We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
EV Roundup: Updates From Tesla (TSLA) and General Motors (GM) Create Buzz
Read MoreHide Full Article
Per the latest data from the China Passenger Car Association, the country’s electric vehicle (EV) manufacturers sold 455,000 units in March, up 122.4% year over year and 43.6% from February levels. New-energy vehicle (NEV) sales for February were badly affected by a shortfall of components and declined 24.1% from January levels. The scenario improved in March, with sales of new energy vehicles making up a quarter of total vehicle deliveries in China.
The industry watchdogs, however, are of the view that the momentum may be short lived amid lockdown in various cities in China, including the major manufacturing hub, Shanghai. Suspension of manufacturing facilities amid the rising COVID-19 cases and a shortage of microchips and semiconductors may also act as spoilers. Operations at EV King Tesla’s (TSLA - Free Report) Shanghai have been suspended since late March amid components shortage and lockdown restrictions. China-based EV maker NIO Inc. (NIO - Free Report) has also halted manufacturing in the country amid supply chain snafus. The impact of manufacturing halts and lockdown restrictions are likely to be felt in April NEV sales in the world’s largest auto market.
On the news front, Tesla grabbed the most attention with several key updates involving recall, price hike of Model 3 and the grand opening of the Austin gigafactory. U.S. auto biggie General Motors (GM - Free Report) was also a major highlight last week as it announced a $2-billion investment in Canada to step up the electrification game. Meanwhile, GM and Japan’s auto giant Honda (HMC - Free Report) also strengthened their ties to create new value for consumers and redefine the EV ownership experience. EV startup Rivian Automotive (RIVN - Free Report) also made it to the last week’s key news as it reported production and delivery numbers for first-quarter 2022.
Last Week’s Top Stories
1. Tesla recalled 127,785 vehicles in China over potential faults in semiconductor components that might lead to collisions per directions from the State Administration for Market Regulation. The affected cars were manufactured between January 2019 and January 2022. Out of the total number of units, 34,207 units were imported and 93,578 were made in China.
In another move, Tesla increased the price of the Tesla Model 3 in the United States. This would mark the third price hike for the model in around a month. This time, two NCM (high-nickel cathode)-powered versions of the Model 3 will experience a price jump, while the LFP-powered version’s price will remain stable. The new price of the Model 3 LR AWD now stands at $55,990, increasing from $54,4490. The Performance version will start at $62,990, up from $61,900. The base version of the Model 3 will remain unchanged at $46,990. It is assumed that the price hike is applicable only for vehicles that have NCM battery cells. Nickel prices increased 62% in the first few months of the year on account of the Russia-Ukraine conflict, which is probably driving the decision of price hike.
In a separate development, Tesla also started official production at the new Giga Texas plant in Austin. It is the country’s biggest factory by size. It will also produce the highest volume in the United States when fully ramped up and is looking to manufacture at least 500,000 vehicles annually by next year. Initially, TSLA will come up with Model Y hatchbacks, with the hard-edged Cybertruck pickup along with a new version of the Roadster sports car and Tesla Semi starting production next year. The plant will also produce the Optimus humanoid robot as early as next year.
2. General Motors announced that it will launch Canada's first full-scale commercial EV manufacturing hub at the CAMI automotive assembly plant in Ingersoll, Ontario, with production scheduled to begin by year-end. Additionally, GM would begin production of light-duty pickups and add a third shift in production at its assembly plant in Oshawa. For the transformation of the factories in Ingersoll and Oshawa, General Motors intends to invest more than $2 billion. To support GM in its Ingersoll and Oshawa efforts and facilitate research and development in the province, the Ontario and federal governments will each spend $259 million. The investment will empower the Ingersoll plant to become the company’s EV hub for its new all-electric commercial vehicle brand, BrightDrop, and function as the first full-scale EV production facility in Canada. Production of BrightDrop’s electric delivery vans would commence at the CAMI plant in December 2022. Meanwhile, Oshawa would become GM’s only facility to manufacture both heavy-duty and light-duty pickups.
In another update, General Motors seeks to deepen ties with Honda to co-develop a series of affordable EVs structured on a new global framework using advanced Ultium battery technology. The companies are focusing on mass production of EVs beginning in 2027, including compact crossover vehicles, the related segment being the largest in the world, with annual volumes of more than 13 million vehicles. The joint initiative will leverage both companies' technology, design and sourcing strategies. The partnership involves manufacturing an all-electric product for North America at a lower price than the upcoming Chevrolet Equinox EV.
3. NIO stated that it has suspended vehicle production due to a supply chain hiatus in various cities across the country caused by the pandemic. NIO’s factories, test sites and interactive centers are located in Shanghai, and the city is presently facing another onslaught of the virus. To curb the spread, Shanghai has re-imposed lockdown and restrictions, severely affecting every aspect of the supply chain.
NIO’s supplier partners in other cities like Jilin and Jiangsu have been halting production since March and are yet to recover. In light of this, NIO has postponed deliveries of EVs to customers and will jointly work with suppliers to clear the bottlenecks and restart operations as soon as possible. Nonetheless, chip concerns are not likely to abate anytime soon and are likely to induce lost revenues for the firm. Further, high prices of raw materials like aluminum and copper are expected to clip gross margins.
4. Rivian announced production details for the first quarter of 2022. During the January-March period, the EV maker produced 2,553 vehicles at its factory in Normal, IL and delivered 1,227 units during the same time frame. Despite 83,000 reservations at 2021-end, Rivian produced and delivered just 1,015 and 920 R1 models last year, respectively. While Rivian has already crossed 2021 production numbers, it still has a long way to go, considering its annual production guidance of 25,000 vehicles in 2022 across R1 and RCV platforms.
RIVN is currently focused on ramping up production at its plant in Normal, IL. Rivian anticipates capital expenditures for 2022 to be $2,600 million, driven by additional spending at the Normal plant to expand the total capacity to 200,000 units annually. The company is also initiating work on its second domestic manufacturing facility in Georgia.
Price Performance
The following table shows the price movement of some of the major EV players over the last week and six-month period.
Image Source: Zacks Investment Research
What’s Next in the Space?
Stay tuned for announcements of the upcoming EV models and any important updates from the red-hot industry.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
EV Roundup: Updates From Tesla (TSLA) and General Motors (GM) Create Buzz
Per the latest data from the China Passenger Car Association, the country’s electric vehicle (EV) manufacturers sold 455,000 units in March, up 122.4% year over year and 43.6% from February levels. New-energy vehicle (NEV) sales for February were badly affected by a shortfall of components and declined 24.1% from January levels. The scenario improved in March, with sales of new energy vehicles making up a quarter of total vehicle deliveries in China.
The industry watchdogs, however, are of the view that the momentum may be short lived amid lockdown in various cities in China, including the major manufacturing hub, Shanghai. Suspension of manufacturing facilities amid the rising COVID-19 cases and a shortage of microchips and semiconductors may also act as spoilers. Operations at EV King Tesla’s (TSLA - Free Report) Shanghai have been suspended since late March amid components shortage and lockdown restrictions. China-based EV maker NIO Inc. (NIO - Free Report) has also halted manufacturing in the country amid supply chain snafus. The impact of manufacturing halts and lockdown restrictions are likely to be felt in April NEV sales in the world’s largest auto market.
On the news front, Tesla grabbed the most attention with several key updates involving recall, price hike of Model 3 and the grand opening of the Austin gigafactory. U.S. auto biggie General Motors (GM - Free Report) was also a major highlight last week as it announced a $2-billion investment in Canada to step up the electrification game. Meanwhile, GM and Japan’s auto giant Honda (HMC - Free Report) also strengthened their ties to create new value for consumers and redefine the EV ownership experience. EV startup Rivian Automotive (RIVN - Free Report) also made it to the last week’s key news as it reported production and delivery numbers for first-quarter 2022.
Last Week’s Top Stories
1. Tesla recalled 127,785 vehicles in China over potential faults in semiconductor components that might lead to collisions per directions from the State Administration for Market Regulation. The affected cars were manufactured between January 2019 and January 2022. Out of the total number of units, 34,207 units were imported and 93,578 were made in China.
In another move, Tesla increased the price of the Tesla Model 3 in the United States. This would mark the third price hike for the model in around a month. This time, two NCM (high-nickel cathode)-powered versions of the Model 3 will experience a price jump, while the LFP-powered version’s price will remain stable. The new price of the Model 3 LR AWD now stands at $55,990, increasing from $54,4490. The Performance version will start at $62,990, up from $61,900. The base version of the Model 3 will remain unchanged at $46,990. It is assumed that the price hike is applicable only for vehicles that have NCM battery cells. Nickel prices increased 62% in the first few months of the year on account of the Russia-Ukraine conflict, which is probably driving the decision of price hike.
In a separate development, Tesla also started official production at the new Giga Texas plant in Austin. It is the country’s biggest factory by size. It will also produce the highest volume in the United States when fully ramped up and is looking to manufacture at least 500,000 vehicles annually by next year. Initially, TSLA will come up with Model Y hatchbacks, with the hard-edged Cybertruck pickup along with a new version of the Roadster sports car and Tesla Semi starting production next year. The plant will also produce the Optimus humanoid robot as early as next year.
Tesla currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. General Motors announced that it will launch Canada's first full-scale commercial EV manufacturing hub at the CAMI automotive assembly plant in Ingersoll, Ontario, with production scheduled to begin by year-end. Additionally, GM would begin production of light-duty pickups and add a third shift in production at its assembly plant in Oshawa. For the transformation of the factories in Ingersoll and Oshawa, General Motors intends to invest more than $2 billion. To support GM in its Ingersoll and Oshawa efforts and facilitate research and development in the province, the Ontario and federal governments will each spend $259 million. The investment will empower the Ingersoll plant to become the company’s EV hub for its new all-electric commercial vehicle brand, BrightDrop, and function as the first full-scale EV production facility in Canada. Production of BrightDrop’s electric delivery vans would commence at the CAMI plant in December 2022. Meanwhile, Oshawa would become GM’s only facility to manufacture both heavy-duty and light-duty pickups.
In another update, General Motors seeks to deepen ties with Honda to co-develop a series of affordable EVs structured on a new global framework using advanced Ultium battery technology. The companies are focusing on mass production of EVs beginning in 2027, including compact crossover vehicles, the related segment being the largest in the world, with annual volumes of more than 13 million vehicles. The joint initiative will leverage both companies' technology, design and sourcing strategies. The partnership involves manufacturing an all-electric product for North America at a lower price than the upcoming Chevrolet Equinox EV.
3. NIO stated that it has suspended vehicle production due to a supply chain hiatus in various cities across the country caused by the pandemic. NIO’s factories, test sites and interactive centers are located in Shanghai, and the city is presently facing another onslaught of the virus. To curb the spread, Shanghai has re-imposed lockdown and restrictions, severely affecting every aspect of the supply chain.
NIO’s supplier partners in other cities like Jilin and Jiangsu have been halting production since March and are yet to recover. In light of this, NIO has postponed deliveries of EVs to customers and will jointly work with suppliers to clear the bottlenecks and restart operations as soon as possible. Nonetheless, chip concerns are not likely to abate anytime soon and are likely to induce lost revenues for the firm. Further, high prices of raw materials like aluminum and copper are expected to clip gross margins.
4. Rivian announced production details for the first quarter of 2022. During the January-March period, the EV maker produced 2,553 vehicles at its factory in Normal, IL and delivered 1,227 units during the same time frame. Despite 83,000 reservations at 2021-end, Rivian produced and delivered just 1,015 and 920 R1 models last year, respectively. While Rivian has already crossed 2021 production numbers, it still has a long way to go, considering its annual production guidance of 25,000 vehicles in 2022 across R1 and RCV platforms.
RIVN is currently focused on ramping up production at its plant in Normal, IL. Rivian anticipates capital expenditures for 2022 to be $2,600 million, driven by additional spending at the Normal plant to expand the total capacity to 200,000 units annually. The company is also initiating work on its second domestic manufacturing facility in Georgia.
Price Performance
The following table shows the price movement of some of the major EV players over the last week and six-month period.
Image Source: Zacks Investment Research
What’s Next in the Space?
Stay tuned for announcements of the upcoming EV models and any important updates from the red-hot industry.