Electric Vehicle checkpoint: Tesla, NIO, Ford cite supply costs as challenge
|Toronto Star 03 Jun 2021 at 16:56|
Electric vehicle giant Tesla (TSLA) increased the price of its vehicles in April, which obviously did not sit well with its customers.
A Twitter (TWTR) user by the name of Ryan recently complained about the price hike, and surprisingly, Tesla CEO Elon Musk responded, blaming it the increase in prices on raw materials.
“Prices increasing due to major supply chain price pressure industry-wide. Raw materials especially,” Musk tweeted.
At the same time, the Chinese electric vehicle company NIO (NIO) came out with reported May sales that fell 5 per cent month-over-month, and cited the auto semiconductor chip shortage as a primary reason.
“The new Ford leadership team has really changed the narrative around the company. It used to be a dinosaur in the space, but instead, now they’ve unleashed some very exciting EV products such as the Ford F-150 Lightning, which had over 70,000 preorders as of last week, and the E-Transit Van launching later this year,” Marks added.
Meanwhile, Ford is proving its profitability and the company said that they see EV and connected services as a $20-billion opportunity by 2030 as we move into the future.
“I like a lot about what Ford’s doing and I think it’s still very cheap when you’re looking at it on an earnings basis, especially compared to a Tesla, so we’ve been big believers in Ford and it’s the largest position that we own at ActionsAlertsPLUS,” said Marks.
Electric vehicle startup Rivian has reportedly chosen underwriters for an initial public offering that could come this year. Rivian is working with advisers including Goldman Sachs (GS) , JPMorgan Chase (JPM,) and Morgan Stanley (MS) , Bloomberg reported.
Rivian could seek a valuation of about $70 billion when it goes public, people familiar with the matter told Bloomberg. Although no final decision has been made and the details of its potential listing could change, Rivian was valued at $27.6 billion in January when the company said it secured another $2.65 billion in funding from investors including asset manager T. Rowe Price Associates (TROW) .
In February,, Amazon (AMZN) started to test a fleet of Rivian electric-powered vans in Los Angeles. The move came a year after the tech and online retail giant bought 100,000 of the custom delivery vehicles.
Tesla (TSLA) will recall nearly 6,000 U.S. vehicles because brake caliper bolts could be loose, potentially causing a loss of tire pressure. According to a filing with the National Highway Traffic Safety Administration made public on Wednesday, Tesla is recalling certain 2019-2021 Model 3 vehicles and 2020-2021 Model Y vehicles.
The recall is not the first for Tesla this year. The electric vehicle maker in February recalled 135,000 Model S luxury sedans and Model X sport-utility vehicles because of touch-screen failures. In addition, German motor authorities in February asked Tesla to recall around 12,300 Model X cars due to what it described as “limited functionality” of the adhesive on a “trim strip.”
Ford (F) shifted into high gear after the car company, looking to take on Tesla in electrifying its fleet as soon as possible, was upgraded this past week by analyst Joseph Spak to outperform from sector perform.
The RBC analyst said the stock is “still not overly expensive.”
Earlier this month, Ford unveiled the F-150 Lightning, an all-electric pickup, at a starting price below $40,000. It is at the forefront of the company’s $22-billion global electric vehicle plan.
General Motors (GM) shares extended gains this past week after the automaker said it will restart production at some of its North American plants that were idled as a result of the global semiconductor shortage.
GM will resume activity at two plants in Mexico, one in the United States and one in Canada this week following a move to shut them down amid the worst of the global chip shortage, which the carmaker said would ding its 2021 operating profit by as much as $2 million. A fifth facility in South Korea will be back online later this month.
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.
NIO (NIO) jumped after the Chinese electric vehicle maker reported a year-over-year increase in deliveries of more than 95 per cent for the month of May.
NIO delivered 6,711 vehicles in the month, and has delivered 109,514 vehicles year-to-date. Citi analyst Jeff Chung upgraded the stock to buy from neutral and raised his price target to $58.30 from $57.60.