring the use of a lithium iron phosphate battery, which would not include hard to mine metal cobalt.
Analysts like Ives contend making an electric car is an operational headache that Apple CEO Tim Cook probably won’t want to take on directly.
“There are the Herculean-like auto production capabilities, battery technology ramp, financial model implications, and regulatory hurdles involved in such a game changing initiative,” Ives explains. “In addition, on the autonomous front and given safety/regulatory issues we would see a longer timeframe if Apple ultimately heads down this path especially given the cautious DNA of Cook & Co. in launching new products.”
Apple has bought a struggling self-driving car startup as the iPhone maker continues to explore the potential market for robotic vehicles, despite recently curtailing its work on the technology. The Cupertino, Calif., company confirmed its acquisition of Drive.ai Wednesday, June 26, without disclosing the price.
Instead, Ives believes Apple will go the partnership route to enter the surging electric vehicle space. It would likely lead with the Lidar (Light Detection and Ranging) technology it has reportedly been developing since 2014. Doing so would reduce capital outlays and regulatory hurdles, among other elements to the complicated story that is making a car in the modern day.
“We believe based on our investor conversations over the last few days that many on the Street would rather see Apple partner on the EV path, than start building its own vehicles/factories given the margin and financial model implications down the road, coupled with the strategic product risk around such a gargantuan endeavor. This speaks to our view that the chances of a strategic partnerships with the likes of a Tesla, VW, or other auto manufacturers in China (e.g., Nio, Xpeng) are in the 70%+ range over the next few years and could lay the groundwork for a dual path (start building its own line of EV autos post 2025) over the next decade if this EV/autonomous venture is successful with consumers,” adds Ives
Speculation on Apple’s potential EV entry has put a spotlight on shares of many suppliers in the space. Battery startup shares of QuantumScape (QS) spiked 29% on Monday and rose nearly 40% on Tuesday. A source tells Yahoo Finance QuantumScape is currently not in talks with Apple.
Meanwhile, shares of Lidar sensor maker Luminar (LAZR) are up a cool 31% this week. The company debuted on the Nasdaq Composite earlier this month.
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>>> Canoo Holdings Ltd. (GOEV) designs and manufactures electric vehicles in California. The company offers cars and commercial delivery business-to-business (B2B) vehicles along with skateboard architecture that allows to maximum utilization of vehicles. Canoo Holdings Ltd. was formerly known as EVelozcity Holdings Ltd. The company founded in 2017 and is based in Torrance, California.
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>>> Velodyne Lidar, Inc. (VLDR) develops and produces lidar sensors for use in industrial, 3D mapping, drones, and auto applications in North America, the Asia Pacific, Europe, the Middle East, and Africa. The company offers surround-view hybrid solid state, directional solid state, and dome lidars; and Vella, an advanced driver assistance systems (ADAS) software solution built around lidar. Its products are used in various applications, including autonomous vehicles, ADAS, UAVs, mapping, industrial automation, self-driving rovers, autonomous vessels, smart city initiatives, and robotics. Velodyne Lidar, Inc. was founded in 2018 and is headquartered in San Jose, California.
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>>> Luminar Technologies, Inc. (LAZR) operates as a vehicle sensor and software company for passenger vehicles and trucks. The company operates in two segments, Autonomy Solutions and Other Component Sales. The Autonomy Solutions segment designs, manufactures, and sells lidar sensors, and related perception and autonomy software solutions for original equipment manufacturers in the automobile, commercial vehicle, robo-taxi, and other related industries. The Other Component Sales segment engages in the designing, testing, and consulting of non-standard integrated circuits for government agencies and defense contractors. The company was founded in 2012 and is headquartered in Orlando, Florida.
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>>> Why Apple entering the EV market is 'a good thing'
Yahoo Finance
by Alexis Christoforous
December 23, 2020
https://finance.yahoo.com/news/why-apple-entering-the-ev-market-is-a-good-thing-113808559.html
It was a bumpy stock market debut for electric vehicle maker Canoo (GOEV). The Los Angeles-based startup went public on the Nasdaq Dec. 22 via a reverse merger with the special purpose acquisition company, or SPAC, Hennessy Capital. Shares initially surged but turned lower to close Tuesday down 3.1% at 18.89 a share.
Canoo’s Wall Street debut coincided with a report from Reuters that said Apple (AAPL) plans to produce a passenger electric vehicle with a “breakthrough battery” by 2024. The news gave a jolt to two companies that make lidar (Light Detection and Ranging) sensors, a core component for self-driving cars that allows their computers to take a 3D image of the world around them. Shares of Luminar (LAZR) rallied 6.3% while Velodyne (VLDR) climbed more than 10.9%. Electric car battery startup QuantumScape (QS) also got a boost.
Canoo’s Executive Chairman Tony Aquila tells Yahoo Finance Live that the Apple electric car news had a ripple effect through the EV space.
“I think with the news of Apple, you know, it created a lot more volume in the stocks around lidar and then the EV guys as they're coming to light. But, I actually think it's a very good thing that Apple is kind of alluding to their involvement. Obviously it's a very different vehicle than what we're focused on,” Aquila says.
Canoo plans to use capital raised through the merger to begin limited production of its first electric vehicles in 2022. Last week it took the wraps off of a “multipurpose” electric delivery van that’s expected to cost about $33,000.
Canoo's fully electric delivery van starts at $33,000. It will go head to head with similar EV vans from Ford, Mercedes and Rivian.
Canoo also plans to rollout a seven-passenger electric car that will be offered through a subscription service. Instead of buying or leasing, customers will pay a monthly fee that bundles maintenance, charging and insurance.
The company has joined with Hyundai (HYMTF) to co-develop technology, but it’s yet to lock-in a deal with a contract manufacturer to build its first vehicles.
“We’re talking to everybody,” says Aquila. “There's certain parts of the IP line we'll want to make sure we're very focused on controlling, similar to the Apples of the world. And then, of course, working in a smart and efficient way with outside manufacturing for the assembly of vehicles.”
Canoo projects 2024 revenue of $1.43 billion and its first profit at $188 million.
“The demand is so high, and it's only going to grow. When you think about three to four car generations from now, we're going to be 80% electric and 20% fossil fuel,” says Aquila. “I think where Apple will contribute a lot to everybody in the industry is in the battery sector.”
Apple’s planned electric car will reportedly feature a “monocell” battery design that could significantly lower battery costs and improve vehicle range.
Aquila also thinks Apple could benefit the EV market with its software technology. “I think it'll be helpful. It's all hands on deck when you think of the demand and the rotation of the fleet. And so there's lots of room, and I think Apple coming in is a good thing.”
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>>> Nuro Gets First California OK to Charge Money for Self-Driving Services
By Reuters
Dec. 23, 2020
U.S. News & World Report
https://www.usnews.com/news/technology/articles/2020-12-23/nuro-gets-first-ever-permit-for-commercial-use-of-autonomous-vehicles-in-california
(REUTERS) - ROBOTICS company Nuro on Wednesday received the first-ever permit to commercially deploy its self-driving vehicles in California, allowing the Silicon Valley firm to charge clients for its driverless delivery service.
Relying on a remote human operator - who could control multiple autonomous vehicles from miles away - is a step that allows a path to profitability in the emerging field of self-driving technology.
Nuro has been testing autonomous vehicles on California's roads with safety drivers since 2017, and it was authorized by the state regulators to test two driverless delivery vehicles in nine cities earlier this year.
The company said it would launch a delivery service with a fleet of autonomous Toyota Priuses, and later add its own low-speed R2 vehicle, which has no pedals or steering wheel and only room for packages.
Last month, Nuro raised $500 million in a funding round, driven by a massive boost to e-commerce from the COVID-19 pandemic.
Nuro, a privately held firm based in Mountain View, California, was permitted by the National Highway Traffic Safety Administration in February to deploy up to 5,000 low-speed electric delivery vehicles in Houston without human controls such as mirrors and steering wheels.
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>>> 20 electric vehicle stocks besides Tesla and Nio that analysts expect to rise the most over the next year
MarketWatch
Dec. 2, 2020
By Philip van Doorn
https://www.marketwatch.com/story/20-electric-vehicle-stocks-outside-of-tesla-and-nio-expected-by-analysts-to-rise-the-most-over-the-next-year-11606926496?siteid=yhoof2
Analysts favor companies that supply EV manufacturers or develop technology to support infrastructure and autonomous driving.
General Motors will begin selling its new all-electric Hummer in late 2021. (General Motors)
The electric vehicle revolution is real.
A few years ago, did you believe it was possible for Tesla Inc. TSLA, +5.32% to make and sell half a million cars a year? Well, the company made 145,036 electric vehicles during the third quarter and delivered 139,593.
But you may not want to jump on a stock that has risen so much this year. There are many other ways to play the EV trend and related development of autonomous driving technology. A screen of companies in a broad array of industries connected to EVs is below.
There’s no question that EVs will continue to storm the auto market. General Motors Co. GM, +1.47% plans to have 30 fully electric models available by 2025, with 40% of its vehicles available in the U.S. being EVs by the end of that year.
President-elect Joe Biden has said that he favors the continued tightening of fuel economy standards for internal combustion (ICE) vehicles. Ever-increasing pressure on ICE vehicle manufacturers from governments around the world, as well as tax incentives for EVs, mean the writing is on the wall, even if the transition in the U.S. is a long one.
Meanwhile, it seems there are new competitors jumping into the EV space every day.
Expensive and cheap
A problem for new investors in the sector is runaway share prices for some of the best-known and rapidly growing companies.
Shares of Tesla are up 600% this year. This means the stock has gotten way ahead of analysts’ estimates and price targets. Among 36 sell-side analysts polled by FactSet, only 13 rate the shares “buy” or the equivalent. The consensus price target of $396.40 is 32% below the stock’s closing price of $584.76 on Dec. 1. The shares trade for 162 times the consensus earnings estimate for the next 12 months. Of course, the analysts’ 12-month horizons for price targets may be considered too short by long-term investors.
Nio Inc.’s NIO, +2.98% American depositary receipts closed at $45.36 on Dec. 1, up more than 10-fold this year, but down 15% from a week earlier. Among 13 analysts covering Nio, nine rate the shares a buy, but the consensus price target is lower: $42.25. There is no price-to-earnings ratio available for Nio, as the company is expected to continue operating at a loss.
Getting back to GM, the shares were up 22% year-to-date through Dec. 2, but were trading for only 6.7 times the consensus earnings estimate for the next 12 months. That is a very low P/E ratio for a company with strong cash flow making such a deep commitment to a rapidly growing high-tech industry. (In comparison, the forward P/E ratio for the S&P 500 SPX, +0.58% is 22.3, according to FactSet.) Among the 17 analysts polled by FactSet who cover GM, 14 rate the shares a buy or the equivalent, and the consensus price target implies 10% upside over the next 12 months.
Three ETFs and a stock screen
As we discussed with five professional investors in September, it is a good idea to look beyond the vehicle manufacturers themselves when seeking investments that will rise as the world switches to EVs.
To come up with a broad list of related stocks, we looked at the holdings of three ETFs:
SPDR S&P Kensho Smart Mobility ETF HAIL, +1.22% — 56 stocks, largest holding: Nio (12.6%).
Global X Autonomous & Electric Vehicles ETF DRIV, +0.73% — 75 stocks, largest holding: Tesla (4%).
iShares Self-driving EV & Tech ETF IDRV, +0.81% — 100 stocks, largest holding: Tesla (9.3%).
Adding the three portfolio groups together and removing duplicates left a list of 165 stocks, including 74 listed in the U.S.
Here are the 20 stocks covered by at least 10 analysts, with at least two-thirds at “buy” or equivalent ratings, with the most implied upside potential for the next 12 months, based on consensus price targets.
COMPANY TICKER COUNTRY INDUSTRY SHARE 'BUY' RATINGS CLOSING PRICE - DEC. 2 CONSENSUS PRICE TARGET IMPLIED 12-MONTH UPSIDE POTENTIAL FORWARD P/E TOTAL RETURN - 2020 THROUGH DEC. 2
HONDA MOTOR CO. LTD. JP:7267 JAPAN MOTOR VEHICLES 100% 2,899.50 3,678.13 27% 10.3 -4%
Iljin Materials Co. Ltd. KR:020150 South Korea
Electronic Production Equipment 100% 46,800.00 59,000.00 26% 29.4 9%
Hyundai Mobis Co., Ltd KR:012330 South Korea Industrial Machinery 96% 242,500.00 302,500.00 25% 8.1 -5%
Hyundai Motor Co. KR:005380 South Korea Motor Vehicles 96% 183,500.00 228,884.61 25% 8.4 52%
Honda Motor Co. Ltd. ADR HMC Japan Motor Vehicles 100% 28.36 34.63 22% 10.0 2%
Ballard Power Systems Inc. CA:BLDP Canada Electrical Products 82% 25.83 31.33 21% N/A 178%
Baidu, Inc. ADR Class A BIDU China Internet Software/Services 75% 140.26 169.20 21% 15.3 11%
KIA Motors Corp. KR:000270 South Korea Motor Vehicles 100% 59,800.00 71,115.38 19% 7.3 35%
Samsung Electronics Co. Ltd. KR:005930 South Korea Telecommunications Equipment 91% 67,800.00 79,076.19 17% 14.4 24%
Volkswagen AG Pref. DE:VOW3 Germany Motor Vehicles 74% 147.36 169.81 15% 6.0 -13%
LG Chem Ltd. KR:051910 South Korea Chemicals: Specialty 97% 809,000.00 930,862.06 15% 26.8 155%
Samsung Electro-Mechanics Co. Ltd. KR:009150 South Korea Electronic Components 100% 162,000.00 184,035.72 14% 16.5 30%
Microsoft Corp. MSFT U.S. Packaged Software 91% 216.21 243.92 13% 32.0 39%
Siemens AG DE:SIE Germany Industrial Conglomerates 69% 112.94 125.38 11% 20.4 11%
Micron Technology, Inc. MU U.S. Semiconductors 80% 67.08 74.23 11% 18.6 25%
General Motors Co. GM U.S. Motor Vehicles 82% 44.68 49.27 10% 6.6 24%
NVIDIA Corp. NVDA U.S. Semiconductors 77% 535.60 590.26 10% 47.9 128%
Analog Devices, Inc. ADI U.S. Semiconductors 83% 140.73 154.85 10% 24.9 20%
Magna International Inc. CA:MG Canada Auto Parts: OEM 67% 80.37 87.22 9% 9.2 17%
Alphabet Inc. Class A GOOGL U.S. Internet Software/Services 88% 1,795.36 1,929.15 7% 30.3 34%
FactSet
The table includes a lot of data, including forward P/E ratios, which you can see if you scroll to the right. Share prices and targets are in local currencies.
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>>> ETFs for the Driverless Car Revolution
Investopedia
By J.B. MAVERICK
Nov 29, 2020
https://www.investopedia.com/articles/etfs-mutual-funds/050216/3-etfs-take-advantage-driverless-car-revolution-carz-arkq.asp?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral
Investors seeking exposure to the driverless car revolution now have the option of buying into exchange-traded funds (ETFs) specifically dedicated to driverless cars, electric vehicles, and other innovations in the automobile industry.
Among this class of ETFs are KraneShares Electric Vehicles and Future Mobility ETF (KARS), which debuted in January of 2018; InnovationShares NextGen Vehicle and Technology ETF (EKAR); which debuted in February 2018, and Global X Autonomous & Electric Vehicles ETF (DRIV), which debuted in April 2018. Prior to the introduction of these specific ETFs, there were no ETFs directly related to self-driving cars and electric vehicles, and only one ETF was focused on the automobile industry.
KEY TAKEAWAYS
Investors seeking exposure to the driverless car revolution now have the option of buying into exchange-traded funds (ETFs) specifically dedicated to driverless cars, electric vehicles, and other innovations in the automobile industry.
KraneShares Electric Vehicles and Future Mobility ETF, InnovationShares NextGen Vehicle and Technology ETF, and Global X Autonomous & Electric Vehicles ETF are ETFs that are invested in driverless cars, electric vehicles, and other innovations in the automobile industry.
People looking to invest in driverless cars also have the option of adding ETFs to their portfolio that are focused on the automobile industry and related technological innovations, including First Trust's Global Auto Index Fund or Industrial Innovation ETF by ARK Invest.
The KraneShares Electric Vehicles and Future Mobility ETF had $57.74 million in net assets as of November 27, 2020.1? The fund tracks the performance of Solactive Electric Vehicles and Future Mobility Index, which includes global companies involved with new transportation methods. These companies focus on electric vehicles or their components, technologies related to autonomous driving, shared mobility, lithium and copper production, hydrogen fuel cell manufacturing, and other innovations in the sector.
Ideanomics NextGen Vehicle and Technology ETF
The Ideanomics NextGen Vehicle and Technology ETF is made up of global stocks related to electric autonomous, or self-driving, vehicles. The fund invests in companies that fall into four categories within the sector: battery producers, original equipment manufacturers, suppliers, and producers of semiconductors and software. The ETF had $4.22 million in net assets as of November 2020.2?
Global X Autonomous & Electric Vehicles ETF
The Global X Autonomous & Electric Vehicles ETF seeks to correspond to the Solactive Autonomous and Electric Vehicles Index. The fund invests in companies that are involved in the development and manufacturing of software and hardware for driverless vehicles, and companies that produce electric vehicles and their components, such as lithium and cobalt. As of November 2020, the fund had $124.9 million in net assets.3?
Related Exchange Traded Funds Options
People looking to invest in driverless cars also have the option of adding ETFs to their portfolio that are focused on the automobile industry and related technological innovations.
First Trust's Global Auto Index Fund (CARZ) was launched in 2011, and until 2018, it was the only ETF related to the automobile industry. As of July 2020, the fund had $44.35 million in net assets.4? The ETF tracks the NASDAQ OMX Global Auto Index, which includes nearly all of the major automobile manufacturers worldwide. Holdings include Honda Motor Company (HMC), General Motors (GM), Toyota Motor Corporation (TM), and Tesla Inc. (TSLA).
Another more broad investment option related to driverless cars is the Industrial Innovation ETF by ARK Invest (ARKQ), which launched in 2014 and had reached $633 million in net assets as of November 2020.5? This is an actively managed fund that invests in companies identified as being likely to benefit from technological advancements—including those related to electric and autonomous vehicles. Software and IT services companies, semiconductor firms, and automobile companies combine to account for about 80% of the portfolio assets.
ETF investors may also wish to consider a fund like the First Trust Clean Edge Green Energy Index Fund (QCLN). Launched by First Trust in 2007, the ETF focuses on companies involved in providing clean alternative energy. While there's no direct connection to driverless cars, there is some significant overlap between companies involved in developing driverless cars and those involved in clean energy. This fund, which tracks the NASDAQ Clean Edge Green Energy Index composed of U.S.-listed firms engaged in developing clean energy, had $1.5 billion in net assets as of November 2020.6? Semiconductor firms, which are likely to be essential in creating driverless car technology, account for about a third of the portfolio holdings.
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>>> QuantumScape (QS) Is ‘Hitting a Home Run’ in Battery Technology. Its Stock Soars.
Barron's
Dec. 8, 2020
By Al Root
https://www.marketwatch.com/articles/quantumscape-hitting-home-run-in-battery-technology-stock-soars-51607463327?mod=mw_more_headlines
QuantumScape is aiming to build a solid-state EV battery that is better than the lithium-ion ones used today.
Experts called data from solid-state battery start-up QuantumScape a home run. That vote of confidence is helping shares add to recent gains.
QuantumScape (ticker: QS) conducted a virtual battery showcase on Tuesday, giving investors and analysts a chance to examine the technology Quantum has developed and learn which solid-state battery technologies haven’t worked so far.
QuantumScape didn’t call out competition by name but management did point out that other attempts involving different types of cell separators, including polymers and sulfides, haven’t panned out.
The company’s flexible ceramic separator might be the biggest breakthrough Quantum extolled on Tuesday, without giving away its trade secrets.
That separator allows Quantum’s batteries to withstand the automotive electric-current loads and conditions—at what can be considered normal operating temperatures and pressures—without failing. There are a lot of complicated technical details behind that claim.
The technical nature of the discussion might be why the company assembled a seven-member panel of battery experts to listen to and comment on the data. The “aha” moment appeared to be statements about plating 15 microns of lithium in 15 minutes at a current density of 16 milliamperes per centimeter squared.
There is a lot to unpack there. Amps are the basic unit of electrical current, or the flow of electricity. At higher currents, batteries can fail. In fact, when investors have the chance to review other data from battery competitors, they can ask what current densities have been achieved without failure. Something below 16 milliamperes per centimeter squared isn’t going to cut it for automotive applications.
On the panel were Jugen Leohold, professor and former head of Volkswagen Research, Tesla (TSLA) co-founder J.B. Straubel, and Stan Whittingham, who won the Nobel Prize in chemistry for his work on lithium-ion batteries. There were others representing Stanford University, Carnegie Mellon University and the University of Maryland.
They all appeared impressed with the rapid charging and battery longevity cited by Quantum. It said its batteries can reach 80% of full charge in 15 minutes. The company also said it has reached 800 cycles without battery degradation.
Quantum showed that 800 charge cycles should correspond to about 240,000 miles of driving.
“It’s been almost half a century since we built the first lithium batteries at Exxon [XOM],” Whittingham said. “I’m very encouraged by what I heard in the last few days…this will be a breakthrough for electric vehicles as well as other storage.”
Quantum is “hitting a home run,” said Paul Albertus of the University of Maryland. “They ultimately need to achieve something like a grand slam to bring this technology to market.”
All the data presented were based on Quantum’s single-layer pouch cells. They look like playing cards. The next step is to build and test a deck of cards. The deck will be the basic unit of battery power in an EV and many decks will provide a vehicle with its designed power and range. Going from the playing cards to the stacks of card decks would be the “grand slam.”
Volkswagen (VOW.Germany) is helping Quantum with manufacturing, as well as testing cells in its vehicles.
QuantumScape stock jumped 31% to $57.90. Shares are up almost 185% over the past three months, far better than comparable numbers for the S&P 500 and Dow Jones Industrial Average.
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>>> Workhorse Group Inc. (WKHS), a technology company, designs, manufactures, builds, and sells battery-electric vehicles and aircraft in the United States. The company also develops cloud-based and real-time telematics performance monitoring systems that enable fleet operators to optimize energy and route efficiency. Its products medium-duty trucks under the Workhorse brand; and HorseFly delivery drones systems. The company was formerly known as AMP Holding Inc. and changed its name to Workhorse Group Inc. in April 2015. Workhorse Group Inc. was founded in 2007 and is headquartered in Loveland, Ohio. <<<
>>> The Top Reasons Li Auto Could Accelerate to Higher Highs
Investor Place
by Ian Cooper
November 25, 2020
https://finance.yahoo.com/news/top-reasons-li-auto-could-192118352.html
The mere mention of electric vehicles is well, electrifying. The sector, and other related stocks like Li Auto (NASDAQ:LI) show no signs of slowing down.
Over the last few weeks alone:
Tesla (NASDAQ:TSLA) ran from a July low of $187.43 to $528
Nio (NYSE:NIO) ran from $6.80 to $56
Workhorse Group (NASDAQ:WKHS) ran from $4.14 to $28.87
Kandi Technologies (NASDAQ:KNDI) ran from $4.10 to $15
Nikola Corp. (NASDAQ:NKLA) just ran from $17.50 to a recent high of $29.41 in days
The Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV) just exploded from $15.85 to $21.64
Even better, Li Auto stock – which ran from $15 to $43 – could see $60 before the year is out, in my opinion.
Electric Vehicle Stocks Will Only Accelerate
Analysts say we’ll see 125 million EVs on the road by 2030. California is banning the sale of gas powered cars by 2035. European automakers need to sell more EVs with orders to cut CO2 emissions by 40% by 2030. In China, EV market share could grow 14% by 2022.
Plus, under a Biden administration, we could see more EVs on the road. As noted on his website, one of his goals is to accelerate the deployment of electric vehicles.
“There are now one million electric vehicles on the road in the United States. But a key barrier to further deployment of these greenhouse-gas reducing vehicles is the lack of charging stations and coordination across all levels of government. As President, Biden will work with our nation’s governors and mayors to support the deployment of more than 500,000 new public charging outlets by the end of 2030.”
In addition, according to analysts at Wedbush, 3% of all auto sales are currently electric. By 2025, the firm expects that number to be closer to 10%.
Li Auto Stock Earnings Are Explosive
Along with the EV boom, Li Auto stock earnings are impressive. While it did report a wider than expected net loss, revenue beat estimates thanks to rising deliveries. Net loss narrowed to RMB320.7 million, or $47.2 million, or RMB0.52 from a low of RMB345.2 million, or RMB2.71 in the second quarter. Analysts were looking for a loss of RMB0.38 per share.
Revenue was up nearly 29% quarter over quarter to RMB2.51 billion, or $369.8 million.
That came in above estimates for RMS2.42 billion. Gross margins improved nearly 20% from 13.3%. In addition, deliveries were up 31.1% quarter-over-quarter to 8,660 after 128% growth in the second quarter.
Mr. Xiang Li, founder, chairman and CEO said, “We delivered 8,660 Li ONEs in the third quarter, representing a 31.1% quarter-over-quarter increase and setting a new quarterly record. Cumulative deliveries in 2020 at the end of October reached 21,852 vehicles. For the fourth quarter of 2020, we expect our growth momentum to continue with deliveries reaching 11,000 to 12,000 vehicles.”
Analysts Love the Electric Vehicle Boom
Li Auto stock was just upgraded by Citigroup analyst Jeff Chung to a “buy” rating from a “hold” rating with a price target of $45 a share. In boosting his target, the analyst appears to be far more optimistic about the fourth quarter and new year new year for EVs, noted Barron’s contributor Al Root.
In addition, JP Morgan analyst Nick Lai says Chinese EV industry growth will only speed up next year. He expects EVs to account for up to 20% of all vehicles sold by 2025.
In short, with accelerating demand for electric vehicles, support from global governments and the Biden administration, related stocks like Li Auto have only just begun to take off. I strongly believe the Li Auto stock could test $60 before the year is over.
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>>> Electric Carmakers Are in a Stock Market Bubble
The Tesla-led automotive revolution is real but valuations have become divorced from the messy reality of the industry.
Bloomberg
By Chris Bryant
November 27, 2020
https://www.bloomberg.com/opinion/articles/2020-11-27/tesla-nikola-nio-and-fisker-there-s-a-bubble-in-electric-car-stocks?srnd=premium
The chief executive officer of Volkswagen AG, Herbert Diess, has predicted that within five to 10 years the world’s most valuable company will be a carmaker. Given how much investors have been bidding up the shares of Tesla Inc. and other electric vehicle stocks, it might happen sooner.
Tesla’s market value soared past $540 billion this week — equivalent to 250 times its expected earnings this year — meaning it’s now the world’s 10th-most valuable listed business, according to Bloomberg data. A trio of New York-listed Chinese electric-vehicle groups — Nio Inc., XPeng Inc. and Li Auto Inc. — are worth a combined $154 billion. None of the three is profitable and together they delivered fewer than 30,000 vehicles during the most recent quarter, just over 1% of Volkswagen’s car sales volumes.
EV Bubble
Electric vehicle stocks have soared this year. Is the hype justified?
Shows % chance since start date. Xpeng and Li Auto first sold shares in the U.S. in the summer and Nikola announced a SPAC merger in March.
Arrival Ltd., a U.K.-based electric-bus and van startup that’s poised to go public by merging with a special purpose acquisition company, is valued at almost $16 billion after the SPAC’s shares more than doubled in a week. It won’t start producing vehicles until late next year. 1
The electric revolution is real and the shift away from combustion engines is accelerating. From a climate perspective, it’s great that investors are allocating capital like this. Still, valuations look mighty bubbly. The potential for disappointment is massive, particularly for the newest crop of EV makers that are yet to generate meaningful revenue.
Like all financial bubbles, this one is driven by dreams of enormous wealth. Elon Musk has overtaken Bill Gates as the world’s second-richest person. Scottish investment manager Baillie Gifford & Co., an early Musk backer, recently cashed out billions of dollars in Tesla stock but retains a 3.7% holding worth about $20 billion. Baillie Gifford has more than one horse in the EV race: Its Nio stake is worth almost $6 billion. The Chinese company’s U.S-listed shares have surged 1,235% this year.
Nio’s recent history shows the perils of electric-vehicle stocks. It warned in March of substantial doubt in its ability to continue as a going concern, having burned through $4 billion of cash in three years. It survived thanks to a local government bailout. Tesla has been on the cusp of bankruptcy at least twice since 2003.
Those now joining the electric race claim to have learned lessons from these near-death struggles but there’s little to suggest their fates will be any less volatile.
Competition is intense and while electric motors are simpler to build than combustion engines, developing a vehicle that’s safe, reliable and exciting is incredibly difficult. Incumbent giants such as Volkswagen and General Motors Co. are much better capitalized and they’ve far more experience managing supply chains and building brands. After a slow start, they’ve gone “all-in” on EVs. They won’t be shoved aside easily.
Several factors have driven electric-vehicle stocks to these giddy heights. The U.S. Federal Reserve has stoked a speculative frenzy by cutting interest rates to zero, and bored millennials trading stocks at home on Robinhood have caught the EV bug. Electric-vehicle companies know how to market themselves to this crowd: Workhorse Group Inc. says its delivery vans can be paired with a drone, while XPeng emphasizes its autonomous-driving capabilities. ElectraMeccanica Vehicles Corp.’s “Solo” model has just three wheels.
Then there’s 2020’s hottest financial fad: SPACs. Many have merged with electric-vehicle groups, and one peculiarity of these deals is that the companies are allowed to publish detailed multi-year financial forecasts, unlike in a regular initial public offering. These projections are often extremely bullish. Like Arrival, Fisker Inc. — an asset-light electric-auto business whose shares have soared — is yet to commence commercial sales. Even Musk is worried about SPACs, though he hasn’t said which ones.
Revenue Ramp
Fisker and Arrival forecast sales will surge once they start production
These new companies claim to have a solution for the manufacturing difficulties and massive capital outlays that almost sank Tesla. Drawing a comparison with the way Apple Inc. outsources phone production to Foxconn Technology Group, Fisker plans to subcontract manufacturing of its Ocean SUV to Canadian auto-parts supplier Magna International Inc. Electric- and hydrogen-truck maker Nikola Corp. is pursuing a similar strategy with partners GM and CNH Industrial NV.
Others are taking a different approach. Electric-pickup startup Lordstown Motors Corp. acquired a factory from GM and has licensed technology from Workhorse to speed its market entry. Not to be outdone, Arrival claims to have reinvented the car assembly line. It plans to construct smaller, cheaper “microfactories” situated closer to where products are sold. Greater automation will reduce the need for human labor, it says.
However you produce vehicles, though, there’s plenty to trip you up. More than a third of Workhorse’s factory staff have had to down tools because of suspected coronavirus infections. Li Auto recalled all 10,000 electric SUVs produced before June, after it found a potential suspension problem. Workhorse and XPeng both warned recently of battery supply bottlenecks.
A big test for wannabe Teslas will come when they’ve burned though their cash and need to ask equity and debt investors for more, as Tesla and Nio have done repeatedly. ElectraMeccanica warned in its latest accounts that its “ability to continue as a going concern will depend on our continued ability to raise capital on acceptable terms.”
All of this may have short sellers licking their lips, but Tesla’s rise shows the danger of betting against the bubble. Nikola was the subject of a scathing report from Hindenburg Research that questioned its technology, and which forced the departure of its chairman. Yet its market capitalization now exceeds $11.5 billion.
Diess may be right about carmakers becoming the most valuable companies. It’s inevitable, however, that some won't make it.
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>>> 'If people can buy shoes and clothes online they'll definitely want to do it with cars:' Shift Co-CEO
Yahoo Finance
by Ines Ferré
November 13, 2020
https://finance.yahoo.com/news/if-people-can-buy-shoes-and-clothes-online-they-definitely-want-to-do-it-with-cars-shift-co-ceo-212655267.html
Shift Technologies’ (SFT) co-CEO Toby Russell sees massive growth opportunities ahead for the peer-to-peer vehicle marketplace.
“This is an $840 billion market, and collectively, between Vroom (VRM), Caravana (CVNA) and Shift, we represent less than 1%” of vehicles bought online, Russell told Yahoo Finance Live.
“If people can buy shoes and clothes online they’ll definitely want to do it with cars,” he said.
“The problem is they haven’t been able to in the past because the old retail model doesn’t allow for that,” he added.
On Thursday the company reported its first quarterly results since going public via a SPAC this year. Revenue grew a record 31% year-over-year to nearly $60 million. Total units sold were up 34% and e-commerce sales grew 35%.
The stock however was down 26% on Friday. Wedbush Securities cut its rating on Shift by a double notch to Underperform from Outperform. Part of the rating cut had to do with the company’s marketing spend strategy.
“We are investing in growing our marketing in particular so that we can build brand, and have that long term shareholder value return,” said Russell.
“We did reduce our gross profit per unit guidance in Q4, in line with seeking to continue growing and investing in the long run,” he added.
Russell says the company’s inventory differentiates itself from the competition.
“We sell cars all the way down to less than $10,000 in cost, and all the way up into the 30s with an average selling price in sort of the $17,000 range. Whereas the others tend to sell more expensive cars,” said Russell.
Shift’s value segment has been outperforming. During the company’s earnings call on Thursday evening, executives highlighted through end of August, 29% of sales were in the value segment. That percentage came in higher than initially anticipated.
One analyst on the call questioned the company’s decision to hold a Black Friday campaign which would presumably impact GPU. The company’s leadership noted, “We want to drive growth and take that impact because of our strategic goal of expanding and driving continued growth both in Q4 and into next year.”
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>>> Carvana Co. (CVNA), together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. Its platform allows customers to research and identify a vehicle; inspect it using company's 360-degree vehicle imaging technology; obtain financing and warranty coverage; purchase the vehicle; and schedule delivery or pick-up from their desktop or mobile devices. The company was founded in 2012 and is headquartered in Tempe, Arizona.
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>>> Tesla competitor Nikola's stock craters after founder Trevor Milton resigns chairmanship
by Julia La Roche
Yahoo Finance
September 21, 2020
https://finance.yahoo.com/news/nikola-stock-price-drops-chairman-trevor-milton-resignation-112228730.html
Shares of electric truck start-up Nikola (NKLA) sank sharply on Monday, following the overnight resignation of executive chairman and founder Trevor R. Milton, who has been fending off accusations of fraud raised by a large investor betting against the company.
The stock, traded on the Nasdaq, tumbled by over 30% at Wall Street’s opening bell on Monday, but clawed back some of those losses in midday trading. Nikola is a competitor of industry leader Tesla (TSLA), which itself has been in the crosshairs of short-seller campaigns accusing CEO Elon Musk of mismanagement and impropriety.
Nikola has been under pressure for more than a week, after activist short-seller Hindenburg Research issued an extensive report on Sept. 10 claiming Nikola “is an intricate fraud built on dozens of lies” over the course of Milton’s career.
In that report, the short-seller raised 53 questions for the company. Hindenburg’s accusations have sent the company — once one of this year’s hottest stocks — reeling, and put Nikola under a regulatory microscope. For those reasons, Milton asked the company to allow him to step down, he wrote in a Twitter post early Monday.
“The focus should be on the Company and its world-changing mission, not me. I intend to defend myself against false allegations leveled against me by outside detractors,” he added.
For its part, Nikola has denied the accusations as “false and defamatory” — and blasted Hindenburg’s move as “financially motivated to manipulate the market and profit from a decline” in Nikola’s share price.
It’s unclear whether Hindenburg’s accusations are legitimate, but the market action appears to be playing right into the firm’s hands. Nikola is now trading at a fraction of its 52-week highs near $94 — the spike high hit in June after the company engineered a public offering via a successful reverse merger.
It bears mentioning that until very recently, Tesla was also a favorite target of bearish investors — who have been caught flatfooted by the stock’s skyrocketing price and reversal of fortunes — becoming the subject of Musk’s ridicule.
Last week, Bloomberg reported that the Securities and Exchanges Commission (SEC) is probing Hindenburg’s claims. Nikola said in its response that it contacted the SEC and “intends to fully cooperate” with its inquiry. The Justice Department is also making an inquiry, according to a Financial Times report.
Shortly after Nikola’s response, Hindenburg Research, which pointed out that the company answered 10 of its 53 questions, characterized the company’s rebuttal as “a tacit admission of securities fraud.”
In response to Milton’s resignation on Monday, Hindenburg Research tweeted: “We think this is just the beginning.”
A ‘highly dependent’ relationship
In an 8-K filing with the Securities and Exchange Commission explaining its founder’s reasons for stepping aside, the company noted that Milton will remain an “unpaid consultant” and “will be making himself reasonably available to provide consulting services” through the end of 2020.
Milton still holds 91.64 million shares, or a 24.18% stake in the company, according to Bloomberg data. Yet the filing noted that he agreed to relinquish 100% of the 4.859 million performance-based stock units granted on Aug. 2, and any right to enter into a two-year consulting agreement with an annual fee of $10 million.
In the company’s 10-Q report issued last month, Nikola said it’s “highly dependent” on the services of Milton — and its arrangement with the founder going forward reflects that relationship.
As part of the agreement, the company committed to paying for “reasonable costs of a security inspection” of Milton’s residence and said it will reimburse him for up to $100,000 for a full-time security detail for three months.
In the August filing, Nikola stated that if Milton “were to discontinue his service to us due to death, disability or any other reason, we would be significantly disadvantaged.”
Milton also agreed to “fully cooperate” with the company in investigating, defending, or prosecuting any claim. Nikola will also pay or reimburse Milton for all out-of-pocket expenses incurred during this process, the document shows.
As for social media, Milton agreed to “promptly revise” his employment status on social media platforms, including LinkedIn so that he is “no longer identified as holding any position” with Nikola or serving on its board. Before posting about the company or its employees, Milton agreed to consult with his attorney and Nikola’s chief legal officer.
Stephen Girsky, a former vice chairman of General Motors and Nikola board member, has been appointed Nikola’s chairman, effective immediately.
Nikola did not immediately respond to Yahoo Finance’s request for comment.
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>>> Nio Stock Won’t Defy Reality Forever
Investor Place
by Thomas Yeung
September 11, 2020
https://finance.yahoo.com/news/nio-stock-won-t-defy-110130820.html
Nio (NYSE:NIO) stock enchanted U.S. investors this year. As investors have scrambled to find “the next Tesla (NASDAQ:TSLA),” shares in Nio have skyrocketed 415%. But there’s one problem:
Nio isn’t Tesla.
Instead, Nio (known as Wèilái in China) faces far stiffer competition than Tesla ever did. With at least 14 other electric vehicle manufacturers in China, it will take far more than wishful thinking for Nio shareholders to win.
Nio Stock: Fighting for Chinese Market Share
Don’t get me wrong. I love the electric vehicle space.
It’s a business growing at 25% per year where winners will generate 1,000%-type returns for smart investors. And the Chinese automotive industry today looks much like America’s booming one of the 1950s when the number of U.S. registered cars doubled.
However, the booming U.S. auto industry also saw many losers. Between 1946 and 1960, the U.S. saw at least 27 major auto companies fold. The list includes famous names like AMC, to stranger ones like the Aurora, named by some auto historians as “the ugliest car ever.”
Today, Nio faces a similar landscape.
Carsalesbase, an industry tracker, counts no fewer than 91 Chinese car brands with more than 1,000 sales in 2019. As the No. 62 brand in China (that’s not a misprint), Nio is sandwiched by No. 61 Qorus and No. 63 Oushan Cos, brands barely known outside China.
Can Nio win? Very possibly. Car reviewers have given the company’s new ES6 SUV decent reviews. Nio also managed to grow sales by 12,000 units in 2019, representing a 158% increase.
But will Nio win? That depends on changing Chinese customer tastes, something far harder to predict.
The Chinese Auto Market: Ready for a Shakeout
History hasn’t been kind to auto manufacturers. Remember the golden era of U.S. auto manufacturing in the 1950s? By 2019, the number of U.S. brands had fallen to just eight. Including foreign ones, American consumers now buy only 34 different car brands.
Returns in the industry are also meager. No major car manufacturer has earned its cost of capital over the past decade.
Chinese auto manufacturers are facing the same fate. In 2019, 42 car brands saw sales declines of 20% or more in China. Even major players like Leopaard Motors and Huansu saw sales plummet 60% as customers shifted attention to other companies. (At its peak, Huansu sold almost 270,000 cars annually). That long list of 91 Chinese car brands will certainly dwindle over the next several years.
In other words, Chinese car buyers have a lot of choices and not all car brands will survive.
That’s the reason why, even in a great industry, I will only pick the companies with the highest chances of success.
What About Nio?
Nio stock fans like to think of Wèilái as “the next Tesla.”
It’s not.
Want proof? Let’s compare Nio in 2019 to Tesla in 2014. That’s the year TSLA sold 22,000 electric vehicles, roughly the same number that Nio did in 2019. But that’s where the similarities end.
Tesla saw colossal demand: Analysts at the time estimated the company had a nine-month backlog. Demand was so extreme that websites popped up so Tesla buyers could ask each other where they were in line. Nio, however, struggled to fill its order books during the coronavirus pandemic, something Tesla hasn’t had trouble with.
Gross margin: TSLA generated a 27% gross margin in 2014. Nio, on the other hand, recorded a -15% gross margin in 2019. The figure improved to 3% in the first half of 2020, but that means Nio can still barely get customers to pay what their SUVs cost to produce.
Competition: Nio counts at least 14 competitors in the electric SUV space, including SAIC, Audi, Mercedes Benz (OTCMKTS:DMLRY) and Li Auto (NASDAQ:LI). Nio also contends with BYD (OTCMKTS:BYDDF), the 800-pound gorilla of the Chinese EV world. Founded in 2003, the Warren Buffett-backed company has become the No. 15 largest car brand in China. In April alone, BYD sold 12,262 plug-in EVs.
Taken together, this suggests “Wèilái” fails to capture the Chinese consumer the same way that Tesla did in 2014.
Does Nio Have a Secret Sauce?
Nio doesn’t produce its own cars. Instead, the car company contracts with state-owned Jianghuai Automobile Group (JAC) for production. Terms, however, are particularly onerous. Not only must Nio pay per vehicle produced, but they also must compensate JAC for any operating losses that JAC itself generates.
Die-hard fans of Nio stock would twist this negative into a positive, calling the company a “lifestyle brand.” To them, it’s a benefit that the company doesn’t own its production facilities – why bother if you’re a pure-bred brand? Indeed, Nio also sells clothing, merchandise, and even “Nio Houses.”
And success as a lifestyle brand would certainly bring riches to investors. LVMH (OTCMKTS:LVMUY), the company that owns Louis Vuitton, Hennessey, and other high-end brands, is worth $241 billion. Nio reaching that valuation means a 10x gain for investors.
But investors should remember that these are tall mountains to climb.
Firstly, success in a crowded auto industry is already challenging; Tesla managed through Elon Musk’s herculean effort in fundraising and creating a distinctly desirable car. Nio, on the other hand, has had trouble wowing consumers. Underwhelmed users claim Nio’s ES8 SUV travels just 186 miles on a single charge (vs. Tesla’s Model X’s range of 320-350 miles)
Secondly, success as a lifestyle brand will prove even more taxing. Hundreds of formerly shining brands, from Umbro and Ecko Unlimited, are now housed in penny stocks.
Can Nio Succeed?
Certainly. Imagine a world where $52,000 “Wèilái” SUVs trundle down U.S. streets. One where American and European consumers eschew Teslas, BMWs, and Audis in favor of a better, faster, cheaper, more desirable Chinese import.
Can you imagine that?
Because that’s what it would take for Nio to become the next Tesla: worldwide popularity. (Tesla Model 3 is the second-most popular EV in China). The company is already worth as much as Ford Motor (NYSE:F), so it needs global growth to push its stock up another 10x.
But suppose you have trouble imagining Nio shifting 500,000 “Wèilái” units worldwide every year. In that case, you’re better off finding another EV company like Workhorse (NASDAQ:WKHS), Nikola (NASDAQ:NKLA), or Li Auto that might.
The Bottom Line
Whether Nio stock rises or falls 10% today or tomorrow is a technician’s game (and one that I know how to play). But if you’re looking for 10x-100x returns in the Chinese electric vehicle market, then pause a moment.
The next Tesla won’t just dominate the Chinese EV market. It will have to dominate the world.
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GM, NIO, Tesla, Ford - >>> 4 Stocks to Park in Your Portfolio to Benefit From EV Boom
by Rimmi Singhi
September 15, 2020
https://finance.yahoo.com/news/4-stocks-park-portfolio-benefit-122412113.html
The electric vehicle (EV) market is one of the hottest industries to invest in at the moment. Amid rising climate concerns, investors are intrigued by automakers that look for solutions to lower global carbon emissions for providing a cleaner energy future.
Per International Energy Agency, global EV sales in 2018 were 2.1 million units, marking a year-over-year rise of 64%. Around 2.2 million units of EVs were sold in 2019, surpassing 2018 record levels. IEA estimates electric cars to account for 3% of global vehicle sales in 2020, up from 2.6% in 2019. Per IEA, EVs on the road will increase to 36%, with about 245 million battery-powered cars by 2030.
Future Will be Green & Competition Rife
The EV industry’s future is expected to be bright on the back of various tailwinds. Stricter emissions and fuel-economy targets are expected to boost the environment-friendly EV market. Government subsidies and incentives are expected to spur EV sales. While China is the biggest and fastest growing EV market, developed nations including the United States, United Kingdom and Germany are actively encouraging the use of green vehicles to lower carbon emissions.
Reduction of battery costs, which is one of the key components of an EV, is likely to make green vehicles more affordable. Expansion of battery manufacturing capacity and reduction in costs are likely to buoy the EV industry’s prospects. Per a Bloomberg New Energy Finance report, the cost of batteries has fallen drastically to $156 kilowatt per hour (KW/hr) in 2019 from $1,100 KW/hr. It is expected that the cost will further fall to $100 by 2023, which will make the electric cars even more competitive in the long run.
Charging availability is often a sticking point for the widespread adoption of e-mobility. Thankfully, significant development is taking place on the EV charging front. Per IEA, the number of publicly accessible charging points for green vehicles soared a whopping 60% year over year in 2019. China is at the forefront when it comes to the rollout of publicly accessible chargers, especially fast chargers. The United States is at the third spot for most charging points, behind a combined category of "Other" countries. Notably, the United Kingdom’s EV charging points are twice the number of petrol stations. Widespread availability of charging facilities and deployment of proper charging infrastructure have been accelerating, which will make the EV ownership experience more convenient.
With most of the EVs boasting a range of more than 250 miles on a single charge and the charging infrastructure growing rapidly, range anxiety is gradually becoming a thing of the past.
Adapting to the changing dynamics of the industry, automakers have started taking the EV revolution seriously and are investing large sums of money in the development of green vehicles and e-mobility technologies. The number of EV model launches is rapidly increasing. All in all, growing concerns over environmental pollution, favorable government policies, increasing range and charging stations, reducing battery costs, ramp up of investments by automakers, along with a wide range of offerings make the EV market’s prospects rosy.
Lately, IPO filings by green vehicle makers — including Nikola, Li Auto, Hyliion and Fisker — have been on the rise to capitalize on the EV frenzy. With major automakers, pure EV plays, and small and mid-size startups actively focusing on the development of environment-friendly vehicles, the race to EV supremacy is only going to get fiercer in the upcoming years.
Below we highlight four automakers that should be on your radar considering their ambitious electrification plans and aggressive efforts to progress toward an electrified future.
Our Choices
General Motors GM: Of late, General Motors — which currently carries a Zacks Rank #1 (Strong Buy) — has been on a spree to revolutionize the EV space. The third-generation global EV platform powered by Ultium batteries will be the heartbeat of the U.S. auto giant’s electrified future. The Ultium modular battery platform will power the automaker’s new electric cars, starting with the Cadillac Lyric model. Notably, the Detroit-Hamtramck assembly plant will be the firm’s first plant fully devoted to the development of green vehicles and start building GMC Hummer EV in the fall of 2021. A couple of months back, General Motors and EVgo announced plans to triple the size of the nation’s largest DC fast charging network over the next five years. Recent partnerships with Honda HMC, Nikola NKLA and Uber display General Motors’ ability to aggressively compete with established EV players and showcase its commitment to an electric future. You can see the complete list of today’s Zacks #1 Rank stocks here.
NIO Inc. NIO: NIO seems to be well positioned to cement a strong long-term foothold in the rapidly growing EV industry. Rising demand for ES6 and ES8 models along with the upcoming EC6 model is expected to buoy prospects of this China-based EV firm. NIO’s battery swap technology is a game changer and provides an edge to the firm over peers. The technology — which is part of NIO’s BAAS (Battery-as-a-Service) strategy — helps to save time when charging an EV and alleviates range anxieties. The firm’s strong standing with the government of China offers massive advantage. Notably, NIO delivered 10,331 vehicles in the last reported quarter that exceeded the firm’s guidance and increased 191% from a year ago. This Zacks Rank #2 (Buy) firm’s upbeat guidance for third-quarter 2020 revenues and deliveries further boosts confidence.
Tesla TSLA: How can we miss Tesla when we are talking about electric vehicles! Although electric cars occupy a small portion of the global automobile market, Tesla has acquired a substantial market share within this niche segment. With Model 3 sedan being its flagship vehicle, Tesla has established itself as a leader in the EV segment.For full-year 2020, Tesla has maintained the target of exceeding 500,000 vehicle deliveries, indicating an uptick of 36% year over year, despite the recent production interruptions amid coronavirus woes. Tesla has a first-mover advantage in the EV space with high range vehicles, superior technology and software edge. Robust Model 3 demand, ramp up of Model Y production, significant Shanghai Gigafactory progress, amazing line-up of upcoming products and aggressive expansion efforts bode well for this Zacks Rank #3 (Hold) firm.
Ford F: Ford’s big push toward the development of electric vehicles is truly commendable. The U.S. auto biggie has vowed to become carbon free by 2050 and is making considerable strides toward achieving this target. Ford is committed to spend more than $11.5 billion in investment in EVs through 2022 by introducing zero-emission versions of some of the company’s popular vehicles, including the Mustang Mach-E — which will arrive in dealerships this year — and Transit Commercial EV and fully-electric F-150, which are expected to go on sale in 2022. Ford’s alliance with Volkswagen VWAGY is likely to accelerate the execution of its EV strategy. In collaboration with Electrify America, the firm’s FordPass Charging Network provides access to DC fast chargers. Over the next three years, Ford will introduce 1,000 charging points at its plants in Europe. This Zacks Rank #2 company expects electrified vehicles to account for more than 50% of its car sales in Europe by 2022.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Hyliion - >>> As Tesla surges 600% off its 2020 low, meet the next electric car newcomer going public
by Zack Guzman
September 2, 2020
https://finance.yahoo.com/news/as-tesla-surges-600-off-its-2020-low-meet-the-next-electric-newcomer-going-public-104542218.html
Electric vehicle companies are enjoying an incredible moment in 2020, spearheaded by Tesla (TSLA), which saw shares surge 600% from their March lows, and Chinese rival Nio (NIO), also enjoying a similar 700% pop.
Investors also battled over shares in electric truck maker Nikola (NKLA) earlier this year, which debuted via a special purpose acquisition company (or SPAC) in June as shares spiked about 110% in the week following its debut.
Now, yet another Tesla rival is looking to make its public debut — this time in the form of Austin, Texas-based electric trucking company Hyliion. The company announced in June it would be following Nikola’s lead by going public via a reverse merger with Tortoise Acquisition Corp. (SHLL) to trade on the New York Stock Exchange in a deal the company said would net $560 million in proceeds. But rather than start by only manufacturing electric trucks from the ground up, Hyliion is taking a different approach by offering to retrofit existing trucks with its electric drivetrain.
“What we're doing is actually focusing on the drivetrain of the vehicle as opposed to re-inventing the entire vehicle from the ground up,” Hyliion CEO Thomas Healy tells Yahoo Finance’s YFi PM. “The benefit of this is it's a lot quicker of a development.”
Hyliion plans to retrofit existing trucks with its electric and hybrid drivetrains to convert them into more efficient vehicles.
As the company approaches its debut that’s planned to take place by the end of the third quarter, shares in Tortoise Acquisition continue to rise — up more than 300% since the merger was announced, including a 25% spike following Healy’s Tuesday appearance on Yahoo Finance.
Aside from its electric “e-axle” drivetrain for existing semi-trucks, Hyliion is also planning to ramp up production of a second offering dubbed the Hypertruck ERX that uses an electric drivetrain and is capable of achieving a net carbon negative emissions footprint by using renewable natural gas. The company says the natural gas-powered onboard generator to recharge the battery allows for more than 1,000 miles of range and will allow truckers to fill up on much more available natural gas filling stations.
“On that vehicle we actually use an onboard natural gas generator that can kick on and charge the batteries up as you're driving so you don't have to plug it into the grid in order to recharge the battery,” Healy said.
The company previously announced a 1,000 pre-order for its Hypertrucks from Kuwait-based logistics company Agility. Deliveries of its Hypertruck are planned for 2021 before volume production in 2022. The company says it’s already shipping its hybrid e-axle system before ramping production next year.
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>>> The 5 Best Electric Car Stocks to Buy for the Next 10 Years
The EV megatrend has arrived in 2020, and it's not going anywhere anytime soon
By Luke Lango
InvestorPlace
Jul 31, 2020
https://investorplace.com/2020/07/5-best-electric-car-stocks-buy-next-10-years/
Electric car stocks are on fire.
Over the past year, the KraneShares Electric Vehicle and Future Mobility ETF (NYSEARCA:KARS) is up nearly 30%, versus a mere 5% gain for the S&P 500. This move comes on the back of optimism that rising consumer awareness, coupled with strengthening government support, will drive 36% growth in electric vehicle sales to record high levels in 2021.
While those numbers — a 30% gain for electric car stocks and a 36% rise in electric vehicle sales — may seem huge, this is just the beginning. The numbers will only get way bigger over the next 10 years.
The reality is that this is the beginning of the future of transportation. Diesel cars on their way out. Electric cars on their way in.
Over the next decade, this shift will only accelerate as battery tech improves driving ranges, battery charging infrastructure expands, consumer demand pivots, automobile production capacity makes a similar pivot, battery and electric vehicle prices come down, and public and private pressure to cut carbon emissions escalates. It’s a confluence of tailwinds that will spark a once-in-a-lifetime transportation revolution — and ultimately make electric vehicles ubiquitous by the end of the decade.
Today, electric vehicles only account for about 3% of all passenger cars.
Needless to say, the best of this growth narrative is yet to come … and the best of the rally in electric car stocks will happen over the next decade.
With that in mind, here are the five best electric car stocks to buy for the next 10 years:
Tesla (NASDAQ:TSLA)
Nio (NYSE:NIO)
Nikola Motors (NASDAQ:NKLA)
Arcimoto (NASDAQ:FUV)
Kandi Technologies (NASDAQ:KNDI)
Electric Car Stocks:
Tesla (TSLA)
The godfather of the electric vehicle industry, Tesla is and will remain one of the best electric car stocks to buy for the next 10 years.
In 2019, Tesla controlled about 16% of the global passenger electric vehicle market. That number is up from 8% in 2017, thanks to new cars and geographic expansion.
These two drivers will remain in place for the next several years. Tesla will launch the Model Y this year. Then the Cybertruck after that. Then more cars after that. At the same time, the company will continue to push deeper into Europe, establish a premium leadership position in China and eventually makes its way into Latin America.
Against the backdrop of all that growth, Tesla will continue to produce the best cars in the business, because the company has a huge lead when it comes to battery technology and autonomy. Concurrently, Tesla’s brand equity is second to none. That strong brand equity won’t be diluted anytime soon.
Tesla will remain the unparalleled leader of the consumer EV market for the next several years. As the market booms, so will Tesla’s revenues. And Tesla’s profits. And the TSLA stock price.
Nio (NIO)
Tesla’s little brother from China, Nio, is also one of the best electric car stocks to buy for the next 10 years.
The premium EV maker went in reverse in 2019. The Chinese auto market crumbled. Chinese EV sales plateaued. Demand for Nio’s vehicles plunged. The company’s losses widened. The balance drained cash.
But everything has changed in 2020.
China’s auto market is rebounding, with auto sales posting positive growth in April 2020 for the first time in 21 months. China’s EV sales are once again setting monthly record highs.
Nio’s vehicle deliveries doubled in both March and April, and are expected to rise more than 150% in the second quarter. The company’s adjusted net loss narrowed by more than 40% in the first quarter. And the balance sheet scored 7 billion yuan in financing from a group of strategic investors.
These favorable trends will persist for the next several years.
Population growth plus urbanization will drive auto market sales growth. Rising consumer awareness, falling prices, expanding charging infrastructure and increased government support will drive bigger EV sales growth.
New vehicle launches and increased production capacity will drive even bigger Nio sales growth. Economies of scale will kick in, and today’s losses will turn into tomorrow’s profits. NIO stock will fly higher.
All in all, investors should stick with NIO stock for the long haul. This is a potential multi-bagger in the making.
Nikola Motors (NKLA)
The newest electric car stock on Wall Street, Nikola Motors, made a splashy debut via a reverse merger in early June.
In a matter of days, NKLA stock soared from $30 to $90.
Why? Because this company has “Tesla of Trucks” written all over it.
In short, Nikola is a $23 billion next-generation vehicle maker. It’s leading the way in creating a new class of futuristic, zero-emission and cost-effective trucks. The company intends to first service the commercial market with electric and hydrogen delivery trucks, and then the consumer market with electric and hydrogen pick-up trucks.
If the company successfully executes against its opportunity to materially disrupt the trucking industry — and the company should be able to given its huge backing, technological advantages, strategic partnerships and hydrogen market leadership — then this could be a $100 billion company one day.
To that end, NKLA stock is one of the best electric car stocks to buy for the next 10 years.
Arcimoto (FUV)
One of the more exciting electric car stocks in the market is that of $72 million, Oregon-based EV maker Arcimoto.
Arcimoto is all about three-wheel EVs. The company understands that the future of cars is not three wheels. But its bet is that three-wheel EVs have enough specialty use cases across the globe, that demand for these smaller, nimbler and cheaper vehicles will be quite robust.
And that sounds like the right bet to make.
Specifically, Arcimoto’s consumer-oriented product, the Fun Utility Vehicle (FUV), looks positioned to become a next-generation ATV of sorts. It will be the urban vehicle of choice.
Then there’s Arcimoto’s commercial-oriented products, the Deliverator and the Rapid Responder. The Deliverator is a three-wheel, compact delivery EV aimed at optimizing last-mile delivery logistics by improving speed and cutting costs. The Rapid Responder is a three-wheel, compact emergency EV aimed at enabling law enforcement, security and emergency services to more quickly and affordably respond to incidents.
Deliveries of FUV started in late 2019. Production of commercial cars will start in late 2020.
Across these various consumer and commercial verticals, Arcimoto’s potential is quite enormous. Much, much bigger than its current $72 million market cap implies.
Kandi Technologies (KNDI)
Last, but not least, on this list of electric car stocks to buy for the next 10 years is Chinese EV maker and parts supplier Kandi Technologies.
Best known as the company which pioneered the EV battery swap model — which simply involves replacing an EV battery once it’s drained — Kandi was once considered a leader in China’s EV market. That was back in the early 2010s, when battery swapping was considered a necessity in a world full of EVs that took forever to charge and had limited driving ranges.
But, as EV technology has improved and charging times have dropped alongside rising driving ranges, many countries — including the U.S. — have entirely ditched the battery-swapping model.
China hasn’t. Instead, China is doubling down on its efforts to make the battery-swap model ubiquitous across the entire country through battery standardization.
Why? Because the battery-swap model is cheaper. Consumers don’t own their batteries. They rent the batteries. By removing the cost of battery ownership, the battery-swap model significantly lowers retail prices of EVs, which China hopes will promote mainstream adoption and help the country reach its ambitious sustainability targets.
In any event, all of that means that Kandi’s core technology is coming back into vogue in China. As it does over the next several years, Kandi’s growth narrative will reaccelerate and beaten-up KNDI stock — which has fallen from $20 to $3 in six years — will rebound with vigor.
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>>> Tesla Stock Is Worth $400B. Here’s Why.
Barron's
By Al Root
Aug. 27, 2020
https://www.barrons.com/articles/ev-stocks-nio-li-auto-tesla-stock-51598478701?siteid=yhoof2&yptr=yahoo
There is no stopping electric vehicle stocks these days.
EV stocks Barron’s tracks rose about 6% Wednesday, led by an incredible 28% gain in shares of Chinese EV maker Li Auto (ticker: LI).
The Wednesday gain of 6% is great, but looks paltry compared with the average 38% climb posted by the same EV stocks so far in August. The stock market is up too, but nothing like the gains of the EV stocks. The S&P 500 and Dow Jones Industrial Average are up about 6% and 7%, respectively.
Electric Performance
EV Stocks
*Note: Name of EV companies different SPACs are merging with.
Hyliion*
NIO
Lordstown*
Tesla
Li Auto
Nikola
Workhorse
Fisker*
S&P
BYD
Canoo*
What’s going on? For starters, analysts are raising price targets and upgrading shares. NIO (NIO) stock, for instance, has been upgraded twice in two days. UBS analyst Paul Gong took his NIO target from $1 all the way to $16 a share. Li also got its first two analyst ratings this week—both ratings are Buy.
Then there is Tesla (TSLA). It’s the EV behemoth that has helped catalyze the rally in the entire sector. Jefferies analyst Philippe Houchois increased his Street-high price target to $2,500 Wednesday. And investors continue to be excited about Friday’s stock split, Tesla’s potential inclusion in the S&P 500, and its coming battery technology day scheduled for Sept. 22.
Tesla shares closed up 6.4% to $2,153.17 on Wednesday, giving the world’s most valuable car company a market capitalization north of $400 billion. The company is more valuable than Johnson & Johnson (JNJ), making it the eighth most valuable company in America.
And there is more going on the world of electric vehicles.
On Wall Street, activity begets more activity. And there is a lot of capital market activity in the EV space lately. Li Auto recently went public. Several special purpose acquisition companies, or SPACs, have bought EV startups. Xpeng (XPEV) is expected to price its IPO Wednesday evening. Reports indicate pricing will exceed $13, the top end of its expected range. Investors want more EV exposure.
Year to date, EV stocks are up about 340%. The number a few days ago was about 250%. Whether they are up too high is anyone’s guess.
Tesla stock is up 0.8% to $2,171.04 in premarket trading Thursday.
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>>> Li Auto Inc. (LI), through its subsidiaries, designs, develops, manufactures, and sells smart electric sport utility vehicles (SUVs) in China. It offers Li ONE, a six-seat electric SUV that equipped with a range of extension system and cutting-edge smart vehicle solutions. The company was formerly known as Leading Ideal Inc. and changed its name to Li Auto Inc. in July 2020. Li Auto Inc. was founded in 2015 and is headquartered in Beijing, China. <<<
>>> Tesla or Nio: Which EV Company is Geared to Race Ahead?
SmarterAnalyst
August 19, 2020
https://finance.yahoo.com/news/tesla-nio-ev-company-geared-070031849.html
The demand for electric vehicles (or EVs) is expected to grow in the long-term even as COVID-19 has currently disrupted the electric vehicle market and the whole automotive industry as well. Several countries are encouraging individuals to transition to electric vehicles to bring down toxic emissions and ensure sustainability.
Cairn Energy Research Advisors estimate that global sales of electric cars will grow 36% in 2021 and will cross 3 million for the first time. Sam Jaffe, the research firm’s managing director, sees demand in China and Europe to be a major growth factor.
Using the TipRanks’ Stock Comparison tool, we will place Tesla—the market leader in the EV space, and China-based NIO alongside each other to see which stock offers the most compelling investment opportunity.
Tesla (TSLA)
Tesla garners a lot of attention from investors, analysts, and media owing to its rapid growth in the electric vehicle market and of course due to its controversial co-founder and CEO Elon Musk. Tesla stock has rallied about 339% year-to-date (as of August 17).
Better-than-anticipated operational performance, a possible addition to the S&P 500, the prospects of development of the next-generation electric car batteries and favorable comments from bullish analysts are some reasons that drove the spectacular rise in the stock.
Tesla’s second-quarter revenue declined 5% Y/Y to $6.04 billion but was way higher than analysts’ expectation of $5.37 billion. The company delivered adjusted EPS of $2.18 and GAAP EPS of $0.50, marking the fourth straight quarter of profitability. Skeptics questioned the company’s profitability and pointed out that it was possible because of the inclusion of higher-than-expected regulatory credits of $428 million.
Regulatory credits or Zero-Emission Vehicles credits are given by state regulators to incentivize the production of electric vehicles. Tesla sells excess credits to other automakers so that they can comply with regulations. Tesla bears feel that the company is depending on such credits to deliver profits. As per Tesla, regulatory credit revenue might double this year compared to 2019 but will reduce over time.
Meanwhile, Tesla’s second-quarter deliveries of 90,891 were down 4.7% Y/Y amid the pandemic but increased 2.7% compared to the first quarter. Despite the temporary shutdown of the Fremont factory due to COVID-19, the company reaffirmed its target to deliver 500,000 vehicles in 2020.
Meanwhile, Tesla’s Shanghai Gigafactory, launched in 2019, produces the company’s Model 3 vehicles for the customers in China. The company is building further production capacity through its factory in Berlin and the recently announced plant in Austin, Texas.
On August 17 Wedbush analyst Daniel Ives raised his price target for Tesla to $1,900 from $1,800 based on strong demand in China. He stated, “Looking ahead, we believe Musk & Co. are slated to announce a number of new potential 'game-changing' battery developments at its highly anticipated Battery Day on Sept. 22."
The five-star analyst retained his Hold rating and is positive about the company’s price cuts driving further demand. (See TSLA stock analysis on TipRanks)
Four Buys, 15 Holds and 9 Sell ratings for Tesla stock add up to a Hold consensus. After a stellar year-to-date rise, the average price target of $1,295 implies a possible downside of 29.45% in the stock over the next 12 months.
Nio (NIO)
Often touted as the Tesla of China, NIO is considered a pioneer in China’s premium electric vehicle market. The company, which has not yet turned profitable, was in the negative light in recent times due to its high cash burn rate and last year’s product recalls.
However, the financial crisis was addressed with a cash infusion from strategic partners and $428 million raised through an ADR or American Depositary receipt offering.
Nio reported better than anticipated second-quarter results. The company’s $0.16 loss per American Depositary Share (adjusted loss of $0.15) was lower than analysts’ loss estimate of $0.26. The second-quarter revenue of $526.4 million exceeded analysts’ forecast of $504 million. In terms of its local currency, the company’s revenue grew 146.5% to 3.72 billion yuan.
The company delivered 10,331 ES6 and ES8 vehicles, a Y/Y jump of 191%. Nio also provided strong Q3 guidance with estimated deliveries between 11,000 to 11,500 vehicles.
Nio also pleased investors by posting a gross margin of 8.4% compared to -33.4% in the prior year’s second quarter. Strong sales, lower material costs and improved manufacturing efficiency helped Nio deliver its first-ever positive gross margin. The quarter also marked the first instance of a positive operating cash flow for the company.
Now Nio is focusing on ramping up production to meet higher demand and commence deliveries of its third vehicle, the EC6—a luxury crossover SUV, in September.
So far Nio stock has advanced about 250% year-to-date as of August 17. However, an average 12-month price target of $10.28 indicates a downside of 26.83% in the stock. The Street’s Hold consensus for Nio stock is based on 2 Buys, 3 Holds, and 2 Sells.
Following the results, Piper Sandler analyst Alexander Potter increased his price target for Nio to $14 from $4 but maintained his Hold rating. In a research note, he stated "NIO arguably relies too much on partners for core capabilities (especially self-driving systems, batteries, and vehicle manufacturing), but the company may attempt to internalize these functions over time.” (See NIO stock analysis on TipRanks)
Tesla or Nio - the better choice?
The rising competition in the electric vehicles space from giants like Ford and General Motors and start-ups like Nikola is a matter of concern. Also, Tesla’s high valuation makes it risky and has been a topic of debate. However, the company’s technology and a diversified business model, which includes its solar energy business, give it a competitive edge.
Both Tesla and Nio stocks have skyrocketed this year and the Street’s average price targets do not indicate further upside. However, a more diversified business and better growth prospects appear to make Tesla a better long-term choice in the EV space compared to Nio.
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NIO - >>> Buy an Electric Car With No Battery? NIO Wants to Rent It to You.
Barron's
By Al Root
Aug. 20, 2020
https://www.barrons.com/articles/nio-stock-ev-battery-swap-service-rent-lease-51597938785?siteid=yhoof2&yptr=yahoo
NIO can do batteries as a service because it has always offered battery swapping technology.
Electric-vehicle maker NIO announced on Thursday the formation of a battery-asset company. The Chinese manufacturer wants to separate the ownership of the car from the ownership of the battery.
It is a novel idea. Providing batteries as a service, as NIO (ticker: NIO) puts it, has two main advantages. First, it lowers the price of the vehicle. The battery pack can cost anywhere between $5,000 and $15,000, based on size and available data on battery pricing.
A NIO ES6 with 300 miles of range can start at about $50,000. Without the battery the SUV would probably cost about $40,000, according to Nio’s news release. Of course, the car still needs a battery.
NIO’s idea is for the battery company—called Wuhan Weineng Battery Asset Company—to own the batteries and essentially lease them. Investors might say: So what? Well, the classic EV conundrum is that the car costs more than a comparable internal-combustion-engine car, but the electricity to run it is less expensive than gasoline. Under the leasing scenario, the car would now be cost competitive and the battery service would approximate gasoline costs.
The monthly fee for the NIO battery will be 980 yuan, or about $140. NIO said the fee includes six battery swaps a month. Accounting for variables, that is roughly up to 1,500 miles of driving range.
The second big reason battery as a service makes sense is, as batteries improve, EV drivers can upgrade. They aren’t stuck with the same battery back over the life of the vehicle.
NIO can do batteries as a service because it has always offered battery swapping technology. Battery pack swaps were originally thought of as a range-anxiety fix and to help with the speed of charging. Drivers can simply pull into an “EV filling station,” get a fully charged battery and drive away in minutes.
“As of today, NIO has deployed 143 battery swap stations across 64 cities in China, and completed over 800,000 battery swaps for our users,” CEO William Bin Li said in the company’s news release. “The advantages of our chargeable, swappable and upgradable battery swap technologies will continue to enhance competitiveness of NIO products.”
The new battery-leasing company will be 25% owned by NIO and include Contemporary Amperex Technology Co, or CATL, (300750.China) as a partner. CATL is a major supplier of EV batteries, along with peers such as Panasonic (6752.Japan) and LG Chem (051910.Korea).
NIO stock wasn’t moving on the news. Shares were down 1.9% near midday Thursday. Investors might have expected the announcement. They might not be happy with the terms laid out. More likely the stock wasn’t up because it has already done great in 2020.
NIO share are up 244% this year, far better than comparable returns of the S&P 500 and Dow Jones Industrial Average and traditional auto maker stocks. General Motors (GM) and Ford Motor (F) for instance, are down 21% and 26% year to date, respectively.
EV stocks Barron’s tracks are up about 250% year to date. And more companies, such as Li Auto (LI), have come to market in 2020, raising billions in the process.
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>>> Truck-Building Tesla Competitor Nikola Draws the Attention of a Short Seller
Barron's
By Al Root
June 10, 2020
https://www.barrons.com/articles/nikola-stock-tesla-semi-truck-short-seller-ipo-51591794032?siteid=yhoof2&yptr=yahoo
Nikola makes trucks that do things like transport goods on highways across America.
Nikola stock’s sharp rise has caught the interest of a noted short seller. Citron Research’s Andrew Left predicted that shares in the highflying trucking startup will fall 50% over the next month. He questions management, and said more competition from electric-vehicle behemoth Tesla could ding Nikola stock in the short run.
Short sellers such as Left make bearish bets on stocks by borrowing shares and selling them, hoping to buy them back later at a lower price and pocketing the difference.
Nikola’s Founder on the Future of Long-Haul Trucking
It is a bold call. After all, Nikola’s stock (ticker: NKLA) has risen roughly 130% over the past week, giving the company a market value exceeding trucking peer Paccar (PCAR) and even Ford Motor (F).
It has been quite a run since shares made their public debut on June 3. Nikola essentially went public at about $34 a share. Essentially and about are important modifiers here, because Nikola didn’t have a traditional IPO. It was purchased by a special-purpose-acquisition company called VectorIQ. Vector then changed its name to Nikola and its stock symbol to NKLA. The merger was announced in March.
Nikola makes trucks. The heavy-duty variety that do things like haul cement and transport goods on highways across America. Its smaller heavy-duty trucks are battery-powered. Those are due to be sold beginning around 2021. The larger semi-trucks are powered by hydrogen fuel cells and are due to be sold around 2023.
Left, for his part, is unimpressed by the early stock success, saying the company has been overly promotional. That is a charge short sellers levy from time to time when they think management is talking up its company’s stock.
The charge is difficult to support or quantify. Management teams, especially around public offerings, often talk about the best points of their corporate strategies. That is par for the course. Nikola, for its part, was scheduled to present on Wednesday at the Deutsche Bank investor conference, its first large public presentation since completing the Vector merger.
Nikola shares were taking a small hit in premarket trading, down about 0.9%. S&P 500 futures, for comparison, were up 0.3% and Dow Jones Industrial Average futures were up 0.1%.
In addition to Left’s tweet, Nikola stock might be reacting to reports that Tesla’s (TSLA) all-electric heavy-duty truck is being brought into production. The semi-tractor-trailer truck, introduced around 2017, is likely to be used for shorter hauls of less than 300 miles. Intermodal shipping giant J.B. Hunt Transport Services (JBHT) signed up as an early customer for the truck.
Intermodal refers to freight transported by highway and rail. J.B. Hunt moves a lot of freight between trucks and trains.
Tesla wasn’t immediately available to comment on the reports.
New stocks like Nikola are often volatile and driven by news flow. That seemed to be the case Wednesday. Investors should prepare for more such days. Over the long run, of course, Nikola’s business execution will determine the value of its shares.
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Nikola - >>> Why Shark Tank's Barbara Corcoran says Nikola founder 'lacks credibility' versus Elon Musk
by Zack Guzman
Yahoo Finance
June 19, 2020
https://finance.yahoo.com/news/shark-tanks-barbara-corcoran-says-nikola-founder-lacks-credibility-120656279.html
Electric truck maker Nikola (NKLA) may have gotten off to a hot start by more than doubling after becoming a publicly traded company this month, but it has yet to win over Shark Tank’s Barbara Corcoran.
On Thursday, Corcoran emphasized caution on the automaker that briefly saw its market cap swell beyond Ford’s this month, despite the company posting losses of nearly $200 million since its inception.
While the company has attracted comparisons to Elon Musk’s Tesla Motors, Corcoran said Nikola’s founder Trevor Milton may be a good salesman for bringing his company so much attention in such little time, but he has a ways to go to earn Musk’s credibility.
“I wouldn't put my money there,” she told Yahoo Finance’s YFi PM. “I'm a believer in Tesla, wholeheartedly. I don't feel the same way about Trevor. Here's what I give him: I give him great grades for being a phenomenal salesperson.”
Nikola, which was founded in 2014, hopes to have its first consumer electric truck dubbed the Badger delivered in the next two years. Milton told Yahoo Finance earlier this month that he hopes the Badger can begin its path to dethrone Ford’s sales-leading F-150 pickup truck when orders open June 29. Ford’s pickup has topped the category’s sales charts for 43 consecutive years.
Critics of Nikola have raised issue with the showmanship of Milton maybe going beyond what the company has delivered thus far. Bloomberg, for example, recently documented how Milton may have exaggerated at a 2016 showcase for its Nikola One semi-truck. At the time of the show, the truck was forecast to begin deliveries in 2020, but the company is now less comital about its timeline for the model and does not forecast revenue for it this year. Milton tweeted Wednesday that Nikola would be taking legal action against Bloomberg for what the company claimed was an “intentionally misleading story.”
To be fair, Tesla also once suffered criticism for shifting timelines and profitless quarter after profitless quarter. It took the Musk-led company more than a decade to go from founding to delivering its first mass production consumer model with its Model 3 in 2017, following its higher-end Roadster and Model S. Since then, however, Tesla has proven itself with real profits and real growth — something Corcoran says Nikola and Milton will have to show progress on quickly to justify its high-flying price.
“He lacks credibility because he’s not giving any clarity on when it's going to be delivered,” Corcoran said. “And you're declaring war on the most successful truck in the industry.”
For his part, Milton took Corcoran’s criticism in stride Thursday, noting that he has “some work to do” to win over the Shark Tank host.
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>>> Tesla (TSLA): The Battle of the EV Trucks Begins
TipRanks
July 1, 2020
https://finance.yahoo.com/news/tesla-tsla-battle-ev-trucks-164753644.html
On Monday, Tesla (TSLA) celebrated 10 years as a publicly traded company. The previous decade has provided enough reasons for a celebration, not least is the EV pioneer’s position as the most successful auto stock since its debu. Shares have skyrocketed more than 4,000% since going public.
Tesla has showed no signs of slowing down, either. It crept back over the $1,000 per share mark again on its 10-year anniversary, following Elon Musk’s suggestion that a second quarter loss wasn't inevitable, after all.
This remains to be seen when Tesla reports its Q2 vehicle deliveries this week. What has already been proved beyond doubt is Tesla’s ability to prove the naysayers wrong time and again.
The EV pioneer is battle hardened by now, but according to Wedbush analyst Daniel Ives, another battle is about to commence.
EV truck upstart and rival Nikola (NKLA) announced it had started taking reservations for its EV pick-up truck – the Nikola Badger - expected to hit the road in 2022. Ives argues the Badger “clearly goes after the EV leader Tesla with its Cybertruck design.”
The 5-star analyst believes there is strong demand for Nikola’s new offering; the new player has built a “formidable list of preorder customers.”
However, the Badger will go up against the Cybertruck, for which Ives estimates there is already a “staggering” amount of pre-orders “north of 650,000 with momentum building for this latest Musk brainchild.”
Whether there’s room for both in the pickup market remains to be seen. Preorder activity for the Badger over the next few months will make it easier to gauge the impact that the new trucks can have on a market dominated by Ford and GM, with roughly 3 million pickup trucks sold every year in the US.
Ives argues Tesla’s pick-up truck will have a role to play if his long-term forecasts are to be met.
“Ultimately for Tesla's stock to hit our $1,500 bull case, one key component will be future success on the pick-up market, Model Y, as well as new versions/models to supplement the growth of its linchpin Model 3 design globally,” Ives summarized.
To this end, Ives reiterated a Neutral rating on Tesla shares along with a $1,000 price target. This target suggests 11% downside potential from current levels. (To watch Ives’ track record, click here)
It appears the Wedbush analyst is in sync with the rest of the Street. TSLA's Hold consensus rating is based on 7 Buy ratings, 10 Holds and 9 Sells. The bears are in the driver's seat, as the $755.10 price target represents downside of nearly 33% over the next 12 months.
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Vroom, Carvana - >>> Vroom Soars on Its IPO. Here Are 5 Things You Need to Know About the Used Car Disruptor
The latest market debutante is chasing a $400 billion opportunity.
Motley Fool
by Jeremy Bowman
Jun 10, 2020
https://www.fool.com/investing/2020/06/10/vroom-soars-on-its-ipo-here-are-5-things-you-need.aspx
After a pause during the COVID-19 lockdowns, the IPO market is heating up again, and a smashing debut from Vroom (NASDAQ:VRM) Tuesday proved investors are hungry for new issues.
Shares of the online used car seller skyrocketed on opening day, more than doubling from its $22 IPO price, reaching a valuation around $5 billion. After seeing shares of fellow online car dealer Carvana (NYSE:CVNA) soar in recent years, investors are clearly excited for Vroom to hit the market. Should you take a ride with the used car debutante? Keep reading to see five things you need to know about the company before you decide whether to buy.
1. Vroom has a massive opportunity
The used car market is the single largest consumer product category in the U.S., making up $841 billion in annual sales last year, ahead of $683 billion in grocery sales and $636 billion in new car sales. In 2019, Americans bought about 40 million used cars.
The industry is also highly fragmented, making it ripe for disruption. Today, there are more than 42,000 dealers, millions of peer-to-peer transactions, and no single party owns more than 2% of the market. Brick-and-mortar chain Carmax is considered the market leader with nearly 2%. Consumers also dislike the traditional used car-buying experience, as 81% of respondents expressed dissatisfaction with the process in a survey from Dealersocket.
That sets up a great opportunity for online disruptors like Vroom, as the online used car market its expected to grow from just a 0.9% share of the total market currently, which is one of the lowest e-commerce penetration rate in a consumer category, to as much as 50% by 2030. If that forecast comes to fruition, Vroom will be looking at a $400 billion addressable market in just a decade, an appealing opportunity for a company that generated less than $1.2 billion in revenue in 2019.
2. Its core business is seeing triple-digit growth
Vroom's business is made up of three separate segments: e-commerce, Texas Direct Auto (TDA), and wholesale. TDA came to the business through a strategic acquisition in 2015 that gave the company its first vehicle recondition center as well as its only retail location. The wholesale business, meanwhile, is a byproduct of the e-commerce operations, as the company sells vehicles that aren't up to its standards to wholesale auction dealers.
The e-commerce business, built on its online marketplace of used car buyers and sellers, is the growth story. Though it made up slightly less than 50% of revenue last year, the e-commerce business will be the company's growth engine and should be 100% of investors' focus, since that's how the company is looking at the business' future.
In an interview, CFO Dave Jones explained that the company ramped up its marketing spending last April as it had the necessary inventory and technology in place to drive an acceleration in the business. Units sold on the e-commerce platform have more than doubled since then, and jumped 145% from April 2019 to April 2020. In the first quarter, average monthly visitors to the site jumped about 130% to 947,014, driving revenue in the first quarter up 159% to $233.2 million.
Considering the market opportunity and the strong demand, investors should expect the skyrocketing growth to continue.
3. There are some differences from Carvana
Jones said that Vroom has a lot of respect for Carvana, its larger e-commerce peer, and said from the customer perspective, the two businesses are similar, as both offer a streamlined process for buyers and sellers to handle used car transactions online. However, from an investor perspective, there are some key differences between Vroom and Carvana.
Vroom's business is centered around being asset-light, meaning the company owns relatively little property. That helps it keep fixed costs down and allows it to be financially flexible. Vroom only owns one of its vehicle reconditioning centers (VRC), which it acquired in the Texas Direct Auto deal, and has 13 third-party VRCs spread across the country. That allows Vroom to pass on some of the risks and costs to the operators who run those facilities. At the end of 2019, Vroom had just $7.8 million in property and equipment and generated nearly $1.2 billion in revenue.
By contrast, Carvana owns its reconditioning centers as well as the logistics network that brings cars to and from customers and its reconditioning centers, and its trademark vending machines. Carvana had $543.5 million in property and equipment at the end of 2019, and the company generated $3.4 billion in revenue.
Similarly, Vroom outsources financing for car buyers to partner banks and lenders, while Carvana provides loans itself and sells the loans to financing partners.
Being asset-light isn't necessarily an advantage, since doing so means Vroom may lose the potential to generate profits from the parts of the business it outsources. However, it does make the company more financially flexible and avoids some of the risk in owning hundreds of millions of dollars worth of support systems as well as the responsibility for the fixed costs that go along with them.
4. COVID-19 has been a tailwind
Like other e-commerce businesses, Vroom has seen a surge of interest during the pandemic and lockdown period, and third-party data backs up that trend. According to a survey from CarGurus, 61% of respondents would now consider shopping for a vehicle online. Before the crisis, that figure was just 32%.
If that pattern persists even when the pandemic is over, it could be a huge driver of Vroom's growth, because one of the biggest obstacles the company faces is simply getting consumers to consider buying or selling a car online. The impact of the pandemic, shutdown orders, and social distancing that have ensued is doing that work, marketing the idea of online car buying and selling, by itself.
Jones said Vroom's sales continued to surge in April and May, which were record months for the company as the desire to own a vehicle also seems to have increased due to fears of the virus. Those fears have led Americans to avoid public transit, airplanes, and ridesharing vehicles.
Finally, the pandemic could also provide a boost on the supply side -- which has historically been short of demand at Vroom -- as rental car companies are likely to accelerate fleet sales given that demand for rental cars has plunged during the pandemic.
5. Vroom has an eye on profitability
Like Carvana, Vroom isn't profitable. In 2019, the company had a generally accepted accounting principles (GAAP) net loss of $143 million.
Vehicles sold through its e-commerce business increased from 10,006 in 2018 to 18,945. Growth was even stronger in the first quarter, rising from 3,187 vehicles sold in the first three months of 2019 to 7,930 in the first quarter this year.
Jones said the business model was scalable, and that the company believes it will be profitable once it reaches 200,000 vehicles sold annually. If unit sales continue to roughly double, the company could reach that target in as soon as three to five years.
Still, top-line growth is the key figure to watch here. Vroom is tackling a massive market opportunity, and the company is just getting started with its e-commerce business, firing up the marketing to support demand and awareness only a year ago.
With a huge market awaiting it and triple-digit growth, it's clear why investors are excited about this e-commerce disruptor.
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>>> Nikola (NKLA) Soars Nearly 60 Percent on the Imminent Opening of Reservations for Its Badger Electric Truck
WCCF Tech
By Rohail Saleem
Jun 8, 2020
https://wccftech.com/nikola-nkla-soars-nearly-20-percent-on-the-imminent-opening-of-reservations-for-its-badger-electric-truck/
Nikola Corporation, the manufacturer of an electric version of the heavy-truck, is apparently hitting the road running following its merger with VectoIQ and a smashing debut on the NASDAQ index last week. As per the details revealed today, the reservations for the company’s much-anticipated Badger electric pickup truck will open on the 29th of June.
The founder and CEO of Nikola Motors, Trevor Milton, made the momentous announcement via a tweet:
As a refresher, Nikola unveiled the Badger electric pickup truck back in February 2020 to compete with Tesla’s much-anticipated Cybertruck. According to the details revealed by the company, the Badger will retail in two power configurations: a FCEV (Fuel-Cell Electric) or BEV (Battery-Electric). Though it sports a much more conventional design as opposed to the Cybertruck’s sharp corners and the futuristic vibe, the Badger offers impressive specs. As an illustration, the electric truck will offer a headline range of 600 miles through either of the two power configurations. Moreover, it will offer an acceleration from 0 to 60 mph in 2.9 seconds, a torque of up to 980 pounds-feet, and a peak horsepower of 906.
Nikola’s press release notes:
“The Badger will be outfitted with a 15-kilowatt power outlet for tools, lights and compressors, which is enough power to assist a construction site for approximately 12 hours without a generator.”
Nikola also claims that:
“With a fully loaded trailer and combined vehicle weight of 18,000 lbs., the Badger will be able to launch from a standstill on a 30% grade without motor stall.”
As we reported recently, the shareholders of VectoIQ – a Special Purpose Acquisition Company (SPAC) headed by the former General Motors (NYSE: GM) Vice Chairman Steve Girsky – approved the much-anticipated merger of the company with Nikola Motors last week, with the transaction achieving a formal closure on the 3rd of June. Nikola Motors has now become a wholly-owned subsidiary of VectoIQ, with the combined entity adopting the name Nikola Corporation.
Nikola (NKLA) Investors Should Prepare for Pain and a Historic Bout of Volatility This Week
Nikola Motors has already generated waves with its Class 8 electric trucks, garnering significant interest from the trucking industry. As an illustration, the company has registered around 14,000 pre-orders for these trucks, translating to potential revenue of up to $10 billion. So why has the company’s offering generated such an elevated interest? The answer lies in the manner in which these trucks will be powered: a choice between a hydrogen fuel cell and a battery that carries high energy density. According to Nikola’s claims, its battery possesses around four times the energy density of a conventional lithium-ion cell. In theory, this feat should double the range of an EV vis-à-vis a comparable vehicle powered by the lithium-ion cells. The company is currently developing a network of hydrogen refueling stations where its trucks can be refueled in a matter of seconds, thereby, reducing journey times. Moreover, without the added heft of a full-scale battery, fuel cell-powered trucks can, in theory, transport a greater quantum of cargo.
Nikola’s stock is up 60 percent today, as of 11:16 a.m. ET. This corresponds to a market capitalization of more than $20 billion. For comparison, please note that Tesla has a market cap of $160.23 billion.
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>>> Another Electric-Truck Stock Is Coming. How It’s Different Than Nikola.
Barron's
By Nicholas Jasinski and Al Root
June 28, 2020
https://www.barrons.com/articles/tesla-nikola-hyliion-ev-truck-electric-stock-51593121114?siteid=yhoof2&yptr=yahoo
The universe of buzzy electric-vehicle stocks is about to get a new entrant: Hyliion, a Texas-based battery-powered heavy-duty truck company founded in 2015. It plans to merge with Tortoise Acquisition Corp., a special-purpose acquisition company, by this fall.
Tortoise’s stock (ticker: SHLL) has already climbed nearly 70% since the announcement on June 19. Investors just can’t get enough of EV stocks these days, and SPACs are having a moment of their own. With Hyliion and Tortoise, investors have another way to play the EV trend.
The deal implies an enterprise value of about $1.1 billion for Hyliion. The company expects to have $344 million in sales in 2022, rising to $2.1 billion in 2024. The company’s projections have it earning $8 million in Ebitda, or earnings before interest, taxes, and depreciation, in two years. That grows to $602 million four years from now.
If Hyliion can achieve those forecasts, its valuation today could prove very attractive—even after Tortoise stock’s recent surge. It certainly would be cheap relative to stock in Nikola (NKLA), a highflying maker of heavy-duty electric trucks, but analysts have had a hard time pinning values on all EV stocks lately.
EV Fever
Electric and alternative-fuel transportation stocks have soared in the past month.
Workhorse Group Inc.
Nikola Corp.
Nio Inc, ADR (NIO)
Tortoise AcquisitionCorp. Cl A
BYD Co. Ltd.
Tesla Inc.
Hyliion, like Nikola, is seeking to disrupt the heavy-duty truck business, but it doesn’t want to build vehicles. It wants to sell its powertrain solutions to existing truck makers. In that way, the company is more analogous to Cummins (CMI) than Tesla (TSLA). A Cummins diesel engine, for instance, is available as an option on Paccar’s (PCAR) Peterbilt trucks.
Nikola, on the other hand, plans to make Nikola-branded trucks, as well as build and operate hydrogen filling stations where its fuel-cell powered models can refuel. Nikola became a publicly traded entity through a merger with a SPAC, just as Hyliion is planning to do.
Hyliion has two products, a hybrid drive system for existing diesel- powered trucks, and its Hypertruck ERX, which is an all-electric drive system for heavy-duty trucks. The hybrid system is available for purchase today. Penske Automotive (PAG) and Ryder (R), among others, are customers.
The ERX is slated to begin trials with customers in 2021, with volume production ramping up in 2022. It has a small battery pack that can be charged on board by a natural-gas-fired generator. It is a unique setup that saves truckers weight.
An electric truck designed for long-haul applications without a generator would have to have so many batteries that towing capacity would be compromised. It would simply be too heavy. Logistics companies and their customers would be paying, essentially, to haul batteries across the country. Hyliion believes its ERX will be lighter than existing diesel-powered rigs.
Natural gas is also a cleaner-burning, less carbon-intense fuel than diesel. Hyliion says there are already more than 700 stations in the U.S. that can refuel with natural gas. The same can’t be said about hydrogen-filling stations.
“Renewable natural gas is another megatrend,” said Thomas Healy, Hyliion’s founder and CEO. He’s referring to natural gas that is generated from sources such as landfills, not by taking it out of the ground. Burning it is theoretically “carbon negative” because the carbon dioxide that is released is less damaging to the atmosphere than methane just floating away.
“California believes it needs more natural gas powered vehicles, they have too much renewable natural gas,” Healy said.
By using renewable natural gas, just 335 ERX-powered trucks could eliminate a million metric tons of CO2 over their lifetimes, the company estimates. That certainly could be motivation enough for environmentally minded logistics companies.
But Hyliion also believes that the total cost of owning and operating a truck with an ERX drivetrain will be lower than for conventional diesel-powered trucks available today—even with a higher upfront cost. Tesla has made the same argument about the battery-electric truck it is developing.
There are promising early signs of interest. Agility (AGLTY.Kuwait), a global logistics company based in the Middle East, has a preorder for 1,000 ERX powertrains. Agility is also taking an equity stake in Hyliion, as part of a $325 million private investment in public equity, or PIPE, that will come when Hyliion merges with Tortoise.
It’s priced at $10 per share, well below Tortoise stock’s recent $17, but equal to what IPO investors paid. The proceeds of SPAC IPOs go into a trust until the company completes a merger, when shareholders can ask for their money back or participate in the deal. The value of Tortoise’s trust is $235 million or so, assuming no redemptions.
In another good sign, current Hyliion shareholders aren’t using this as an opportunity to cash out. The full $560 million from Tortoise and PIPE investors will go straight to Hyliion’s balance sheet. After transaction expenses, it will be put to developing the ERX platform and getting it ready for commercialization.
That makes this deal more like a late-stage venture capital investment—one that simultaneously takes the company public—than a traditional private-equity-style buyout of a company that uses a SPAC as the vehicle for the transaction. The cash goes toward funding growth, not into existing owners’ wallets.
“One of the criteria we established early on was that the SPAC was about deploying growth capital,” says Vince Cubbage, CEO of Tortoise Acquisition Corp., which went public in March 2019. “We weren’t going to do a deal where all of our money was going to a seller. We wanted to buy in, not buyout.”
Cubbage will join Hyliion’s board of directors, while Healy will remain CEO. Tortoise and Hyliion plan to close the transaction around the end of the third quarter of this year. The combined company will continue to trade on the New York Stock Exchange, but change its ticker to “HYLN.”
Tortoise stock is up 72% year to date, far better than comparable returns of the S&P 500 and Dow Jones Industrial Average.
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>>> Nikola Is Kicking Tesla Where It Hurts
InvestorPlace
by Josh Enomoto
June 26, 2020
https://finance.yahoo.com/news/nikola-kicking-tesla-where-hurts-163652551.html
When I was a young boy, I did what other males my age did, at least the cool ones: take karate lessons. Though it may seem comical now, I learned the foundations of honor, commitment, and discipline. These are the attributes that drive companies like Toyota (NYSE:TM). But upstart Nikola (NASDAQ:NKLA) is a completely different animal. And this is exactly why Nikola stock is so fascinating to speculators.
Not too far removed from my karate days, I had the distinct privilege of attending a one-day ninja class. Taught by a then-popular Hollywood stuntman, a ninja’s warcraft is wildly dissimilar from traditional martial arts. As you probably know, ninjas are assassins. They kill quickly and brutally for a profit, a perfect analogy for electric vehicle maker Tesla (NASDAQ:TSLA).
In my adult years, I came across a discipline called Krav Maga. More self-defense than martial art, Krav Maga is undoubtedly the most ruthless and violent system I have ever learned. Its key hallmark is what I would term holistic or three-dimensional fighting. Anything – your hands, your feet, a broken pipe on the road – is a weapon. Use it to destroy your opponent.
If you want to know the underlying ethos of Nikola stock, this is it.
Within this holistic system, Krav Maga teaches early on to kick men in the groin. Yes, we do learn some of the crazy, flying spinning kicks that you see in UFC matches. But to execute properly requires flexibility and skill. Like developing a mechanically sound combustion-based powertrain, these components take time to perfect.
But if you need to take someone out right now, you kick ‘em in the balls. That’s why Nikola stock is up.
Nikola Stock Is Both the Hunter and the Hunted
Here’s the thing – Krav Maga is a downright dirty system that you use to save your life. That’s it. But the temptation is that attacks down low are instantly effective. Thus, whether you’re facing off against Robert Downey Jr. or Robert Wadlow, all Roberts (to my understanding) have the same particular vulnerability.
Underlining Tesla’s incredible success is that they changed the rules completely. If they engaged in a boxing match with Ford (NYSE:F), as in combustion cars versus combustion cars, Tesla would lose. Instead, they went no-holds-barred with an electric platform; hence, Ford and other traditional automakers are keeled over, writhing in unbelievable agony.
Personally, I never kicked a man down there because if I did, I would break an unspoken contract among all men. If I go there, so will everyone else.
Initially, it’s no surprise that Nikola is doing what it’s doing. From a mechanical and engineering standpoint, EVs are easier to manufacturer. Utilizing the same “dirty” blueprint, NKLA built a remarkably compelling EV pickup truck. Just like that, sentiment soared for Nikola stock.
But precisely because EVs are easier and quicker to develop, Nikola stock will soon face mass competition. It’s the same reason why Krav Maga is a worldwide phenomenon now. Like EVs, the self-defense system distills centuries of hand-to-hand combat tactics to the most effective solutions for specific purposes.
Therefore, a grandma with a walking stick can be an effective practitioner. But in the business world, of course, that low of a barrier to entry is a headwind.
Should You Buy NKLA?
Among the stocks I own, I have the least conviction toward NKLA. Certainly, the company has many positives. First, I love the moxie that Nikola is flaunting against Tesla. It’s like President Theodore Roosevelt calling out President Donald Trump. There’s just something incredibly satisfying about a boastful man getting knocked down a few pegs by his own medicine.
Second, did you see the Nikola Badger? That’s a truck even a Harley-Davidson (NYSE:HOG) man would be proud to own. It’s a far cry from the M.C. Escher experiment gone wrong that is the Tesla Cybertruck. I don’t like to make investments based off one product. But for what it’s worth, I did buy Nikola stock.
However, some negatives exist too. Most worryingly, everybody is angling for each other’s sensitive parts. That’s why I always wore a protective cup after one harrowingly close call.
But that also begs the question: what is the equivalent of a cup in the EV market? In the traditional market, that’s easy to answer. For instance, a Ferrari (NYSE:RACE) is unmistakable, even if you’re blind. Inherent in the exhaust note is the soul of an Italian opera.
But what is branding in an EV? I’m willing to bet that our tech-cultural shift toward sleek sameness will drive Nikola stock higher in the long run. But in a world of testicular copycats, I’m not 100% sure who will remain standing upright.
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>>> Arcimoto, Inc. (FUV) - Strong Insider Buying
Yahoo Finance
July 6, 2020
https://finance.yahoo.com/news/3-stocks-flashing-signs-strong-144618221.html
The next company on our list, Arcimoto, is an Oregon-based ‘green economy’ player. Arcimoto has developed, and is marketing, a series of low-weight, high-efficiency electric vehicles. The company’s name for the line, Fun Electric Vehicle, is also the source of its stock ticker, FUV.
Over the past year, Arcimoto has expanded its EV designs to include delivery vehicles and rental fleet options. The company was forced to suspend manufacturing operations during the coronavirus crisis, but has since reopened its assembly facilities.
In a move to raise capital and expedite recovery from the pandemic’s impact, Arcimoto put 1.7 million shares of common stock on the market at the end of June. The move grossed $8.5 million, the proceeds of which will be used for general working capital, including acceleration of manufacture and delivery of pre-ordered vehicles.
The offering was an opportunity for insiders, as well as the public, and three company officers made significant purchases in recent days. Mark Frohnmayer, company President, bought 78,531 shares for an estimated $334,000, and two board members, Jesse Grant Eisler and Joshua Scherer, also made six-figure purchases. These were informative buys, the first in a year, and have moved the company’s insider sentiment far more positive than its sector average.
Amit Dayal, 4-star analyst with H.C. Wainwright, is bullish on Arcimoto, rating the stock a Buy and writing, “We once again reiterate the 'multiple shots on goal' aspect of the company's market positioning, where one vehicle platform has the flexibility to serve multiple applications and markets. Accordingly, pushouts in vacation oriented sales should, in our opinion, be compensated with pickup in delivery applications... The company's cash burn was lowered during the lockdown but should be expected to ramp with production picking up.”
Dayal’s $7 price target suggests that FUV has room for 3% growth over the next 12 months.
Recent share appreciation – the stock rose an eye-opening 378% in Q2 – has pushed FUV above the average price target, too fast for most analysts to adjust their outlooks. Shares are currently selling for $6.82, so the $5.38 average price target puts the downside potential at 21%. The Strong Buy analyst consensus rating is unanimous, based on 4 recent positive reviews.
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>>> Arcimoto, Inc. (FUV) designs, develops, manufactures, and sells three-wheeled electric vehicles. Its portfolio of electric vehicles includes Fun Utility Vehicle; Rapid Responder for a specialized emergency, security, and law enforcement services; and Deliverator for delivery of goods. The company was formerly known as WTP Incorporated and changed its name to Arcimoto, Inc. in December 2011. Arcimoto, Inc. was founded in 2007 and is headquartered in Eugene, Oregon. <<<
>>> NIO China Receives First Two Installments of Cash Infusion
Zacks
June 30, 2020
https://finance.yahoo.com/news/nio-china-receives-first-two-134201435.html
NIO Inc. NIO recently announced that its strategic investors, including Hefei City Construction and Investing Holding, CMD-SDIC Capital and Anhui Provincial Emerging Industry Investment, have completed cash injections for NIO Anhui, a legal entity of NIO China wholly owned by the company, for the first two installments of funding commitments.
NIO Anhui's minority investors include Jianheng New Energy Fund, Advanced Manufacturing Industry Investment Fund, Anhui Provincial Sanzhong Yichuang Industry Development Fund Co. and New Energy Automobile Fund.
The investor group has pledged a cumulative contribution of 7 billion yuan in five installments, with 3.5 billion yuan to be paid in the first installment, 1.5 billion yuan to be paid in the second installment on or before Jun 30, 2020, 1 billion yuan to be paid in the third installment on or before Sep 30, 2020, 500 million yuan to be paid in the fourth installment on or before Dec 31, 2020, and 500 million yuan to be paid in the fifth installment on or before Mar 31, 2021.
NIO will invest its core businesses and assets into NIO Anhui in China, including vehicle research and development, the supply chain, sales and services and NIO Power, or jointly as Asset Consideration. Further, the company would pump 4.26 billion yuan of cash into NIO Anhui. After conclusion of the transaction, NIO will own 75.9% of NIO China's controlling equity shares and the remaining 24.1% will be owned by the strategic investors jointly.
For the first two installments, NIO Anhui has already received 4.8 billion yuan, totaling 5 billion yuan in cash funding. It will earn the remaining 200 million yuan before Sep 30, 2020. Of the cash portion, the company has injected 1.278 billion yuan for the first installment and another 1.278 billion yuan for the second installment into NIO Anhui.
Strategic investments in NIO China will provide ample funds to support NIO's ongoing efforts to lead the premium smart electric vehicle (EV) technology and product development, and provide the best user experience and services. The company is aiming to focus on improving its production capacity in the near term and expanding network coverage to further boost growth.
Increasing demand for NIO’s ES6 and ES8 models is likely to drive its sales and earnings. Despite a slowdown in global auto sales — especially in the EV market — in first-half 2020 amid the coronavirus crisis, NIO managed to achieve record-high monthly deliveries in May 2020. Notably, NIO registered monthly deliveries of 3,434 units in May. Sales skyrocketed 215.5% year over year on solid demand for ES6 and ES8 models.
However, the company has been bearing the brunt of operational inefficiency for the past several quarters. While rising deliveries are expected to have aided NIO’s revenues, escalating R&D and SG&A costs might have dented operating margins.
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>>> The Electric Car Battery Boom Has Screeched to a Halt, For Now
Bloomberg
by David Stringer and Akshat Rathi
June 17, 2020
https://finance.yahoo.com/news/electric-car-battery-boom-screeched-211515316.html
The Electric Car Battery Boom Has Screeched to a Halt, For Now
(Bloomberg) -- Three decades of advances took lithium-ion batteries from powering handheld Sony camcorders to propelling Tesla’s popular electric vehicles. The rapid rise is facing a major test in the Covid-19 pandemic.
Demand for rechargeable batteries will decline for the first time this year, as sales of electric cars—the biggest user—slump with novel coronavirus pummeling the auto industry, according to BloombergNEF forecasts. Battery shipments to carmakers are forecast to fall 14% in 2020, and the effects of the slowdown are seen lingering into next year.
Major producers, including South Korea’s LG Chem Ltd., a supplier to Tesla Inc. and General Motors Co., have cut annual sales forecasts. Analysts expect the industry’s planned vast expansion of manufacturing capacity to slow down. Startups burning through cash as they work on potential breakthrough technologies are bracing for a tougher sell to secure funds.
And yet, from Silicon Valley laboratories to China’s Contemporary Amperex Technology Co. Ltd., the world’s top producer, optimism over the lithium-ion battery’s longer-term outlook is undimmed. Batteries, say automakers and utility companies, are still on track to become more powerful, cheaper and ubiquitous, not just in passenger vehicles, but also in additional forms of transport, consumer electronics and large-scale energy storage.
Despite short-term pressures, Zeng Yuqun, chairman of CATL, said there is “great confidence in the long-run.” In less than a decade, his company has grown to lead its industry: CATL’s sales rose 90% in 2019, according to BloombergNEF.
Lithium-ion battery demand has more than doubled since 2015 and remains on track for about a ninefold expansion from last year to the end of the decade. The sector is also forecast to keep lowering costs. Battery prices plunged 87% in the past 10 years, pushing plug-in electric cars to near sticker-price parity with gas guzzlers.
The pandemic might even prove to be an opportunity, with at least some governments, including those of Germany and France, using virus recovery funds to help accelerate a transition from internal combustion engines to battery-powered alternatives. France will offer about 8 billion euros ($9 billion) to its auto sector to bolster support for electric vehicles; Germany’s stimulus package includes about 5.6 billion euros for the sector and will require gas stations to install charging units. “This is a historic plan to confront a historic situation,” French President Emmanuel Macron said on May 26.
There are other sources of optimism. Volkswagen AG on June 16 announced an additional investment of $200 million in QuantumScape Corp., a battery technology startup founded by former Stanford University researchers, after committing $100 million in 2018. In May, the carmaker became the biggest shareholder of Chinese battery producer Guoxuan High-Tech Co. Ltd.
“The train’s left the station on both renewable power generation and electric vehicles, and no one is going to put that train in reverse,” said Jeff Chamberlain, chief executive officer of Volta Energy Technologies, a Chicago-based fund focused on energy investments. Chamberlain previously led energy storage initiatives at the Argonne National Laboratory, the U.S. government facility seen as having been pivotal in the transfer of battery technology from academia to the auto sector.
Battery makers also are quickly making progress on three key fronts: battery life, power and cost. CATL recently announced it will soon begin production on a battery that can operate for 2 million kilometers (1.2 million miles), or about 16 years. The capability puts it far ahead of any of the batteries on the market today, which typically are under warranty for about 150,000 miles, Zeng said.
Tesla and GM are each developing batteries that can last a million miles. Neither have yet said exactly when they’ll be ready. GM is “almost kind of there on longer life,” Doug Parks, an executive vice president, said at a May 19 Citigroup Inc. event. The car maker is “experiencing nearly that in some of our products today,” Parks said.Combustion engine vehicles are currently scrapped in the U.S. after about 200,000 miles, Tesla said in a June 8 report, meaning a longer-life battery pack could dramatically extend a car’s lifespan, particularly useful for taxis or delivery trucks. More important, a million-mile pack could be resold by a consumer to be deployed in a second vehicle, offsetting some of the initial purchase price.
Tesla is planning to provide further details on its battery innovations in the coming weeks at what it’s billing as a “battery day” investor seminar. It had tentatively been scheduled for April but was delayed on account of Covid-19 travel concerns and restrictions.
One critical update investors are expecting: the average cost of batteries used in Tesla’s various models. The carmaker’s numbers typically set the standard for others to catch up to, and the car battery still accounts for about 30% of the total cost of an electric vehicle. Better technology and rapid growth in manufacturing capacity has already sent the price of lithium-ion batteries tumbling, down from more than $1,000 a kilowatt hour to an average of $156/kWh at the end of 2019, according to BNEF.
An industry average battery price of $100/kWh, should be achieved in 2024, BNEF analyst James Frith said at a seminar in May, leading to price parity between electric cars and combustion engine vehicles. Additional savings through 2030 will lower costs further, though they’ll prove harder to achieve and will depend on additional advancements and new technology, according to Frith.Every battery has three key components: two electrodes, cathode and anode, with an electrolyte—usually a liquid—to allow the battery to charge and discharge.A key, pending breakthrough will be the addition of silicon into battery anodes in place of graphite. California’s Sila Nanotechnology Inc., which counts Daimler AG among its investors, says the silicon will help make a single charge last at least 20% longer.
The technology is being applied to consumer devices that are due to hit the market next year, said Sila CEO Gene Berdichevsky. There’s also potential for the technology to make its way into some supercars or luxury vehicles as early as 2023—and mainstream vehicles after that, Berdichevsky said. “There's now more engineering resources at the battery makers that we work with,'' he said. “There's more capacity on the production line to try new things."A more significant advance could be achieved before the end of the decade via the commercialization of solid-state lithium-ion batteries for regular cars. Such a development would enable smaller battery packs, reducing safety risks and dramatically improving energy density, allowing cars to travel much further on a single charge.
Solid-state technology does away with the liquid electrolyte, replacing it with a material such as ceramic, glass or polymer. Toyota Motor Corp., the leader in development of the technology, is on track for commercialization in the first half of this decade, the company said.Colorado-based Solid Power Inc. has started shipping its solid-state batteries to prospective customers in the auto industry for testing. The startup is likely to face a challenges in securing funding, while its products go through the years-long process of verification. The batteries won’t be available for purchase before 2025, if the company is able to navigate through the current economic downturn.
“I’d be lying if I said raising capital in the near term is not going to be challenging,” said Doug Campbell, Solid Power’s CEO.
Those able to withstand short-term pressures should benefit from a demand wave that’ll make about 31% of the world’s passenger cars—about 500 million—battery-powered by 2040, according to BNEF.
There’s also rapid growth coming from two-wheelers such as motorbikes and scooters, as well as in large-scale energy storage. Above Moses Lake, Washington, last month, the maiden flight of a converted, all-electric Cessna plane pointed to an additional potential source of demand.It’s a long-term outlook that’s offering the battery industry reassurance. With parts of California under shelter-in-place restrictions, the board of Sila Nanotechnology, which includes General Electric Co.’s financial crisis-era leader Jeff Immelt, met last month via videoconference to consider how best to handle a pandemic-led downturn.“They said: Keep going, be thoughtful in your investments, but keep investing,’’ Berdichevsky said. “Now is not the time to stop.”
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>>> Breaking down how long the automotive industry will take to shift toward EVs
Yahoo Finance
June 9, 2020
https://finance.yahoo.com/video/breaking-down-long-automotive-industry-205825859.html
Other car companies besides Tesla are hopping on the electric car band wagon, with companies like Nikola and GM developing electric vehicles. Yahoo Finance’s Rick Newman joins The Final Round panel to break down when he anticipates the automotive industry to make a hard shift to electric vehicles.
SEANA SMITH: Welcome back to "The Final Round." Well, electric cars are creating a frenzy, you can say, for investors. Tesla, of course, hitting an all-time high. Now we have a new stock that's getting a lot of attention. Its name is Nikola. You might have heard about it over the last week or so. Shares have continued to soar. Now they have a valuation of more than 26 billion.
And Rick Newman, I mean, when you take a look at some of these sky high valuation-- $26 billion. They don't have a car that's actually been manufactured that people are driving on the road right now. Yet, it doesn't seem like investors seem to care at all.
RICK NEWMAN: No, I mean, so is this the dot com bubble all over again, where we don't care if you have revenue, we just think you're going to dominate the future? Or is this something more like Tesla, which is obviously still around, whether it's a bubble or not? I don't know the answer.
There are some industry-- some well-known industry people involved with this company. So it has a young founder or co-founder. But Steve Girsky, who was vice chairman of General Motors, his firm merged with Nikola. So Steve Girsky is involved with the company. And he knows what he's doing. He was a Morgan Stanley analyst who went to General Motors around the time they were declaring bankruptcy. And he helped GM recover from its bankruptcy.
So they have some smart people involved. And the idea is to focus on trucks, all the way from pickups up to 18-wheelers, big trucks. So that's a-- that is a pretty good place to focus, I think. Because in a big truck, it's easier to pack a lot of batteries. You know, one of the things with batteries is the capacity. Just getting a range requires a lot of batteries. And they're heavy.
So maybe it's the right way to focus. If nothing else, this will certainly-- what's one more player that will perhaps speed the adoption of this technology and get the costs down, which is what you need.
SEANA SMITH: Yeah, and also, I mean, going off of that, there's so much at risk here. I mean, when you take a look at what Tesla continues to face, the stock is at an all-time high. Yet, they're now saying that they're facing issues of boosting the output of their Model Y crossover and Elon Musk saying that he's walked the assembly line on a weekly basis to try and troubleshoot production issues.
So when you see a name like Tesla that continues to have trouble, it's hard to kind of take a look at a name like Nikola and say that maybe they won't follow in similar footsteps to Tesla.
RICK NEWMAN: Well, they can only wish, I think. I mean, Tesla, the Model Y actually was doing really well. I mean, Tesla has had tons of production problems. But those production problems seem to be improving on a consistent basis, until the shutdown of the plant in Fremont, California. That's where the Model Y is built.
And, you know, Elon Musk, of course, opposed this shutdown and forced the reopening against what the county health commissioner said to do. So maybe that's-- maybe he realized that this was going to disrupt Model Y production.
Model Y is really important for Tesla because it's an SUV. It's the type of car people really want right now. And they need to get that car out in the market while people want to buy an SUV. So that's why Elon Musk is pressing there and walking the assembly line.
SEANA SMITH: Hey Rick, I mean, the big question I think that kind of goes along with all this is just how long it will take for electric cars to become this dominant form of transportation? There's a number of forecasts out there from various industry insiders or analysts. Mary Barra of GM was out recently, and she was basically saying that she thinks it's going to take decades. I'm just curious what you think about the timeline of this.
RICK NEWMAN: It depends how you frame the question. The timeline for what? I mean, we already have electric vehicles here. They're not science experiments anymore. But they're expensive. And right now, I think they're still less than 1% of all new car sales.
So if you're talking about a time when most cars sold are electric vehicles or the gasoline engine completely goes away, I think Mary Barr's completely right. It's going to be 20, 30 years, because the economics just can't make it happen any faster than that.
Tesla has a-- and Elon Musk have a very different point of view. They think the revolution is now. But these two companies, Tesla and GM, are looking at different universes in a way. So Tesla has almost always sold its cars to wealthy buyers who are environmentally oriented and can afford an electric vehicle.
And GM has to sell its cars to everybody. So GM sells the whole range of everything on the market, from small econo boxes all the way up to, you know, lavish pickup trucks that cost $80,000 or $90,000.
And I think GM-- you know, basically, the universe GM sees, I think they're right. I mean, how many people are going to have the money to spend an extra 10,000 or whatever it might be just to buy a battery powered car? Not a lot. Not a lot of the whole universe of car buyers has that money.
We just need to get the technology out to more people, to scale it more, get the costs down. And we probably still need some technology breakthroughs in terms of the batteries themselves, which everybody's working on, but aren't really here yet. And remember, these are still essentially lithium ion laptop style batteries strung together.
AKIKO FUJITA: You know, Rick, I was thinking about a few months ago, we were having this conversation about what all of this-- you know, what the economic pain we're feeling right now would mean for companies like a GM and their investments for electric vehicles. And the consensus seemed to be that there's going to be much more consolidation and that, you know, companies like Tesla who have this very loyal following will continue to do well.
But a lot of these companies that are sort of invested in EVs on the side may sort of put it to the side for a while. Does that argument still hold, or do you think companies are going to continue to invest in EVs because the long term potential is there?
RICK NEWMAN: Yeah, I think some of the big automakers for sure have-- I mean, it's not an all or nothing thing. But they've probably scaled back R&D into electric technology. So it's going to take a little bit longer. But General Motors still says that electric Hummer is coming on the same schedule as before, which I think was sometime next year or so.
You know, all the big companies are hedging their bets, and Tesla is making only one bet. I mean, Tesla's-- the whole company is wagered on the idea that electric cars are here to stay and that Tesla is going to be the best at it. And the other automakers are trying a lot of this and a lot of that.
And by the way, to go back to Nikola, they also say they're going to have a fuel cell hydrogen-powered vehicle, believe it or not. That's, you know, basically space travel to Mars. If you could get the technology right and scale that and get the cost down, hydrogen-powered vehicles are actually the most appealing form of transportation, just in terms of the science.
But they're really expensive, and nobody has figured out how to make them affordable yet. So if Nikola thinks they can do that, they could one up Tesla.
SEANA SMITH: Yeah. Well, I think that one of the similarities that we could draw between Nikola and Tesla is that both their CEOs, they're not shy. They both have very ambitious, lofty goals. And they put them out there in the public, so we'll see exactly what Nikola is able to produce on the other side.
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>>> Nikola (NKLA) is like Amazon and could be worth a $100 billion someday: founder
by Brian Sozzi
Yahoo Finance
June 4, 2020
https://finance.yahoo.com/news/nikola-is-like-amazon-and-could-be-worth-a-100-billion-someday-founder-165247261.html
The market likes what it sees in electric and hydrogen powered automaker Nikola, at least in day one of being publicly traded.
Shares of Nikola debuted on the Nasdaq Thursday under the ticker symbol ‘NKLA’. The stock popped about 7% in early trading action. Nikola didn’t undergo a traditional IPO process. Rather it merged with a special purpose vehicle called VectoIQ Acquisition Corp.
Prior to its debut on the Nasdaq, the company — founded by serial entrepreneur Trevor Milton — was valued around $3.3 billion after several funding rounds by prominent names such as ValueAct, Bosch and Wabco.
Milton isn’t shy on the potential for his company to change a trucking industry still reliant on fossil fuels. And if he could pull it off over the next decade, early big-name investors like Jeff Ubben at ValueAct have suggested Nikola may be worth at least $100 billion.
“How you get there is because we vertically integrated the entire supply chain. It’s very similar to Amazon,” Milton explained on Yahoo Finance’s The First Trade on why the business could be worth $100 billion. Nikola’s model is interesting to say the very least. It partners closely with truck manufacturers and essentially gets paid for its R&D prowess on battery technology and design. Nikola then leases its eye-catching semis — and the service — to companies.
Nikola plans to have its first electric-powered semi-truck out on the market in 2021 (likely before Tesla’s Semi) with hydrogen-powered options following in 2023. Its first round of charging stations will debut in California next year. The company has lost close to $200 million since inception. But, Milton tells Yahoo Finance orders are far more than the most recent disclosure of 14,000 valued at $10 billion.
“We stopped taking orders for a period of time. Ultimately what happened fleets were told the trucks were going to be five years out. That’s too far to plan. Once we hit about $10 billion in orders, we were making people mad. If we were to open all those orders’ books up right now with all the people that have said hey, we want these trucks, you would see a much, much, much higher number than that,” Milton added.
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Lucid Motors - >>> Electric Cars Are About to Start Rolling Out of the Arizona Desert
Lucid Motors expects to start car production by year-end.
Bloomberg
By Edward Ludlow
May 22, 2020
https://www.bloomberg.com/news/articles/2020-05-22/electric-cars-are-about-to-start-rolling-out-of-the-arizona-desert
On the outskirts of a small town less than 50 miles southeast of Phoenix, a 720,000 square foot electric vehicle factory is arising in the desert. If all goes as planned, a luxurious new battery-electric sedan will roll off its production line by year’s end.
Lucid Motors, a U.S. startup backed by Saudi Arabia’s Public Investment Fund, is building the factory and slated to start manufacturing its debut model later this year for delivery in early 2021. Lucid says construction has stayed on schedule at a time when other automakers have been forced to halt output and delay key models due to the coronavirus pandemic.
Through a series of logistical maneuvers, help from parts suppliers and a bit of good fortune, Lucid executives say they’ve been able to move forward with installation of critical assembly-line equipment such as robotic arms and precision tools including stamping presses and jigs.
“It was luck. I must say that,” Peter Hochholdinger, Lucid’s vice president of manufacturing, said in an interview.
A big contribution of good karma has come from location. Arizona did not prohibit construction work along with much of the rest of the U.S. starting in March. After completing the steel structure in February, Lucid finished the exterior walls and roofing and recently has taken delivery of production equipment from suppliers including Hokuto, a parts-mounting device maker. Equipment manufacturers based in Asia were quick to reopen after Japan, China and South Korea allowed businesses to resume operations.
Lucid hasn’t entirely avoided virus-related snags. Its paint-shop equipment supplier Durr Systems initially planned to complete its work for the facility at a manufacturing site in China. When that government imposed its shutdown, the job shifted to a Durr site in Mexico. After businesses then began to shut down in North America, the company reverted back to China, which had lifted restrictions. Hochholdinger said all this caused only minimal delay.
Suppliers also diverted resources to Lucid from other automakers that had to pause projects in the midst of virus shutdowns, Chief Executive Officer Peter Rawlinson said in an email.
Even so, building a factory with 200 people on site at any given time has not been easy. To keep workers safe and construction moving forward, Lucid says it has implemented strict social-distancing and sanitation protocols. Workers are required to wear face masks and goggles at all times and multiple temperature checks are done at the site’s single point of entry using an infrared thermometer. Hochholdinger said any worker not wearing a mask or registering a temperature above 100.4 degrees Fahrenheit (38 degrees Celsius) is asked to leave the site.
Virus-induced fevers aren’t the only potential hot spots. Temperatures can reach the high 90s in Casa Grande in May, so Lucid installed a cooling tent for workers to take breaks while maintaining distance.
Lucid trucked in 11.4 million pounds of steel and 67.4 million pounds of concrete. While the initial production volume the company is targeting is in the tens of thousands, the plant has been designed to eventually make as many as 380,000 vehicles. That’s more than the roughly 367,500 vehicles Tesla delivered last year, all of which were built at its plant in California.
Building from a bigger blueprint now will make it less costly for Lucid to expand in the future, Hochholdinger said. Initially, the general-assembly area and paint shop will be housed together, with a smaller building for the body shop. In the longer term, Lucid plans to move assembly to its own building and expand the paint shop using the vacated space.
Powertrain production is in a repurposed warehouse seven miles away from the main factory site. Hochholdinger said assembly of battery packs—using cells imported from LG Chem— won't require as much specialized equipment or bespoke installation, so the current arrangement is a cheaper, more straightforward option.
Lucid touts the operation as the first greenfield electric-vehicle site in the U.S. Tesla, by comparison, invested billions of dollars into what had been a joint-venture facility for Toyota and General Motors in Fremont, California.
While it was able to afford building from scratch, Lucid is still operating on a tight financial leash. The company received more than $1 billion from the Saudi fund in September 2018 and has not raised any additional money since. Hochholdinger credits a “nitpicky” finance team that requires justification for every purchase order with keeping the company within its budget. Rawlinson, the CEO, also has preached penny-pinching since taking the reins in April 2019.
In several interviews over the course of a year, Rawlinson, formerly the chief engineer of Tesla’s Model S, reiterated the money raised from Saudi Arabia’s PIF would be adequate to get Lucid through the factory build to the start of production.
The debut Air model, which is expected to sell for more than $100,000, can be ordered online, though buyers will be able to kick the tires at one of nine showrooms in the U.S. that Lucid plans to open this year in California and Florida. It has additional outlets slated for next year in Chicago, New York, Washington D.C. and Europe.
Prior to joining Lucid, Hochholdinger also was at Tesla as vice president of production in charge of the factory in Fremont. Before that, he spent 24 years at Audi and oversaw annual production of 400,000 cars at the peak of his career.
“It did teach me you can do things differently,” Hochholdinger says of his time at Tesla and Lucid. “You don't have to do 100% of the classic things car makers do.”
The city of Casa Grande agreed to reimburse $12.6 million of construction costs and contribute $1.5 million to Lucid’s training budget. The money will be paid if construction benefits local infrastructure and Lucid hires 1,114 full-time local workers, Craig McFarland, the city’s mayor, said in an email. Lucid has hired 733 workers so far, he said.
Arizona also offered $6.3 million in grants and $43.7 million in refundable tax credits if certain conditions are met. Lucid hasn't gotten any of these incentives yet because it hasn't met agreed-upon milestones, according to a spokeswoman for the Arizona Commerce Authority.
Lucid so far has avoided virus-related pitfalls other electric-vehicle startups have suffered. China’s Byton has furloughed half its California staff and delayed the start of vehicle production in China. Rivian Automotive, backed by Amazon and Ford Motor, also has delayed the start of production for its all-electric pickup and SUV.
Lucid says it has actually accelerated hiring, adding 120 new employees since mid-March, and is currently advertising 250 open positions. The company has not furloughed any of its employees or cut pay or hours, and it’s actively recruiting from competitors, Rawlinson said.
Lucid broke ground on the Casa Grande site in early December 2019, so construction could end up being completed within a year. Still, the company’s ramp-up will be slow. Hochholdinger said there will be 700 people working on production when the company's first car launches, a fraction of the more than 10,000 that Tesla employs at its factory in California.
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>>> Chargers Are the Final Roadblock to America’s Electric Car Future
As long as there aren’t enough fast plugs in enough places, buyers and big automakers will stay away.
Bloomberg
June 1, 2020
https://www.bloomberg.com/news/features/2020-06-01/electric-car-chargers-will-determine-america-s-green-future
Rods and waders were already packed into the electric Jaguar I-Pace as it gorged a few more electrons from the wall of my New Jersey garage. A quick glance at a map of northeastern Pennsylvania revealed charging stations clinging to the Delaware River like so many spots on the brown trout I was hoping to catch.
A few days later, I pulled up to one of those chargers on the picturesque main street of Honesdale, only to realize it was a level 2 unit—one step above a standard outlet. It would take four hours before the car had enough juice to make the 100-mile trip home. Eleven miles down the road, it was the same story. And while that spot had a superfast Tesla charger, it was incompatible with the I-Pace. The nearest level 3 charger that would work was 58 miles away. So I gave up and settled in for a while.
Electric car-range anxiety revolves around a brutal equation: Remaining miles of battery life (as estimated by the car) minus miles to destination equals hope (or despair). Making matters worse, the answer varies from one minute to the next, depending on terrain and speed. Desperate battery-powered travelers can be easy to spot: They are often sweaty (no air conditioning), driving slowly and—when going uphill—instinctively leaning forward in their seats.
Failing to note the difference between a level 2 charger and a harder-to-find level 3 charger is often the mistake of an electric vehicle rookie. Had I realized the distinction, I would never have considered a car such as the I-Pace (it was a loaner), or any of the dozens of Tesla rivals set to debut in coming years. For the future of electric vehicles in America, that’s a really big problem.
Chargers Wanted
Fast-charging stations for EVs are scarce outside major U.S. urban centers and their surroundings
Note: Shown are public stations only with at least one plug of a fast-charging type for which active status was confirmed within the last six months, as of May 28; excluded are Tesla-only stations; some stations operate during business hours only. "Remote" are stations for which the nearest station is outside a radius of 100 miles.
Before the pandemic struck, the auto industry had plans to spend at least $141 billion over the next few years to retool supply chains in a historic shift from internal combustion to battery-driven machines. The financial reasoning was clear: Roughly one-third of U.S. drivers say they may go electric the next time they buy a vehicle.
Dozens of new electric models have been planned, almost all of which will have a 200-mile charging range. Getting to 200 is a big deal: for years, the question of battery capacity chained the EV market to its crib. But while range anxiety will soon be banished from the showroom, it remains very much alive on the open road. Huge swaths of the U.S. are without charging stations, a reality that consultants such as McKinsey say may be the largest barrier to mass EV adoption in America.
On average, Americans drive only 37 miles a day, a distance easily covered by almost every EV on the market. Only 15% of the miles logged by the average U.S. car come during trips that are 100 miles or longer.
Buying a vehicle in the U.S., however, has long meant purchasing the freedom to go anywhere you like. Nick Nigro, a former engineer and founder of EV research group Atlas Public Policy, said the limiting factor many see when they look at an electric vehicle is the risk of being stranded on the side of the road, even if it would rarely if ever be an issue.
“It that’s irrational, it doesn’t matter,” Nigro said. “Buying a vehicle is not rational.”
Speed is another problem: Of the 64,000 vehicle-charging plugs in the U.S., only about one in five can juice a dry machine in less than an hour, a Bloomberg News analysis of U.S. Department of Energy Alternative Fuels Data Center figures shows.
Most plugs are essentially for shoppers or commuters, not long-distance travelers. When filtered for level 3 chargers, small EV deserts become big ones: All of North Dakota and most of Mississippi, West Virginia and Wyoming are just a few examples. Alabama, Montana, Nebraska and western Kansas are pretty parched for power, too.
A range of charging startups do promise thousands of new chargers, though timelines are hazy, and even the most ambitious plans will still skip much of the country. Thus the U.S., the world’s No. 2 auto market, is stuck in a microeconomic staring contest of sorts: Without chargers, rural drivers aren’t likely to go electric. And without enough buyers, automakers aren’t likely to ramp up production.
“It is the classic chicken-and-egg problem,” said Brian Collie, senior partner at Boston Consulting Group. “And this is something that is not going to be solved in the next year or two. It’s going to take a decade-plus to get what we really need.”
Sometime in the next couple of weeks, the world’s one-millionth public electric vehicle outlet will start powering cars, according to BloombergNEF; only 8% of those cords are in the U.S. The coronavirus has likely exacerbated the charging gap, thanks to deep economic uncertainty, unprecedented layoffs, production disruptions and low gasoline prices. Global EV sales are expected to fall 18%, to about 1.7 million units this year, with an inordinate share of that swoon happening at U.S. dealerships.
In the Upper Midwest, the future of driving comes to a halt in the parking lot of Noodles and Co., in Moorhead, Minnesota.
Hard by I-94, customers can plug in while picking up gluten-free Mac & Cheese and cauliflower rigatoni. To the west, just across the Red River, is North Dakota, but for EV drivers planning a road trip it might as well be the Rocky Mountains. The closest public, fast-charging station in that direction is 759 miles away, at a Harley-Davidson dealership in Belgrade, Montana—more than one-quarter the distance across the country—and it closes at 6 p.m.
For charging networks, the calculus is unforgiving. Not only is a rural station a bet on future demand, but an expensive one at that. The hardware for a level 2 charger costs $2,500 to install. Infrastructure for a level 3 charger, however, can easily top $320,000, according to a recent study by the Rocky Mountain Institute, a nonprofit focused on energy.
Such a unit can pump up to four times more electricity per minute than a standard outlet because it’s equipped with liquid-cooled wires and a high-capacity conduit. The surrounding grid often requires stronger feeders, new meters and transformers that cost up to $173,000 apiece. Digging trenches for cables and building a structure to protect the pumps adds to the price tag.
In other words, only the busiest fast-charging stations operate in the black. Build one too far from a buzzing city or interstate corridor, and you might as well set your money on fire. “The math just doesn’t work,” Bloomberg Intelligence analyst Kevin Tynan said.
As for consumers, charging rates vary widely by region, based predominantly on rates set by the state utility regulator. On average, commercial electricity in the U.S. trades at about 10 cents per kilowatt hour. At that rate, it costs about $6.60 to fill up a Chevrolet Bolt, roughly 2.5 cents per mile. But it’s seldom that cheap because EV stations typically charge by the minute, rather than by the amount of electricity used, and they often add service or membership fees.
EVgo, a 10-year-old charging company based in Los Angeles, said it operates 815 fast-charging stations in the U.S. At least 115 million Americans live within a 15-minute drive of an EVgo plug, which equates to roughly half of all licensed drivers. Ideally, each customer has a few plugs to hit regularly—say, one at a grocery store, one at a gym and a third near the local school.
The company prefers to position chargers in clusters around higher traffic regions, as opposed to long strands of plugs that would help shrink charging deserts but get less use. In some parts of the country, EVgo said it can’t build chargers fast enough. “We’re barely skating ahead of the puck,” said Julie Blunden, EVgo’s executive vice president of business development.
The companies use rate is high because it has skipped over much of the country. “What we won’t do is build willy-nilly and then wait three years for demand to show up,” Blunden said. Population density, the number of nearby EV owners and traffic at existing EVgo stations dictate where new chargers will go.
ChargePoint, another big name in charging infrastructure, has about 715 fast-plug stations and thousands of slower charging stations and is squarely focused on regions where EVs already live. Apartment buildings and urban parking garages are low-hanging fruit. according to CEO Pasquale Romano. Lately, the company’s fastest growing business has been company parking lots whose electric output is often subsidized by the employer.
“Would I say that it’s perfect? No,” Romano said of the business model. “Is it close enough for where the market is right now? Yeah.”
Even EV owners in major cities need plan carefully. Traveling from Raleigh-Durham, North Carolina, to the Outer Banks, for example, is dicey; there are just two public, fast-charging outlets on the entire strip of barrier islands. From Austin, Texas, the Hill Country to the Northwest is ill advised. And a ski trip from Albuquerque, New Mexico, to Taos is still a nail-biter in a Chevy Bolt.
Automakers, however, are largely staying on the sidelines, waiting for EVgo, ChargePoint and others to fill the gaps. General Motors has said it’s focused on a “zero-emission” future, yet it’s neither building charging stations nor buying any. Rather, it’s teamed up with Bechtel Group, a Virginia-based engineering company, to pitch outside investors to bankroll thousands of new chargers.
Ford, meanwhile, has cobbled together a network of sorts—dubbed FordPass—that will help its EV buyers find and use plugs operated by EVgo, Chargepoint and others. The network will be “the Pokemon Go of charging,” said Ted Cannis, Ford’s head of electrification. “‘Look, they’re all around you; here’s how you find them.’”
Ironically, it took a pollution scandal to get Big Auto into the charging game. Volkswagen, as part of its “Dieselgate” settlement, is spending $2 billion to install new chargers across the U.S. via a company dubbed Electrify America. At the moment, 428 of those sites are on line, and the network will expand to 800 by 2022. Its “convenience-store” model is focused on building out regional networks of chargers, ideally at retail sites, said Brendan Jones, the company’s chief operating officer until he left in March.
An additional $2.7 billion is being funneled by VW to individual states, up to 15% of which can be used to build charging infrastructure. Slowly, that money is trickling into new chargers. Maine, for example, intends to use $3 million to subsidize up to 80% of the cost of new fast-charging stations along a number of predetermined travel corridors.
While charging tendrils creep, the small convoy of new, battery-powered vehicles has been struggling to gain traction. From its debut in October 2018 through the end of last year, Jaguar has sold fewer than 3,000 I-Pace SUVs in the U.S., the machine that I sputtered around the Delaware River; (Tesla has been selling more of its Model 3 machines of late). Audi’s E-Tron has been slightly more successful since it hit the road in spring 2019, but it has yet to sell more than 2,000 in a quarter.
Meanwhile, last year saw huge declines in demand for older, more established EVs, including BMW’s i3 (-21%), the Chevrolet Bolt (-9%) and Nissan’s Leaf (-16%). Given the high cost of massive batteries, profit margins are still far fatter on gas-burning machines, which relegates these EVs to a niche business at best.
Plug Power
With fewer fast-charging opportunities, Tesla rivals have struggled to get sales momentum in the U.S.
Note: Tesla models include: Tesla Model 3, Tesla Model S, Tesla Model X. Competing models include: Audi E-Tron, BMW i3, Chevrolet Bolt, Jaguar I-Pace, Nissan Leaf and VW e-Golf.
Of course, the anemic sales figures may have something to do with how few of these machines are being made. “I applaud all the announcements,” said ChargePoint’s Romano. “But I’m very frustrated … the initial production capacity for a lot of these vehicles is not aggressive enough.”
There is, of course, a helpful proxy for figuring out what EV demand might look like in a more robust charging landscape. It’s a scrappy young company you may have heard of: Tesla.
The long-held narrative of mainstream auto executives (“We would make more electric vehicles if people actually wanted them”) has been flattened under a parade of Teslas, from the Model S and Model X to the popular Model 3. The automaker decided early on to build its own charger network, realizing there would be little financial incentive for the private sector to take a capital-intensive risk on a new market—one essentially created by a single company.
Shrewdly, Tesla made its charging club exclusive. The company’s fast outlets are proprietary and can’t be used by another brand’s vehicles (Adapters are available, so Teslas can use other charging systems.) In the U.S., there are slightly more Tesla charging outlets than there are on all other fast-charging networks combined.
Because Tesla CEO Elon Musk is more interested in selling vehicles than electricity at charging stations, his plugs are scattered more widely around the country. For example, Wyoming has 10 Tesla charging stations but only one fast-charging plug suitable for a Jaguar I-Pace. West Virginia is a little more balanced; it has eight Tesla stations and two fast-charging spots for other EVs.
Tesla Charger Network
Tesla-only stations are more well-spread across the U.S. than regular stations
Note: Shown are Tesla-only stations for which active status was confirmed within the last six months, as of May 28. “Remote” refers to stations for which the nearest station is outside a radius of 100 miles.
Wood’s High Mountain Distillery bubbles up whiskey and gin in Salida, Colorado, about 140 miles southwest of Denver. When a regular customer asked for an EV charger so he could top off his vehicle on long trips, founder P.T. Wood installed one.
Wood, who is also mayor of the small town, was motivated by a trickle of EVs that regularly passed through. He applied for state grant money and installed six level 2 chargers at a cost of about $30,000 apiece. Virtually overnight, he said, Salida and the nearby Monarch Mountain ski resort were on the map for every Denver resident with a long-range EV.
“They have nothing better to do but walk around and spend money,” Wood explained. “So you can see the economic benefit.”
Small clusters of plugs such as those in Salida are popping up all over the country. In the past two years, the city of Healdsburg, California, 70 miles north of San Francisco, installed 12 level 2 chargers that are free to use after business hours.
“At 5 o’clock, it’s like EV sharks in the parking lot,” said Felicia Smith, the city’s utility conservation analyst. “They’re swarming, trying to get a spot.” The stations emboldened Rhea Borja, Healdsburg’s public information officer, to finally buy a Chevrolet Bolt. “Every time I drive by a gas station, I flip it the bird,” she said. “It’s extremely liberating.”
At some point in the next 10 years, convenience stores and infrastructure investment funds will likely rush into the charging space. Utilities meanwhile have asked for permission to build an additional 245,000 plugs, some $3.3 billion in infrastructure that they can offset by raising rates on the electricity being piped in to homes and businesses.
“You know Silicon Valley is fond of quips, and one of them is, ‘It goes slow until it goes fast,’” Romano said. “In this case, there is a lot of truth to that. It’s all going to flip very quickly.”
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>>> Tesla China Rival NIO Is Bullish About Domestic Market Growth
Bloomberg News
May 31, 2020
https://www.bloomberg.com/news/articles/2020-05-31/tesla-china-rival-nio-is-bullish-about-domestic-market-growth
NIO chief sees room for growth in market share for EV makers
Automaker isn’t ruling out a stock-exchange listing in China
NIO Founder William Li Is Bullish About Domestic Market Growth
NIO Inc. founder William Li said the long-term growth potential of China’s electric-vehicle market remains in place, boding well for his company even as competition from the likes of Tesla Inc. intensifies.
The country’s auto market has started to recover from the depths of the coronavirus pandemic, and the minuscule market share of electric cars means they have a chance to grab sales from gas guzzlers, Li said in an interview on Bloomberg Television.
But he has his work cut out. Electric-car sales have declined for 10 straight months in China and are forecast to drop 14% this year to fewer than 1 million units, according to BloombergNEF. Meanwhile, global electric-car leader Tesla started deliveries from its massive new Shanghai plant around the start of the year.
“We do compete against each other, but in general we are allies,” Li said, stressing both are trying to win users from gasoline rivals. “In fact, our sales kept growing since Tesla started production in Shanghai.”
More From Hyperdrive -
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China Is Trying to Salvage Its Bruised Electric-Car Industry
NIO predicted Thursday that its deliveries and revenue this quarter will more than double from a year earlier, as well as from the first three months of 2020. The company also reported a narrower first-quarter loss after curbing spending.
In April, the company struck a definitive pact for a 7 billion yuan ($1 billion) investment from entities led by the Hefei municipal government in China, alleviating concerns that it is running out of cash. That funding and potential future financings have put NIO on a solid footing, Li said.
“We are confident to have secured sufficient funding for the company’s development,” Li said.
The April fundraising effort paves the way for more Chinese financing for New York-traded NIO, Li said. That could prove helpful as U.S.-China tensions are heating up, with Chinese companies listed in the U.S. facing a threat of being forced out. The company now meets the criteria for a local Chinese listing, though it has no concrete plans for one, he said.
“This isn’t a challenge for NIO only,” Li said. “We wouldn’t exclude any potential options.”
Shares of NIO have lost more than a third of their value since the company’s 2018 initial public offering in New York.
Li also described Volkswagen AG’s plans, announced last week, to deepen its relationship with a Chinese EV partner in the Hefei region as “very positive news” for NIO. The move signals that the area is emerging as a powerhouse in the EV industry, and Li said NIO is also seeking to increase cooperation with local partners and encourage its suppliers to invest more in the region.
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>>> Why NIO Stock Is Up Sharply Today
Sales appear strong ahead of earnings.
Motley Fool
John Rosevear
May 26, 2020
https://www.fool.com/investing/2020/05/26/why-nio-stock-is-up-sharply-today.aspx
What happened
Shares of Chinese electric-vehicle maker NIO (NYSE:NIO) were up on Tuesday, on signs of strong demand for its vehicles ahead of its earnings report later this week.
As of 1:30 p.m. EDT, NIO's American depositary shares were trading up about 13.8% from Friday's closing price.
So what
With the COVID-19 outbreak receding in China, demand seems to be strong for NIO's upscale electric vehicles -- even without dealer visits. China Daily reported that a 40-minute NIO livestream last week, in which CEO William Bin Li presented the company's vehicles in detail and answered questions, led to 320 vehicle orders, 5,288 test-drive appointments, and total sales of 150 million yuan ($21 million) by the next day.
The report fed into growing investor excitement around NIO, which secured what appears to be a long-term funding deal last month. The deal, with economic-development authorities in China's Anhui province, will provide NIO with 7 billion yuan ($981 million) in new funding in exchange for a 24.1% stake and an agreement to move NIO's operations to Anhui's capital city, Hefei.
Now what
Auto investors still have some big questions related to the structure of NIO's deal with authorities in Anhui. The parties are creating a new company into which NIO will put most or all of its assets in China in exchange for a 75.9% stake. But it's not clear what will will happen to NIO's debt -- or exactly what its U.S. shareholders will own once the transaction is completed.
The good news is that more information, and (hopefully) answers to those and other questions, should be forthcoming when NIO reports its first-quarter earnings before the market opens on Thursday, May 28.
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>>> Nio Is a Solid Bet for the Chinese Electric Vehicle Space
InvestorPlace
Louis Navellier and the InvestorPlace Research Staff
May 15, 2020
https://finance.yahoo.com/news/nio-solid-bet-chinese-electric-172557397.html
Beijing is doubling down on its commitment to electric vehicles and considering the size and potential of the Chinese economy. That’s worth taking note. And one of the best ways to bet on the Chinese EV market is with Nio (NYSE:NIO) and NIO stock.
Shanghai-based Nio, which is often called China’s answer to Tesla (NASDAQ:TSLA), manufactures smart, electric, and autonomous vehicles.
Like Tesla, it positions itself as a futuristic automotive company with a heavy emphasis on lifestyle. Nio even has a fashion line which it says is inspired by its Nio EP9 vehicle.
Carrying the analogy further, Nio founder William Ben Li is even called the “Elon Musk of China,” although there’s no indication that Nio’s founder is following Musk’s more eccentric ways.
While there’s no guarantee that designer clothes will help Nio vault past rivals like Tesla, Ford (NYSE:F) or the Warren Buffett-backed BYD Company, NIO is making inroads that cannot be ignored.
China Represents a Huge Opportunity
If you are looking for a growth story, there are few opportunities as compelling as the Chinese EV market.
China is one of the largest and fastest-growing emerging markets in the world. People made a big deal about China’s GDP falling below 7% in 2018 and 2019, but keep in mind that any other country would love growth that robust.
By comparison, GDP growth in the U.S. was 2.9% in 2018 and was 2.3% in 2019. Not surprisingly, experts expect China’s economy to overtake the U.S. sometime this decade.
And China is embracing electric vehicles like no other country. While the global automotive market continues to shrink, sales of electronic vehicles are on the rise.
True, the Chinese EV market took a hit in 2019 when Beijing reduced subsidies, helping send NIO stock down by 37%. But now China seems to be all-in on supporting the industry once again as it seeks to reduce dependence on foreign oil.
Beijing has stated its goal of increasing the share of electric vehicles from 5% to 25%. To do that, it extended new EV subsidies and tax breaks until the 2022 fiscal year. Meanwhile, anyone who buys an internal combustion vehicle in China will pay a 10% tax.
And China also put 2.7 billion yuan into battery charging infrastructure, which should make the decision to buy an electric vehicle a lot more appealing.
Before the pandemic, Nio’s two vehicles, the ES6 and the ES8, were selling well and there was a surge of demand in China for electric vehicles. That trend should return as China comes out of the pandemic.
NIO Stock at a Glance
While it has a market capitalization of more than $3 billion, Nio stock can be had for cheap. Currently priced at less than $4 per share, NIO is a long way from it’s all-time high of $10 set last year.
Year-to-date, Nio is down about 14% as the novel coronavirus pandemic weighed on the stock’s shares.
But the worst seems to be over. Li, in a call with reporters, said the pandemic will affect first-quarter numbers but the company is seeing a rebound in the second quarter. NIO won’t adjust its annual forecast, he said.
On May 6, the company reported that it delivered 3,155 vehicles in April, an increase of 105% from March and an 180% increase year-over-year.
Nio also seems to have solved its cash crunch. The company started 2020 with a cash balance of only $161.7 million, but it is getting an infusion of 7 billion yuan ($1 billion) from investors as part of a plan to establish the company’s China headquarters in Hefei.
The Bottom Line on NIO Stock
It’s impossible to size up NIO without considering the competitors. Tesla’s gigafactory in Shanghai makes 3,000 vehicles per week, just a year after the company broke ground.
Ford China launched its first China EV last year and has plans to introduce 10 new models over the next three years.
And then there’s Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B), which owns 25% BYD, a Chinese manufacturer of electric vehicles, solar panels, and rechargeable batteries. BYD and Toyota (NYSE:TM) announced plans to launch a joint venture this month for the EV business in China.
But NIO has a home field advantage that you can’t ignore. Instead of being supported by U.S. and Japanese companies, Nio is headquartered in Shanghai and is a Chinese company. And China always exercises extremely tight control over its markets, which makes it hard for international companies to compete.
For instance, China is expressing support for sales of vehicles with swappable batteries. Nio has pursued the technology, and even offers a free battery-swap service.
Nio is a solid bet for investors wanting to get in on the ground floor of the electric vehicle market in a country that is expected to overtake the U.S. soon.
NIO stock gets a “B” rating in my Portfolio Grader right now.
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>>> Electric Vehicles Buoyed by a Backlog and Fresh Air
It took a pandemic for some drivers to come around on pollution
Bloomberg
By Kyle Stock
April 16, 2020
https://www.bloomberg.com/news/articles/2020-04-16/electric-vehicles-buoyed-by-a-backlog-and-fresh-air?srnd=premium
As Covid-19 crunches car sales globally, a backlog of orders have helped electric vehicles maintain momentum in much of the world —better than gas-powered cars and trucks.
Even in March, as pandemic lockdowns swept the globe, sales of battery-powered vehicles—including plug-in hybrids—surged in France, Germany, the Netherlands, Sweden and the UK, according to a new report from Bloomberg New Energy Finance. The demand, however, is somewhat synthetic. European emissions targets will rise considerably this year and automakers who don’t meet them will face steep fines for the first time. Passenger cars in Europe are required to reduce carbon emissions by roughly one quarter compared with levels of two years ago—between 4% and 6% of cars sold in Europe this year will have to be battery-powered in order to hit the new CO2 targets.
Consequently, many brands have pushed electric vehicles more aggressively in recent months and held back some 2019 orders so that they would count towards 2020 mandates, according to BNEF analyst Colin McKerracher. Drivers in Europe’s three largest car markets — Germany, France and the UK — bought 46,052 electric vehicles as the pandemic deepened in March, almost double the amount in the year-earlier period.
As Bloomberg News reported on April 15, Volkswagen AG’s efforts to revive production outside China will start next week at its electric car factory in Zwickau, Germany. In a LinkedIn post the same day, VW CEO Herbert Diess stressed the importance of the ID.3 electric hatchback that will be made in Zwickau. “My new working week starts together with Thomas Ulbrich at the wheel of a Volkswagen ID.3—our most important project to meet the European CO2-targets in 2020 and 2021,'' Diess wrote.
The coronavirus has underscored the environmental damage of vehicle emissions. Covid-19 fatality rates have been linked to air quality. Sheltering restrictions and lockdowns have emptied once-busy streets and idled industrial factories, resulting in cleaner air in some of the world’s densest, dirtiest cities. In New York and other cities in the Northeastern U.S., NASA says air pollution has dropped by 30% in recent weeks. So politicians crafting aid packages to prop up their economies will likely focus on supporting green technology.
McKerracher says EV adoption rates could ultimately hold steady this year or even rise. “Longer term, I think the pressure to electrify road transport only rises from here,” McKerracher said. “People will be angry that action wasn’t taken sooner.”
The short-term picture, though, remains grim for the auto industry at large. Analysts are predicting a large decline in overall vehicle sales this year. In the U.S. alone, automakers should brace for the virus to gobble up $100 million to $300 million in 2020 revenue, according to Bloomberg Intelligence analyst Kevin Tynan. By comparison, the industry garnered $161 billion in sales in the second quarter of 2019.
In addition to rattled consumers, greener vehicles are coming up against some of the cheapest gas prices in years. As of mid-April, the average gallon of gas was selling for $1.83 in the U.S., 25% lower than prices just two months ago.
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>>> Aptiv PLC (APTV) designs, manufacturers, and sells vehicle components worldwide. The company provides electrical, electronic, and safety technology solutions to the automotive and commercial vehicle markets. It operates through two segment, Signal and Power Solutions, and Advanced Safety and User Experience. The Signal and Power Solutions segment designs, manufactures, and assembles vehicle's electrical architecture, including engineered component products, connectors, wiring assemblies and harnesses, cable management products, electrical centers, and hybrid high voltage and safety distribution systems. The Advanced Safety and User Experience segment provides critical components, systems integration, and software development for vehicle safety, security, comfort, and convenience, such as sensing and perception systems, electronic control units, multi-domain controllers, vehicle connectivity systems, application software, and autonomous driving technologies. The company was formerly known as Delphi Automotive PLC and changed its name to Aptiv PLC in December 2017. Aptiv PLC is headquartered in Dublin, Ireland.
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Apple Inc | AAPL | 3.87% |
NVIDIA Corp | NVDA | 3.81% |
Samsung Electronics Co Ltd | 005930.KS | 3.33% |
Intel Corp | INTC | 3.23% |
Alphabet Inc A | GOOGL | 3.15% |
Microsoft Corp | MSFT | 3.07% |
Qualcomm Inc | QCOM | 3.02% |
Toyota Motor Corp | 7203 | 3.00% |
Cisco Systems Inc | CSCO | 2.25% |
Tesla Inc | TSLA | 2.21% |
Name | Symbol | % Assets |
---|---|---|
Tesla Inc | TSLA | 4.51% |
Intel Corp | INTC | 4.49% |
NVIDIA Corp | NVDA | 4.45% |
Airbus SE | AIR.PA | 4.40% |
Alphabet Inc A | GOOGL | 4.26% |
Baidu Inc ADR | BIDU | 4.20% |
Siemens AG | SIE.DE | 4.11% |
Honda Motor Co Ltd | 7267 | 4.03% |
Daimler AG | DAI.DE | 3.96% |
Toyota Motor Corp | 7203 | 3.76% |
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Tesla Inc | TSLA | 3.88% |
Advanced Micro Devices Inc | AMD | 3.83% |
NVIDIA Corp | NVDA | 3.70% |
General Motors Co | GM | 3.59% |
Texas Instruments Inc | TXN | 3.57% |
Analog Devices Inc | ADI | 3.54% |
Alphabet Inc A | GOOGL | 3.48% |
Daimler AG | DAI.DE | 3.46% |
Volkswagen AG Participating Preferred | VOW3.DE | 3.45% |
Bayerische Motoren Werke AG | BMW.DE | 3.44% |
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Tesla Inc | TSLA | 3.30% |
Skyworks Solutions Inc | SWKS | 3.25% |
Ansys Inc | ANSS | 3.09% |
NVIDIA Corp | NVDA | 3.07% |
ON Semiconductor Corp | ON | 3.07% |
Lear Corp | LEA | 3.02% |
Tianneng Power International Ltd | 00819 | 3.01% |
Taiwan Semiconductor Manufacturing Co Ltd ADR | TSM.TW | 2.98% |
Autohome Inc ADR | ATHM | 2.94% |
Volvo AB B | VOLV B | 2.92% |
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---|---|---|
Tesla Inc | TSLA | 6.00% |
Apple Inc | AAPL | 4.40% |
Intel Corp | INTC | 4.35% |
Samsung Electronics Co Ltd | 005930.KS | 4.34% |
NVIDIA Corp | NVDA | 4.30% |
Alphabet Inc A | GOOGL | 4.15% |
Qualcomm Inc | QCOM | 3.94% |
Toyota Motor Corp | 7203 | 3.81% |
Siemens AG | SIE.DE | 3.72% |
Schneider Electric SE | SU.PA | 3.64% |
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China Molybdenum Co Ltd Class H | 03993 | 4.04% |
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Zhejiang Huayou Cobalt Co Ltd | 603799 | 3.78% |
Katanga Mining Ltd | KAT | 3.77% |
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Livent Corp | LTHM | 3.67% |
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PT Vale Indonesia Tbk | INCO | 3.44% |
Tianqi Lithium Industries Inc | 002466 | 3.20% |
First Quantum Minerals Ltd | FM.TO | 3.12% |
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Albemarle Corp | ALB | 19.24% |
Sociedad Quimica Y Minera De Chile SA ADR | SQM | 13.12% |
Tesla Inc | TSLA | 6.79% |
Varta AG | VAR1.DE | 6.06% |
GS Yuasa Corp | 6674 | 5.31% |
Livent Corp | LTHM | 5.22% |
EnerSys | ENS | 4.90% |
Panasonic Corp | 6752 | 4.82% |
Simplo Technology Co Ltd | 6121.TW | 4.78% |
Samsung SDI Co Ltd | 006400.KS | 4.68% |
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