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EV Roundup: GM-TSLA Charging Deal, BWA's "Charging Forward: 2027" & More
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In a major development in the electric vehicle (EV) space last week, U.S. auto giant General Motors (GM - Free Report) announced plans to embrace EV behemoth Tesla’s (TSLA - Free Report) charging network. GM’s intention to adapt its EVs to make them compatible with Tesla’s vast Supercharger network seems to have shaken the dynamics of the EV charging landscape.
Auto equipment provider BorgWarner (BWA - Free Report) held its Investor Day last week, wherein it revealed its "Charging Forward: 2027" strategy. This plan aims to strengthen its position as an eProducts technology leader while leveraging its Foundational portfolio. BorgWarner also unveiled its brand-new logo, symbolizing a major leap forward in the company's exciting e-mobility transformation.
China-based EV maker NIO Inc. (NIO - Free Report) released weaker-than-expected first-quarter 2023 results last week. Lastly, EV startup Fisker Inc. plans to incorporate the sale of emission credits into its U.S. business strategy, having secured an agreement with a major automaker. Additionally, the company intends to expand into the Chinese market, with a delivery center set to open in 2023 and a production capacity of 75,000 Fisker Oceans annually projected for next year.
GM and BWA currently hold a Zacks Rank #1 (Strong Buy) and #2 (Buy), respectively. While TSLA and NIO carry a Zacks Rank #3 (Hold) each, FSR is #4 Ranked (Sell).
1. BorgWarner unveiled the next exciting chapter of its Charging Forward strategy, aimed at strengthening its position as a pioneering technology leader in eProducts. As part of its 2027 Charging project strategy, BorgWarner is focused on achieving substantial objectives. It aims eProducts revenues to exceed $10 billion by 2027, accounting for nearly 50% of its total sales. By leveraging economies of scale and expecting eProducts revenue growth to outpace research and development, the company aims to deliver approximately 7% margins and generate positive free cash flow within its eProducts portfolio by 2027.Concurrently, BorgWarner announced the revamp of its logo yesterday, its first logo change in more than three decades. It is a testament to BWA’s electric evolution and Charging Forward strategy.
BWA’s Charging Forward project to accelerate its electrification strategy is indeed proving to be a game-changer. Since launching its Charging Forward strategy in March 2021, BorgWarner has accomplished significant progress in attaining its targets. The company is making steady progress in ensuring that a minimum of 25% of its revenues are derived from battery electric vehicles (EVs) by 2025. Impressively, its organic EV bookings for 2025 have already surpassed the target of $2.5 billion, reaching $3 billion.
2. NIO incurred a loss per American Depositary Share (ADS) of 42 cents in the first quarter of 2023, wider than the Zacks Consensus Estimate of a loss of 22 cents. The reported loss is also wider than the year-ago loss of 18 cents due to lower vehicle margins and higher operating expenses, despite improved deliveries. The company posted revenues of $1,554.6 million, which lagged the Zacks Consensus Estimate of $1,692 million but rose 7.7% year over year on the back of robust deliveries.
The vehicle margin in the reported quarter declined to 5.1% from 18.1% in the first quarter of 2022. Cash and cash equivalents totaled $2,149.7 million as of Mar 31, 2023 and long-term debt was $1,224.9 million as of the same date. For the second quarter of 2023, NIO expects deliveries in the range of 23,000-25,000 vehicles, signaling a year-over-year decline of 8.2-0.2%. Revenues are envisioned between $1,273 million and $1,364 million, indicating a year-over-year decrease of 15.1-9%.
3. General Motors announced a collaboration with Tesla to integrate North American Charging Standard (NACS) plugs into its EVs starting in 2025. The collaboration will also provide GM EV users access to 12,000 Tesla Superchargers for charging their vehicles.This deal will make the transition to EVs seamless for GM’s customers and will help the industry move toward a single North American Charging Standard.
GM EV drivers will get access to the Tesla Supercharger Network starting in 2024 and will initially require an adaptor. Starting in 2025, the first GM EVs will be manufactured with a NACS inlet for direct access to Tesla Superchargers and will not require an adaptor. For NACS-enabled vehicles, GM will manufacture adaptors that will allow the vehicles to charge at CCS-capable stations. The legendary automaker will integrate the Tesla Supercharger Network into its vehicles and mobile apps to help EV owners quickly and easily locate, pay for and initiate charging at available Tesla Superchargers.
4. Fisker is gearing up to begin deliveries of its all-electric Fisker Ocean SUV in the United States this month. The Fisker Ocean Extreme has gained regulatory approval from both the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), enabling its sale and delivery in all 50 states and the District of Columbia. This certification also grants Fisker the ability to sell emission credits, bolstering its market position further.Fisker has already secured an agreement with a major automaker to sell these credits at competitive rates,
Looking beyond the U.S. market, Fisker has unveiled its ambitious plans to expand into China. With a delivery center slated to open in 2023 and the Fisker Ocean SUV hitting the Chinese market in the first quarter of 2024, the company is primed for substantial growth. Henrik Fisker, Chairman and CEO, expressed confidence in China's potential as a key EV growth market and expects significant demand for their vehicles. By establishing a local office and potential production capacity of 75,000 Fisker Oceans annually, Fisker aims to solidify its presence in this promising market.
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 upcoming EV models and any important updates from the red-hot industry.
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EV Roundup: GM-TSLA Charging Deal, BWA's "Charging Forward: 2027" & More
In a major development in the electric vehicle (EV) space last week, U.S. auto giant General Motors (GM - Free Report) announced plans to embrace EV behemoth Tesla’s (TSLA - Free Report) charging network. GM’s intention to adapt its EVs to make them compatible with Tesla’s vast Supercharger network seems to have shaken the dynamics of the EV charging landscape.
Auto equipment provider BorgWarner (BWA - Free Report) held its Investor Day last week, wherein it revealed its "Charging Forward: 2027" strategy. This plan aims to strengthen its position as an eProducts technology leader while leveraging its Foundational portfolio. BorgWarner also unveiled its brand-new logo, symbolizing a major leap forward in the company's exciting e-mobility transformation.
China-based EV maker NIO Inc. (NIO - Free Report) released weaker-than-expected first-quarter 2023 results last week. Lastly, EV startup Fisker Inc. plans to incorporate the sale of emission credits into its U.S. business strategy, having secured an agreement with a major automaker. Additionally, the company intends to expand into the Chinese market, with a delivery center set to open in 2023 and a production capacity of 75,000 Fisker Oceans annually projected for next year.
GM and BWA currently hold a Zacks Rank #1 (Strong Buy) and #2 (Buy), respectively. While TSLA and NIO carry a Zacks Rank #3 (Hold) each, FSR is #4 Ranked (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Last Week’s Top Stories
1. BorgWarner unveiled the next exciting chapter of its Charging Forward strategy, aimed at strengthening its position as a pioneering technology leader in eProducts. As part of its 2027 Charging project strategy, BorgWarner is focused on achieving substantial objectives. It aims eProducts revenues to exceed $10 billion by 2027, accounting for nearly 50% of its total sales. By leveraging economies of scale and expecting eProducts revenue growth to outpace research and development, the company aims to deliver approximately 7% margins and generate positive free cash flow within its eProducts portfolio by 2027.Concurrently, BorgWarner announced the revamp of its logo yesterday, its first logo change in more than three decades. It is a testament to BWA’s electric evolution and Charging Forward strategy.
BWA’s Charging Forward project to accelerate its electrification strategy is indeed proving to be a game-changer. Since launching its Charging Forward strategy in March 2021, BorgWarner has accomplished significant progress in attaining its targets. The company is making steady progress in ensuring that a minimum of 25% of its revenues are derived from battery electric vehicles (EVs) by 2025. Impressively, its organic EV bookings for 2025 have already surpassed the target of $2.5 billion, reaching $3 billion.
2. NIO incurred a loss per American Depositary Share (ADS) of 42 cents in the first quarter of 2023, wider than the Zacks Consensus Estimate of a loss of 22 cents. The reported loss is also wider than the year-ago loss of 18 cents due to lower vehicle margins and higher operating expenses, despite improved deliveries. The company posted revenues of $1,554.6 million, which lagged the Zacks Consensus Estimate of $1,692 million but rose 7.7% year over year on the back of robust deliveries.
The vehicle margin in the reported quarter declined to 5.1% from 18.1% in the first quarter of 2022. Cash and cash equivalents totaled $2,149.7 million as of Mar 31, 2023 and long-term debt was $1,224.9 million as of the same date. For the second quarter of 2023, NIO expects deliveries in the range of 23,000-25,000 vehicles, signaling a year-over-year decline of 8.2-0.2%. Revenues are envisioned between $1,273 million and $1,364 million, indicating a year-over-year decrease of 15.1-9%.
3. General Motors announced a collaboration with Tesla to integrate North American Charging Standard (NACS) plugs into its EVs starting in 2025. The collaboration will also provide GM EV users access to 12,000 Tesla Superchargers for charging their vehicles.This deal will make the transition to EVs seamless for GM’s customers and will help the industry move toward a single North American Charging Standard.
GM EV drivers will get access to the Tesla Supercharger Network starting in 2024 and will initially require an adaptor. Starting in 2025, the first GM EVs will be manufactured with a NACS inlet for direct access to Tesla Superchargers and will not require an adaptor. For NACS-enabled vehicles, GM will manufacture adaptors that will allow the vehicles to charge at CCS-capable stations. The legendary automaker will integrate the Tesla Supercharger Network into its vehicles and mobile apps to help EV owners quickly and easily locate, pay for and initiate charging at available Tesla Superchargers.
4. Fisker is gearing up to begin deliveries of its all-electric Fisker Ocean SUV in the United States this month. The Fisker Ocean Extreme has gained regulatory approval from both the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), enabling its sale and delivery in all 50 states and the District of Columbia. This certification also grants Fisker the ability to sell emission credits, bolstering its market position further.Fisker has already secured an agreement with a major automaker to sell these credits at competitive rates,
Looking beyond the U.S. market, Fisker has unveiled its ambitious plans to expand into China. With a delivery center slated to open in 2023 and the Fisker Ocean SUV hitting the Chinese market in the first quarter of 2024, the company is primed for substantial growth. Henrik Fisker, Chairman and CEO, expressed confidence in China's potential as a key EV growth market and expects significant demand for their vehicles. By establishing a local office and potential production capacity of 75,000 Fisker Oceans annually, Fisker aims to solidify its presence in this promising market.
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 upcoming EV models and any important updates from the red-hot industry.