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'S PASSENGER VEHICLE

Shares of Apple (AAPL) were in the spotlight on Tuesday following a report from Reuters claiming that the company is moving forward with its self-driving car technology and is aiming at 2024 to launch a passenger vehicle that would include its own battery technology.

Following the news report, Morgan Stanley analyst Adam Jonas told investors that it has "long been the auto and tech hardware teams' collective working assumption" that Apple will design and engineer a car one day. The firm's teams have also "long felt" that tech players like Apple "represent far more formidable competition" potentially for Tesla than the legacy automakers, Jonas said. Monday's story on Apple and its "Project Titan," after a period when such stories have remained "relatively dormant," are a reminder of the potential scope of competition for capital, talent, and eventually market share with the EV arms race still in the early stages, Jonas added.

In a research note a few days later, Jonas added that he views the report that Apple may plan to introduce an electric vehicle as soon as 2024 as "one of the biggest 'moments' in the autos and shared mobility industry in 2020" as well as being "perhaps the most credible/formidable bear case for Tesla's (TSLA) stock that investors have had to consider for some time." While a company with Apple's resources entering the market could represent a significant inflection in the speed and magnitude of a wide range of investments in the auto space and be a "new autos bull case," it could also amount to an "old autos bear case" as legacy automakers like General Motors (GM) and Ford (F) will only face a more difficult competitive road in EVs "if Apple were to really throw its weight around and intensify competition," added Jonas.

Also commenting on the news, Citi analyst Jim Suva said he is "very skeptical" that Apple will actually produce a car. Auto sector profitability is "much lower," so the outcome of this is likely a further push by Apple of its operating system into consumer and enterprise markets, Suva told investors in a research note of his own. As far as the read-through to auto suppliers, Citi believes Apple's plans could lead to greater content opportunities for exposed suppliers, Aptiv (APTV), Magna (MGA) and Veoneer (VNE).

In terms of a manufacturing partner, Magna seems best positioned, and the article does mention past Apple-Magna talks, Citi analysts noted. While they regard this as a positive headline for Magna, they wouldn't be surprised if some traditional automakers also sought to partner with Apple where excess capacity is available. For the time being, Tesla will likely be viewed as the most direct competitor to an Apple car, Citi added. General Motors and Ford might initially be somewhat less competitively exposed since full-size pickup trucks and SUVs make up the vast majority of their profits, Citi's analysts argued.

Meanwhile, Tesla CEO Elon Musk said via Twitter that, "During the darkest days of the Model 3 program, I reached out to Tim Cook to discuss the possibility of Apple acquiring Tesla (for 1/10 of our current value). He refused to take the meeting."

On Monday, JMP Securities analyst Joseph Osha raised the firm's price target on Tesla to $788 from $516 as he raised his 2025 unit delivery target for the company to 3.05M from 2.5M previously given that he now thinks total battery electric vehicle shipments in 2025 could make up 15.7% of global vehicle sales, which is up from his prior 14% assumption. The analyst, who kept an Outperform rating on Tesla shares, compares the company to "other category-killer manufacturers" like Apple and Nvidia (NVDA). Osha estimates Tesla should be able to control about 45% of the addressable BEV market, excluding about 70% of China's EV sales, which would be down from 54% currently, he noted.

GM TO PREVIEW ELECTRIFICATION DRIVE

General Motors CEO Mary Barra plans to provide a peek of upcoming electric vehicles at CES next month and bolster the automaker's credentials as a rising power in EVs, Bloomberg's David Welch reported, citing people familiar with the matter. Barra is expected to explain how electrification is a necessary step to address environmental and societal change - and how GM is ready to play a central role, sources said. In addition to Barra's address, GM will show a video at CES featuring its latest technology and preview some concept vehicles, including a plug-in Chevrolet pick-up, some Cadillac models and vehicles for other brands, the people added.

BUY LORDSTOWN

R.F. Lafferty analyst Jaime Perez initiated coverage of Lordstown Motors (RIDE) with a Buy rating and $35 price target earlier this week. Lordstown's Endurance EV pickup truck is scheduled to begin production during the second half of 2021 and the company revealed it has received over 80,000 non-binding pre-orders as of December 22, noted Perez, who estimates the company can grow revenue to $1.57B in 2023.

'ANOTHER SETBACK'

While cancellation of Nikola's (NKLA) agreement with Republic Services is not significant in terms of overall volume for the company's battery electric vehicle line, it is a negative headline as Republic was to be Nikola's launch vehicle for the battery electric line in 2022, Loop Capital analyst Jeffrey Kauffman told investors in a research note. However, management noted that this customer win was not in the prior guidance and that they expect to announce new customer orders in early 2021, added the analyst. "While understandable, this represents another setback in a series of setbacks as of late" for Nikola, said Kauffman in a note titled "Two Steps Forward, One Step Back." He kept a Buy rating on Nikola with a $35 price target.

ITC EXTENSION

On Thursday, Roth Capital analyst Philip Shen raised the firm's price target on Enphase Energy (EPNH) to $220 from $160, while keeping a Buy rating on the shares. The analyst cited the passage of the ITC extension by Congress with a veto-proof majority. While the Trump administration has introduced some uncertainty, he believes the two-year extension will ultimately get done, thereby supporting a higher level of demand over the medium-term.

On Monday, Shen had noted that his prior checks suggested the ITC would likely be extended by two years at 26%, which is better than the market expected. The analyst believes refundability is likely not included and the placed-in-service dates should be moved along with the two-year extension. As for the PTC, Shen thinks it should be extended by one year at either the 60% or 40%. Other publicly traded companies in the sustainability space include Array Technologies (ARRY), Broadwind (BWEN), Canadian Solar (CSIQ), Daqo New Energy (DQ), First Solar (FSLR), Generac (GNRC), Hannon Armstrong (HASI), JinkoSolar (JKS), Sunnova Energy (NOVA), Sunrun (RUN), SolarEdge (SEDG), SunPower (SPWR), Sunworks (SUNW), and TPI Composites (TPIC).

MARGIN POTENTIAL

Morgan Stanley analyst Stephen Byrd raised the firm's price target on Plug Power (PLUG) to $38 from $14.50 this week, while keeping an Overweight rating on the shares following a deep dive into the company's longer-term addressable markets and margin potential. His valuation approach now includes longer-term decade-plus revenue and margin growth, explained Byrd, who argued that Plug's core forklift product offers its warehouse and logistics customers significant savings.

BIG FISH, IRON SOLAR SALE

Canadian Solar announced the sale of the remaining 30% ownership of the Big Fish SPV and Iron SPV solar projects to Falck Renewables. Both projects are located in Sicily, Italy, and have a total expected capacity of more than 290 MWp. The Company expects to recognize revenues from the sale in the Q4. Canadian Solar partnered with Falck Renewables back in 2019 to jointly develop the Big Fish and Iron projects, selling 70% ownership of the projects to Falck Renewables.