What You Missed This Week in EVs and Clean Energy

Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.

From the hotly-debated high-flier Tesla (TSLA), Wall Street’s newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM (GM) and Ford (F) to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with “Charged,” a weekly recap of the top stories and expert calls in the sector.

SELL TESLA: On Friday, UBS downgraded Tesla to Sell from Neutral with a price target of $197, up from $147. The stock’s valuation premium has widened of late on artificial intelligence enthusiasm, the firm tells investors in a research note. UBS says that after going through the different businesses it can more substantially value, at current levels, it is still left with an over $500B “stub” for Tesla’s future growth. Even if giving that “stub” a five-year time horizon, that implies a five-year future value of $1 trillion. And this is just to justify current share levels, investors would need to see an even larger opportunity to justify a Buy rating, contends UBS. Citing the lack of visibility and the risk that Tesla’s growth opportunities materialize on a longer time horizon, or not at all, the firm downgrades the stock to Sell following the recent share rally.

NOT CHASING SHARES AFTER RALLY: Citi raised the firm’s price target on Tesla to $274 from $182, while keeping a Neutral rating on the shares. The firm has “been more constructive” on near-term investor sentiment around Tesla, but says the strong stock run-up adds greater reliance on looming electric vehicle product and artificial intelligence catalysts. The Q2 delivery beat was also “encouraging,” which prompts increased estimates and supports Citi’s underlying call for improving EV sentiment this summer, Citi tells investors in a research note. However, the firm believes core EV fundamentals alone are unlikely to support significantly further upside from here in Tesla shares absent new product and AI catalysts. “We’re not inclined to chase the stock here,” Citi contends.

ROBOTAXI UNVEILING DELAYED: Tesla is postponing its planned robotaxi unveiling from August to October in order to let teams working on the endeavor have more time to make additional vehicle prototypes, Bloomberg’s Dana Hull and Edward Ludlow report, citing people familiar with the matter. CEO Elon Musk established the August 8 date for the event months ago, and optimism about the unveiling has contributed to an 11-day run-up in Tesla stock, the authors note.

Click here to check out Tesla’s recent Media Buzz Sentiment as measured by TipRanks.

WORKFORCE REDUCTION: In a regulatory filing, SolarEdge (SDEG) CEO Zvi Lando issued a letter to all of its employees regarding certain workforce changes. The letter said, “Today we commenced a difficult organizational process. We need to part ways with wonderful people who have made considerable contributions to the Company over the years… The downturn of the market at the end of 2023 and beginning of 2024 had led to an accumulation of excess inventory in our distribution channels. We know that as inventory channels clear, our sales volumes are lower than the rate of installations and that this clearing process will take time. Our underlying business is also impacted by the current downturn in the solar industry, particularly in Europe where, as evident in market analysts’ reports, PV installation rates are increasing slower than expected and there is considerable uncertainty and variability between different European countries in terms of current business levels and outlook. In North America, we are beginning to see some slight growth in installation rates, and we continue to ramp up our US manufacturing capacity. This is a major opportunity both for SolarEdge and for our customers. In light of this prolonged situation, and the decline in revenues that we have experienced, we must take meaningful measures to ensure our financial stability and restore profitability. The main tools at our disposal are to reduce our cost structure, and become leaner and more efficient. The most significant and painful measure is a reduction in our workforce, which will impact approximately 400 employees, of which 200 are in Israel.”

BUY ARRY: Citi upgraded Array Technologies (ARRY) to Buy from Neutral with a price target of $14, down from $17. The shares are down over 40% this year, likely on fears of project pushouts, an unexpected CFO change, potential near-term margin pressure due to freight costs, and price declines, the firm tells investors in a research note. Citi believes investors are focused on very near-term challenges, while Array’s long-term growth story remains intact. The company should regain market share this year and exit 2024 with record backlog, says the firm.