Apple Self-Driving EV Said To Be Years Away

Welcome to The Fly's latest edition of "Charged," where we look at some analysts' notes, news and activity in the electric vehicle and clean energy space.


Apple (AAPL) will take at least half a decade to launch an autonomous, electric vehicle because development work is still at an early stage, Bloomberg's Mark Gurman reported on Thursday, citing people familiar with the matter. The technology giant has a small team of hardware engineers developing drive systems, vehicle interior and external car body designs with the goal of eventually shipping a vehicle, the author noted. That’s a more ambitious goal than in previous years when the project mostly focused on creating an underlying self-driving system, Gurman added. The company has also added more ex-Tesla (TSLA) executives to the project.


On Thursday, RBC Capital analyst Joseph Spak upgraded Tesla to Sector Perform from Underperform with a price target of $700, up from $339. The analyst admitted to getting Tesla shares "completely wrong" with a new framework that re-evaluates the company's place in the industry, its growth opportunity, and its inexpensive access to capital. Spak also amended his 2025 deliveries forecast to 1.7M or a 28% 5-year unit CAGR versus his prior view of 1.3M to reflect Tesla's capacity additions and BEV share assumption.

On Friday, Evercore ISI analyst Chris McNally upgraded Tesla to In Line from Underperform with a $650 price target. Acknowledging the firm has "been on the considerably wrong side of TSLA for over a year now," McNally said the new rating more accurately reflects "how we typically discuss the stock." He previously struggled in analysis of Tesla since he viewed it as a "growth + premium Auto" company, but he believes tech/retail investors see Tesla as two separate tech companies - one company that is the market leader in electric vehicles and also an "optionality/amalgamation of multiple adjacent call options" on everything from full self-driving to storage to battery and powertrain tech, McNally said.

Earlier in the week, Exane BNP Paribas analyst Stuart Pearson downgraded Tesla to Underperform from Neutral with a price target of $340, down from $385. The analyst argued that Tesla no longer has the benefit of operating in a "vacuum of competition." With possible competition from Waymo, Didi, Baidu (BIDU) and even Apple, "we would not want to hold this stock the day the tech titans lay out their BEV/robotaxi plans," Pearson said. The analyst also pointed out that Tesla's 20M long-term volume target will require it to nearly triple its market share in the electric vehicle market while facing a host of new competition. If Tesla succeeds, the "rewards could be great," but the risk that it sacrifices price for volume, or that its battery technology fails or is superseded by solid-state batteries, is real, Pearson cautioned.


Earlier this week, Credit Suisse analyst Bin Wang upgraded Li Auto (LI) to Outperform from Neutral with a price target of $40, up from $33, after the company's December delivery volume grew 32% month-over-month to a new high of 6,126 units. Management also guided to new order flow continuing to increase in January despite the introduction of Tesla's low-priced China-made Model Y, noted Wang. The analyst, who noted the better than expected sales momentum, also said that Li has introduced a "clear and ambitious plan" for upgrading its autonomous driving ADAS hardware and set-up.

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