Tesla’s Robotaxi Day will take place this Thursday, October 10
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MAKE OR BREAK:
Tesla was once the red-hot center of car innovation, but now it feels at risk of sinking into irrelevance as just another auto maker. Its coming Robotaxi Day may be Elon Musk’s last chance to convince investors that Tesla still has it, Al Root writes in this week’s edition of Barron’s. Ostensibly an event to highlight the self-driving technology that would allow the company to compete with the likes of Waymo and GM’s (GM) Cruise, Musk needs to convince investors that Tesla remains a hotbed of innovation and still deserves to be thought of as a tech company like Apple (AAPL), Amazon (AMZN), or Alphabet (GOOGL). The outcome could determine whether Tesla regains its place among the Magnificent Seven or is relegated to fighting it out with dozens of auto makers for EV market share, the author adds.
TESLA DELIVERIES:
Tesla reported Q3 deliveries of 462,890, with production at 469,796. The company stated, “In the third quarter, we produced approximately 470,000 vehicles, delivered approximately 463,000 vehicles and deployed 6.9 GWh of energy storage products.”
Commenting on the numbers, Barclays said it believes investors were likely expecting a more robust beat from Tesla’s Q3 production report. The 470,000 unit production is just above the consensus of 466,000 and the slight inventory build is in line with expectations, raising total inventory to 120,000 units, the firm tells investors in a research note. Barclays notes the deliveries miss appears to have been led by Model S, X and Cybertruck weakness.
Evercore ISI also commented on the news, calling Tesla’s Q3 deliveries of about 463,000 vehicles “a slight expectational disappointment” given “recently heightened” buyside forecasts at about 470,000 and the consensus call for 462,000 units. The firm, which sees Q3 EPS of 57c-59c about 15% gross margins, has an In Line rating on Tesla shares.
Meanwhile, Baird noted that Tesla Q3 deliveries slightly beat consensus and missed the firm’s estimate. Energy storage deployments were strong at 6.9 GWh, marking the second highest quarterly total in Tesla’s history. Baird expects deliveries to be a look-through event with attention quickly shifting to the robotaxi unveiling on Thursday, October 10th.
TACTICAL IDEAS LIST:
Wells Fargo added Tesla to the firm’s Q4 2024 Tactical Ideas List, keeping an Underweight rating on the shares with a price target of $120. Although anticipation is high for the Robotaxi, Wells remains skeptical. The firm continues to see delivery growth declines and diminished return on price cuts driving a 400bps year-over-year decline in 2024 auto gross margin ex credits.
Click here to check out Tesla’s recent Media Buzz Sentiment as measured by TipRanks.
PRODUCTION DISRUPTION:
Rivian is experiencing a production disruption due to a shortage of a shared component on the R1 and RCV platforms. This supply shortage impact began in Q3 of this year, has become more acute in recent weeks and continues. As a result of the supply shortage, Rivian is revising its annual production guidance to be between 47,000 and 49,000 vehicles. The company is also reaffirming its annual delivery outlook of low single digit growth as compared to 2023, which it expects to be in a range of 50,500 to 52,000 vehicles.
Rivian also announced production and delivery totals for the quarter ending September 30, 2024. The company produced 13,157 vehicles at its manufacturing facility in Normal, Illinois and delivered 10,018 vehicles during the same period.
DELIVERIES:
Lucid Group (LCID) announced production and delivery totals for the quarter ended September 30, 2024. During this period, Lucid produced 1,805 vehicles and delivered 2,781 vehicles, of which approximately 8% were subject to operating lease accounting.
XPeng (XPEV) also announced its vehicle delivery results for September and the third quarter 2024. In September, XPeng delivered 21,352 Smart EVs, a new record for monthly deliveries, representing increases of 39% year-over-year and 52% over the prior month. At the same time, the first month of deliveries of XPeng MONA M03 exceeded 10,000 units. For the first nine months of 2024, XPeng delivered 98,561 Smart EVs, a 21% increase from the same period last year. With a broad array of superior configurations and competitive pricing, XPeng MONA M03 has experienced a significant increase in orders since its market launch.
Meanwhile, Li Auto (LI) announced that it delivered 53,709 vehicles in September, up 48.9% year over year. This brought the company’s third-quarter deliveries to 152,831, increasing by 45.4% year over year. As of September 30, 2024, Li Auto had delivered a total of 341,812 vehicles in 2024, with cumulative deliveries reaching 975,176.
Additionally, Nio (NIO) said it delivered 21,181 vehicles in September, representing an increase of 35.4% year-over-year. The deliveries consisted of 20,349 vehicles from the company’s smart electric vehicle brand Nio, and 832 vehicles from the company’s family-oriented smart electric vehicle brand Onvo. The company delivered 61,855 vehicles in the third quarter, a new quarterly record representing an increase of 11.6% year-over-year. Cumulative deliveries reached 598,875 as of September 30.
MOVING TO THE SIDELINES:
Macquarie downgraded Li Auto. The firm sees limited near-term catalysts. Following the strong recent share performance, Li’s valuation is now full, and the stock lacks a clear catalyst with no new models in the second half of 2024, Macquarie tells investors in a research note. The firm awaits further details of the new SUV launches in 2025.
SELL CHARGEPOINT:
JPMorgan double downgraded ChargePoint (CHPT) without a price target. The firm expects ChargePoint will continue underperforming charging peers due to its dependence on a rebound in electric vehicle adoption. Commercial customers have slowed discretionary charger purchases and fleet customers remain vehicle-constrained, JPMorgan tells investors in a research note. The firm believes investor sentiment remains negative given concerns around ChargePoint’s ability to demonstrate a sustainable profitability model that is not reliant only on cost savings from offshoring manufacturing to Asia. It notes ChargePoint’s 2024 profitability target has already been delayed due to lack of visibility.
DOE LOAN:
EVgo (EVGO) announced that it has received a conditional commitment for a loan guarantee of up to $1.05B of debt financing, from the U.S. Department of Energy, or DOE, Loan Programs Office under its Title 17 program to accelerate expansion of its fast-charging network in community locations across the U.S. The financing would accelerate EVgo’s efforts to scale its charging footprint and increase nationwide access to public charging stations. Access to this low-cost financing will facilitate the build out of approximately 7,500 additional fast charging stalls across the U.S., with the top state markets anticipated to be Arizona, California, Florida, Georgia, Illinois, Michigan, New Jersey, New York, Pennsylvania and Texas.
If finalized, EVgo expects to complete the deployment of the new stalls by 2030. In alignment with the Biden-Harris administration’s Justice40 initiative, over 40% of stalls to be built pursuant to the financing, if finalized, are anticipated to be in marginalized areas that have been overburdened by environmental impacts. EVgo also plans to leverage the 30C tax credit, which was expanded as part of the Inflation Reduction Act and supports the buildout of public EV charging infrastructure with a focus on driving investment to rural and lower-income communities.
Meanwhile, JPMorgan upgraded EVgo. The firm also placed the shares on “Positive Catalyst Watch.” Unlike its hardware and software peers, EVgo’s fast charging owner-operator model has been scaling well with higher utilization and charge rates in the “current muted” electric vehicle environment, JPMorgan tells investors in a research note. The firm expects the combination of steady network throughput growth, flat to modestly improving gross margins, and better operating leverage to turn the company to breakeven adjusted EBITDA exiting 2025 and growing from there. JPMorgan says a likely conditional loan commitment from the Department of Energy’s Loan Programs Office in the range of several hundreds of millions, expected by year-end, which will accelerate EVgo’s pace of network buildout.
TD Cowen also upgraded EVgo, after the company received a conditional commitment for up to $1.05B of debt financing from the DOE under its Title 17 program to support the rollout of the company’s charging network. This financing removes the capital overhang and supports an accelerated runaway through 2030, the firm tells investors.
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Originally Posted October 7, 2024 – Charged: All eyes on Tesla ahead of Robotaxi event
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