Charged: GM Begins To Ship GMC Hummer EV, Musk Sells More Tesla Stock

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, Wall Street's newest darling Rivian, traditional-stalwarts turned EV-upstarts GM and Ford 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.

STOCK SALE: 

In a regulatory filing last Thursday, Tesla (TSLA) disclosed that its CEO Elon Musk sold $884M in common stock on December 16th after exercising option for 2.15M shares. In a previous In a regulatory filing earlier last week, Tesla had also disclosed that its Musk had sold $906M in common stock after exercising option for 2.13M shares.

Meanwhile, Tesla's court battle with Rivian Automotive (RIVN) over claims of talent poaching and technology theft received new deadlines from a California judge, Bloomberg's Peter Blumberg reported, citing a tentative court order. Tesla has 30 days to produce all documents it alleges were stolen by several former staff members who defected to its smaller competitor and following that disclosure, Rivian will have 30 days to respond to Tesla's requests for pretrial information sharing.

UPSIDE 'DIFFICULT TO JUSTIFY': 

On December 20, Guggenheim analyst Ali Faghri initiated coverage of Tesla with a Neutral rating and sees a fair value of approximately $924 per share, given the analysts bull case upside to $1,963 per share and bear case downside to $350 per share. With demand outpacing supply, Faghri sees visibility to volume upside in 2022 and 2023 and views Tesla as having a favorable near-term setup, but argues that upside from current prices is "difficult to justify" despite near- and intermediate-term estimates that the analyst notes are "well above consensus."

Faghri also started coverage of Lucid Group (LCID) with a Neutral rating and sees a fair value of approximately $38 per share, given the analyst's view on bull case upside to $83 per share and bear case downside to $12 per share. Lucid has "best-in-class" EV technology and product, as well as a vertical integration and clean-sheet strategy that will support higher margins with scale, optimized production and capital efficiency, and better product quality, but Faghri also sees near-term "narrative risks," including volume downside in the fourth quarter and fiscal 2022 due to challenges scaling production. Though the analyst is giving Lucid a premium multiple that is a 30% discount to Tesla's and credit for exceeding 2025 targets, the fair value estimate supports a Neutral rating.

FIRST DELIVERIES:

 Last week, General Motors (GM) announced the first deliveries of its first next-generation electric vehicles, the GMC HUMMER EV Edition 1 Pickup and BrightDrop EV600 light commercial vehicle, both built on the Ultium Platform. "This is the first chapter for Ultium - and for GM's transition to a zero-emissions future. Both commercial and retail customers will benefit from the EV experience, from exhilarating acceleration to low cost of operation, versatility, and ability to customize after the sale. GM is ideally positioned to provide EVs for every customer in every segment, retail or commercial," said GM President Mark Reuss. GM's next Ultium-based vehicle, the Cadillac LYRIQ, is expected to launch as scheduled in the first half of 2022 and will be assembled in Spring Hill, Tennessee, the company said. The Chevrolet Silverado EV officially debuts next month at CES, GM added.

Meanwhile, General Motors announced that an all-electric Sierra pickup will be its third all-electric vehicle in GMC's portfolio. Like the GMC Hummer EV, the electric Sierra will be built on the Ultium Platform. The truck will be revealed next year and will be assembled in General Motors' Factory ZERO Assembly Plant in Detroit and Hamtramck, Michigan.

HIGH DELIVERIES GUIDANCE:

 Roth Capital analyst Craig Irwin upgraded Canoo (GOEV) to Buy from Neutral with a price target of $14, up from $9. The analyst cites higher deliveries guidance and the outlook for abundant catalysts as gamma vehicles start rolling in early 2022. With non-dilutive financing and a capital light manufacturing strategy in Arkansas, Irwin sees current cash as adequate for initial 2022 production, before the Mega Micro facility in Pryor, OK comes online in 2023. Credible evidence of vehicle demand should materialize as primary trading catalysts, he added.

MOVING TO THE SIDELINES:

 Wells Fargo analyst Colin Langan downgraded Lear (LEA) to Equal Weight from Overweight with a price target of $195, up from $191. The analyst sees the 2022 production recovery and related margin expansion as already reflected in consensus. Further multiple expansion likely depends on further wins in e-powertrain or high voltage systems, yet Langan is cautious given the large number of suppliers entering this space.

BUY VOLTA:

 Cantor Fitzgerald analyst Andres Sheppard initiated coverage of Volta (VLTA) with an Overweight rating and $13 price target. Volta, which owns and operates Level 2 AC electric vehicle chargers that double as an ad platform, benefits from a differentiated business model, supportive state and federal legislative policies, growing EV adoption and an attractive valuation, Sheppard told investors. In addition, the Volta's partnerships with strategic host like Amazon's (AMZN) Whole Foods and Brookfield Properties, automakers like Ford (F) and Toyota (TM), and advertising partnerships such as Coca-Cola (KO) and Facebook (FB) gives Volta a competitive advantage that could result in rapid growth and continuous customer acquisition, Sheppard added.

More cautious on the name, Goldman Sachs analyst Mark Delaney initiated coverage of Volta with a Neutral rating and $10 price target. The analyst believes that Volta has an attractive product set and growth outlook, as well as network and early-mover benefits. Delaney noted, however, that the company has a capital intensive model that he anticipates will be free cash flow negative through 2025.

UNIQUE POSITION:

 Cowen analyst Joshua Buchalter initiated coverage of Luminar Technologies (LAZR) with an Outperform rating and $22 price target. Luminar has "separated itself from the crowded automotive lidar space with significant validating wins" and by making the leap from component supplier to solutions through software, Buchalter tells investors in a research note. The analyst sees the shares "inflecting" as investors recognize the company's "unique position" within the mobility space.

SIGNIFICANT UNCERTAINTY:

 KeyBanc analyst Sophie Karp downgraded Sunrun (RUN) to Sector Weight from Overweight without a price target. The analyst sees "significant uncertainty" following last week's proposed decision related to net metering reform in California. While there exists room for modification and ultimately a more constructive outcome, there is a "wide potential valuation range in various scenarios ranging" from the decision being implemented as written or modified in a variety of ways, Karp told investors in a research note. As such, the analyst views Sunrun's risk/reward as fairly balanced pending more clarity on the ultimate outcome in California.

Disclosure: None

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