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Electric vehicle checkpoint: Jim Cramer on Lordstown losses, Ford momentum

Electric vehicle checkpoint: Jim Cramer on Lordstown losses, Ford momentum
Business
Lordstown Motors (RIDE) recovered from earlier losses to end almost unchanged Wednesday after the maker of electric trucks said in a regulatory filing that it didn’t have enough cash on hand to build vehicles at scale and sell them, and that “these conditions raise substantial doubt regarding our ability to continue as a going concern.”

The shares slumped more than 16 per cent on Tuesday.

“The Company’s ability to continue as a going concern is dependent on its ability to complete the development of its electric vehicles, obtain regulatory approval, begin commercial-scale production and launch the sale of such vehicles,” Lordstown said in filings with the Securities and Exchange Commission. “The Company believes that its current level of cash and cash equivalents are not sufficient to fund commercial-scale production and the launch of the sale of such vehicles.”

When the company reported a wider-than-expected first-quarter loss in May it also said 2021 production of its Endurance truck would be half prior expectations.

TheStreet’s Jim Cramer said: “I had the Lordstown CEO on Mad Money and he was talking about how he had orders in the pipeline, but it turns out that he had letters of interest for orders, which shouldn’t be confused with actual orders. I’m sorry — just don’t talk about it then.”

“There were some very ill-advised comments that he made to get people in the stock. He should have just said ‘we haven’t sold a car, but I think our car is going to be great,’ like what Fisker did,” Cramer added.

Sports-car icon Ferrari (RACE) named Benedetto Vigna, an executive at STMicroelectronics (STM), Europe’s largest semiconductor maker, to the post of chief executive.

Vigna’s “deep understanding of the technologies driving much of the change in our industry, and his proven innovation, business-building and leadership skills, will further strengthen Ferrari,” Ferrari Chairman John Elkann said.

Analysts at UBS were bullish on the move as the company looks to bolster its tech ahead of a possible showdown with the American electric vehicle maker Tesla (TSLA).

Tesla CEO Elon Musk announced, on Twitter, that Tesla has pulled the plug on the Model S Plaid+. Musk said the Plaid+, which was marketed with a driving range of 520 miles, is now unnecessary given that the Model S Plaid is “just so good.” It will be unveiled at a media event on June 10.

Musk, one of the 25 richest Americans, managed to pay zero income tax in at least one year of the past 15, ProPublica reported, citing detailed data it analyzed from unnamed sources.

“Long-term, I’ve had concerns about when Ford (F), General Motors (GM,) and others really pushed into the EV market and we’re starting to see that happen now in 2021. And, I think it’s only going to accelerate. But we also know that we are going to continue to see chip constraints really plague the auto manufacturers, which don’t see the issue resolved until 2022 or maybe 2023,” Versace said.

“And, over the weekend, there was a report that Tesla’s business in China was roughly half in May, which comes on the back of companies like NIO (NIO) and Xpeng (XPEV) continue to report year-over-year shipping growth in May. So, there’s a lot of challenges that I think are hitting Tesla now in the competitive EV landscape where they had an early advantage in the past,” he added.

Cramer also likes Ford and is considering buying the new 2022 Ford Maverick for his daughter. “Ford’s got some real products and I think that Jim Farley has said ‘Elon Musk, I’m gonna crush you,” he said.

Tesla

Tesla (TSLA) shares ended Tuesday down 0.80 per cent at $598.78 after the clean energy carmaker saw a surge in China sales that eased concerns of near-term weakness in the world’s biggest automotive market.

Tesla sold 33,463 Shanghai-made cars in the country last month, data from the China Passenger Car Association (CPCA) indicated Tuesday, up 29 per cent from the April tally and more than three times ahead of last year’s pandemic-hit total of just over 11,000.

Jerome Guillen, president of Tesla’s heavy trucking division and the executive in charge of the company’s Semi electric trucks, has left the company after nearly 11 years. Musk often has credited Guillen for his significant contributions to the Tesla Semi, which is expected to launch this year.

Ford

Promising “the best of both worlds,” Ford (F) unveiled its new 2022 Maverick compact pickup truck Tuesday with a standard hybrid engine and a roughly $20,000 price tag.

Ford said the Maverick comes with a standard 1,500-pound (6,800-kilo) payload capacity and 2,000-pound base towing capacity. And, the hybrid vehicle will get 40 miles per gallon in the city. A gasoline-powered engine will be sold as an option.

The Maverick follows last month’s debut of Ford’s F-150 Lightning, which is at the forefront of the company’s $30 billion global electric vehicle plan.

Last week, Ford said that May’s electrified vehicle sales nearly tripled and total sales climbed 4.1 per cent. The automaker’s shares surged recently after JPMorgan analyst Ryan Brinkman lifted his price target on Ford by $2, to $18 a share while maintaining his overweight rating.

General Motors

General Motors (GM) jumped this past week after the carmaker said it expected first-half earnings to be “significantly better” than previous forecasts as semiconductor shipments improve and plants around the country return to full capacity.

The company gained 0.43 per cent on the strength of a $5 price target boost, to $70 per share, from Daiwa Capital Markets.

GM said it was accelerating the production of large and medium-sized pickups in the U.S.

Nikola

Electric truck maker Nikola (NKLA) posted better-than-expected first-quarter results. The company said that during the first quarter, it commissioned the first batch of five Nikola Tre battery-electric vehicles.

Last month, Nikola unveiled plans with Iveco and OGE to transport hydrogen from production sources to fuelling stations that support fuel-cell elective vehicles. And this past week, the company said Total Transportation Services, one of Southern California’s most prominent port trucking companies, signed a letter of intent to order 100 Class 8 battery and fuel-cell electric semi-trucks.
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