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.

RESULTS: Shares of Tesla were under pressure last Wednesday following the company’s mixed second quarter results, with the EV maker reporting a 45% drop in profit amid sluggish sales. Following the results, both Cantor Fitzgerald and New Street downgraded the stock to Neutral-equivalent ratings.

New Street downgraded Tesla to Neutral from Buy with a $225 price target following the Q2 report. The company’s deliveries recovered “at a cost,” increasing by 15% quarter-over-quarter, but with gross margins, excluding credits and leasing, down 1.7 points. The firm says that while Tesla’s auto margins will eventually recover, for now demand will remain challenging, “making little room for price stabilization.” With the stock at the target price, and trading 50-times its 2026 estimate, New Street sees limited valuation upside, and limited material positive estimate revisions. The firm cites margins taking time to recover and a lack of near-term share catalysts for the downgrade.

Meanwhile, Cantor Fitzgerald also downgraded Tesla to Neutral from Overweight with a price target of $245, up from $230. The firm cites valuation for the downgrade following the Q2 report. The shares are up over 70% in the last three months, and Cantor is “becoming a bit more conservative on valuation in the near-term,” the firm tells investors in a research note. Cantor says Tesla’s results were in-line with the Robo-taxi unveil coming on October 10 and affordable models remaining on track for the first half of 2025.

SELL TESLA: Phillip Securities downgraded Tesla to Sell from Reduce with a price target of $135, down from $145. The firm reduced estimates to reflect margin headwinds due to soft pricing and European Union tariffs on China exports. Lower volume, pricing, and EU tariffs are expected to weigh on Tesla’s near-term margins, Philip Securities tells investors in a research note. The firm says management spent almost no time on the Q2 earnings dispelling concerns over its stalling auto business, rather focusing most of the earnings call on “lofty plans” like Robo-taxi and Optimus, which are still at least 3-5 years away from contributing meaningfully to growth.

TOP PICK: On Monday, Morgan Stanley made Tesla its new “Top Pick” in U.S. Autos, replacing Ford. The firm cites 40% upside to its $310 price target, “more managed” expectations on autos and powerful emerging drivers of firm value. Morgan Stanley, which keeps an Overweight rating on Tesla shares, adds however, that it believes near-term expectations around FSD and Robo-taxi may be too high.

‘REVOLUTIONARY’ FSD UPDATE: Piper Sandler thinks investors “have grown accustomed to ignoring Tesla’s hyperbole” around full self-driving. However, judging by reviews on X, Tesla’s update to version 12.5 is “revolutionary,” the firm tells investors in a research note. Piper thinks investors should consider the possibility that Tesla’s decision to host a robo-taxi event October 10 “isn’t a ploy to distract from falling EV sales.” Rather, it could catalyze a realization that full self-driving matters more than anything else for Tesla, contends the firm. Piper expects self-driving take-rates to “inflect sharply upward” starting around 2030, and that by the end of its 20-year forecasting period, and expects 100% fleet-wide FSD adoption for Tesla. It further expects FSD subscription prices to eventually rise from $99 per month to over $500. Tesla will eventually sell electric vehicles for $31,000 apiece at 0% gross margin, but ultimately, “just like cheap flip-phones, we don’t think anyone will buy non-FSD cars,” Piper writes. The firm tells investors to Buy Tesla shares and keeps an Overweight rating on the name with a $300 price target.

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

MOVING TO SIDELINES ON GM: Morgan Stanley downgraded General Motors to Equal Weight from Overweight with a price target of $47, up from $46. GM’s improved capital discipline and execution has driven $10 of EPS, making it the best performing major auto OEM year-to-date and discounting the upside to the firm’s raised target, says the firm, which cites industry price pressure, EV and China risks as well as what it sees as a balanced risk/reward for its downgrade.

RED FLAG: Wolfe Research downgraded NextEra Energy Partners (NEP) to Peer Perform from Outperform without a price target. Management stating the 6% distribution growth remains “for now” was a red flag, the firm tells investors in a research note. Wolfe Research says that with NextEra Energy Partners yielding 13% today and no obvious solutions for the convertible equity portfolio financing overhang, it sees a distribution cut as increasingly likely.