Investing in green energy is a smart long play, but early FOMO ballooned the EV sector with a million cubic feet of hype, forming a market as full of ‘it’ as Trump’s diaper bin. China’s upcoming grand consolidation signals a serious correction for the EV space that promises to shake out all the crap. Despite the doom and gloom aspect of a market crash, value correction is a good thing, creating new prospects with real value propositions, so let’s dig in once again. Please note, all share prices and valuations were recorded during trading on Thursday.
Arcimoto’s (FUV.Q) started the week with a couple of share price pops but slid almost immediately and is only marginally up trading at $11.84 USD per share. Still no news from the company that announced it had been added to list of rental options at the Graduate Hotels Eugene, Oregon location. The company currently trades at less than half of its 52-week high and slightly less than its one-month high. Maybe news of the completion of its new manufacturing facility will provide a catalyst to get share price moving in a positive direction, but the lack of news on the sales/rentals front doesn’t bode well. That doesn’t mean things won’t turn around, but right now Acrimoto has a lot to prove before it can justify its value. The company is valued at $434.5 million with 37.39 million shares outstanding as of August 12, 2021.
Canoo (GOEV.Q) had a good week, up 7.57% on the boards to trade at $7.34 per share. The jump has been attributed to WallStreetBets, yes, the same group that pumped GameStop and AMC. As such, the value climb may be little more than shearing newbie investors blinded by the glitz of social media stock recommendations. The press front is silent and has been since late August when the company made a PR play by publishing its sustainability manifesto. No announcement of a new battery supplier and its Oklahoma manufacturing facility won’t be open until 2023. Although the idea of the company’s skateboard design seems fashionably cyclical and good for value retention, it has yet to put one on the road. Considering the company’s CCP connected backing and the current state of Evergrande, there could be some funding issues in Canoo’s immediate future. Is this EV manufacturer a candidate for investing in green energy? At a valuation of $1.56 billion and only questionable subreddit group interest, you may want to wait until at least next year before dipping your toes.
ElectraMeccanica’s (SOLO.Q) announcement that it would begin customer deliveries of its flagship SOLO EV three-wheeler provided some steam for the company’s share price which after a quick dip at the beginning of the week has climbed steadily to $3.58 per share, up 4.99% over the last seven days. The Vancouver, Canada-based EV manufacturer, announced today that it had appointed its current COO, Kevin Pavlov, to the position of CEO, replacing Paul Rivera, who is moving up to join the board. Pavlov’s appointment is important for EM now as the company heads from idea to commercial production. Pavlov’s previous experience as COO and director of Karma Automotive, an American luxury EV producer, and his time as senior management at Magna International, will figure prominently in the company’s real-world transition. So far, EM has made promises real and if it is able to scale production, it may secure a sustainable spot in the EV marketplace, creating a smart option for those investing in green energy. Don’t forget your due diligence, however! The company is currently valued at $404.12 million with a nice trading volume of 2.19 million.
Fisker (FSR) rose in the market this week despite Bank of America’s downgrade, climbing 13.19% to $14.57 per share. The EV manufacturer presented at the 9th annual Laguna Conference on September 15th. This Morgan Stanley sponsored event hosted companies from a variety of sectors from resources to technology. The company has yet to produce its signature electric Ocean SUV, touted to become a cheaper option to Tesla’s Model Y. Fisker has little more than promise until it pulls the trigger on production of the Ocean SUV which it continues to swear will commence in late 2022. Will possible dilution in the company’s cards due to a recent convertible debenture offering and no physical product for another year, it may be prudent to put this one on pause until it can literally put rubber to the road top. Fisker has a market value of $4.04 billion with 296.1 million outstanding shares.
Green Motor Power Company (GPV.V) dropped delivery news twice since last we spoke, noting that the EV manufacturer shipped its EV Star Plus class 4 passenger bus to Fraser Academy in Vancouver on Monday and then on Thursday WeShip LLC took delivery of 10 GreenPower EV Star Cab for use in Southern California. The Fraser deal was made possible through generous donations to the specialty learning institution as well as $50,000 from B.C.’s SUVI voucher program. Government incentives will continue fuel GMPC’s deal at least for the immediate future. The company has to streamline its production process and up its profit margins significantly before it will be able to stand on its own two feet without financial assistance. However, it’s relative sane market cap and the continuing string of sales may be indicators this EV producer is on its way to becoming a good candidate for those investing in green energy. The Canadian-based company currently trades at $14.25 CAD per share, up 5.87% from last week for a market cap of $402.68 million.
Kandi Technologies (KNDI.Q) coasted this week with a little drop to settle at $4.51 USD per share. Not much has been said since the company announced on the 13th it had received its final payment from its Fengsheng sale. China’s Evergrande problem hasn’t gone away, only temporarily delayed. This potential TARP payout scenario or market crash combined with the reality trough of China’s EV market is a definite wrench in the works for Kandi and its investors. The EV boom in China has ground to a halt and of some 300 EV producers now calling the country home only a sliver can survive the year. The CCP intends to curb disaster by consolidating the sector but are the EV operators with a future able to suck up the losers without another huge bailout. As a result of this tenuous situation, foreign EV producers like Tesla, may find themselves out of luck in China. Kandi has a market cap of $342.35 million with 75.91 million outstanding shares.
Li Auto (LI.Q) had some bad news for investors this week when it announced a reduction to its delivery outlook for Q3 2021. As anticipated, the chip shortage coming out of Covid 19 impacted the company’s supply chain, forcing the EV manufacturer to lower its delivery outlook from 25,000 to 26,000 units down to approximately 24,500 vehicles. The market reacted with a 6.30% drop in share price. Announcements that it will continue to outsell NIO didn’t please traders much as China’s financial woes continue to hang over the whole industry. Li is the best contender at the moment to give Tesla a run for its ill-gotten money and will likely outlast the troubles in China, but it remains to be seen how it will fare. This may be another situation of wait-and-see until at least the new year. However, if you are investing in green energy, you may want to dabble a little in Li right now to see how things pan out
Lordstown Motors’ (RIDE.Q) partner, GM unveiled electric motors powered by Lordstown batteries this week. This is great news for Lordstown who recently received an underperform rating from Bank of America and investors sent share price up 11.23% over the last week with most of the push occurring today in the wake of the press release. The EV manufacturer seems to have gotten past the shady c-suite tactics of the previous management and with Ninivaggi at the helm as CEO is making positive moves that may indicate it’s not out of the race yet. There’s still a long way to go as the company reported that as of June 30, 2021, it had $369.5 million in cash and cash equivalents but an accumulated deficit of $367.9 million combined with a net loss of $233.4 million. Lordstown is still hammering away at its flagship Endurance pickup truck and expects to begin limited production in late September with increased production to take place in H2 2022. As noted by its last quarterly bottom line, the EV manufacturer needs to raise more cash to reach its goals and turn the company from a PR nightmare into a going concern. There are only seven days left in the month as of writing and Lordstown has yet to officially announced it has started putting the Endurance together on the assembly line. This one is a crapshoot if you are thinking about investing in green energy.
Lucid Group (LCID.Q) officially kicked Tesla’s ass in terms of range with Lucid’s Air Dream Edition and as a result, investors rewarded the company with a 12.98% share price hike over the last week. The EV manufacturer projected it would build 520 Dream Edition cars models instead of 500 initially planned as a celebration of its technological win. Next week Lucid intends to put on a collection of Production Preview events at its AMP facility in Casa Grande, Arizona. Invited guests will be able to take test drives of the Lucid Air to experience for themselves, the considerable engineering that goes into building a quality EV. Lucid has the niche luxury EV market well in hand. It will be interesting to see how the sector reacts to Lightyear’s One which comes with a 725-kilometre range and solar charging that adds 70 kilometres of range each day. You could go months without plugging in! That said, Lucid is hitting the ground soon while Lightyear just raised $110 million to help it get to production stage. Regardless, I think both companies are a solid option if you are investing in green energy.
Nio (NIO) is still climbing out the hole it fell into at the top of the week and currently sits 3.17% under at $36.01 per share. Like its Chinese counterparts, Nio sits in unknown territory as the EV sector normalizes in China and Evergrande extracts its pound of flesh from the country’s coffers. To the company’s credit, it launched a new hybrid-cell battery pack with a 75-kWh standard range instead of the previous 70 kWh battery. The technology behind the new design combines two different lithium-ion battery chemistries of nickel-cobalt-manganese and lithium iron phosphate. The NCM cells provide high energy density while the LFP section is cost effective. The company expects the new configuration will add at least seven percent to the range of its ES8, ES6 and EC6. Even though the EV manufacturer is taking orders now for the new battery, deliveries won’t begin until November. The near-term success of Nio on the international stage will depend largely on what shakes out over the next two months as the CCP addresses its economic problems.
Tesla (TSLA.Q) remains an obstinate shit show. In a recent biography of Peter Thiel, who joined forces with Musk in the early days of PayPal, a source known by both Musk and Thiel said Musk thinks Peter is a sociopath and Peter thinks Musk is a fraud and a braggart. Both men are correct in their summations of each others’ character. The unveiling of Tesla’s new FSD 10.0 which Musk said would be mind-blowing, couldn’t avoid cone obstacles. Then Elon spouted more misdirection attempting to draw attention from the botched software release to Tesla’s plans for a new motorcycle. The company still hasn’t managed to master commercial production of its vehicles and now there’s motorcycles? Later Musk tried more damage control by stating the new 10.0.1 FSD would monitor drivers for a week before allowing the FSD module to operate. Have no idea how this will prevent owners from screwing with the already faulty software and sitting in the back seat once they’ve passed the ‘test’. In answer to Tesla’s previous penchant for driving into the back of emergency vehicles, another announcement regarding 10.0.1 claimed the company’s cars would now recognize emergency lights and slow down. If they could only get them to do same for cement pillars. Now, on top of the US National Transportation Safety Board’s investigation into Musk’s maliciously negligent release of the falsely labeled FSD, researchers at MIT have published a study that states unequivocally Tesla’s FSD is “unsafe”. Meanwhile, the eyesore that is the Cybertruck remains on the drawing board unless you’re interested in smashing its unbreakable windows. But no matter, Musk has moved on to his space toys celebrating a billionaire’s holiday as civilians in space. I won’t even go into the unworkable and spurious insanity of nuking Mars, the recently filed lawsuit by the Australian Energy Regulator accusing Tesla of not providing power as promised or the fact Musk quietly took his last house off the market despite claiming he has no need for worldly possessions. I will say this, Musk doesn’t have Asperger’s, he has privileged incompetent asshole in spades. He is nothing more than a tale-spinning carnival barker and deserves to be bounced. Yup, not an investor.
Workhorse Group (WKHS.Q) took a considerable hit as the company recalled its flagship C-1000 electric van to perform additional testing and modifications to increase load capacity within federal motor vehicle safety standards. That means the 41 trucks that were already delivered are coming back for testing which isn’t expected to be complete until Q4 this year. The company is already saddled with prepayments for batteries, and this could negatively impact its operating capital which might prolong the recall, costing the company more time and money than anticipated. Workhorse is already under investigation by the SEC for alleged accounting fraud and recently dropped its bid protest complaint with USPS. When I wrote about the company last week, I didn’t think it could get any worse for them, but I was wrong. Share price plunged after the recall announcement on Wednesday and is still down 8.46% from the beginning of the week. Will Workhorse get its house in order or is this just another clown act in an endless circus of errors? If you’re investing in green energy companies, you should probably look elsewhere until the dust settles on this one. Workhorse currently trades at $7.57 for a market cap of 938.29 million.
XL Fleet Corp (XL) took a dip this week when an investor in Pivotal Investment Corp II, the SPAC that merged with XL Fleet, filed a proposed class action suit in Maryland, claiming the $1 billion dollar deal was disturbingly conflicted. The investor, Cory Laidlaw said, “The Pivotal transaction failed to observe the most basic principle of Delaware corporate governance: namely, that a corporation’s governance structure should be designed to protect and promote the interests of public stockholders, not the financial interests of its insiders and controllers.” Laidlaw’s suit comes four months after suing XL Fleet for access to its books so he could investigate potential wrongdoing in the completion of the merger. XL is already under the gun in Manhattan where another proposed class action suit alleged the company failed to disclose that it had inflated sales, overstated its technology and ability to meet production deadlines. XL Fleet moved to dismiss the suit in August. Can the company be punished for just following in the steps of Musk? The wide berth given to Tesla’s many reporting inaccuracies and Musk’s habit of bullshit projections, is damaging the market in ways that will shake the institution to its core. The SEC needs to step up and ensure retail investors aren’t being taken to the cleaners by the current trend of rainmaker capitalism. XL still has a chance, but it has a mountain to climb to get there. The company trades at $6.45 per share for a market cap of $898.91 million.
Xpeng (XPEV) remains caught up in China’s economic woes and spent the week slipping on the boards. No more news from the EV manufacturer since the launch of their economy model P% sedan. This company is Tesla’s direct competitor in China and if the CCP decides to drop the American upstart’s EV offering, Xpeng could take the lead and push its success internationally. However, there are too many unknowns in China and foreign investors are watching the Evergrande saga on tenterhooks. I like the company, but I would recommend letting matters take their course. A market collapse in China could stall their economy and as China is a large customer for many of our resources, their failing GDP could take down the global economy. However, the sky may remain where it is and sometime early next year, you may consider investing in green energy companies within China again and if that turns out to be the case, Xpeng looks like a good option. Do your due diligence!
Now back to the traditional auto makers:
GM (GM) made an announcement this week at the 2021 Mackinac Policy Conference in Michigan where GM president, Mark Ruess revealed three new motors with an estimated 1,000 horsepower. The 180 kilowatt front-drive motor, 255 kilowatt rear and front drive motor and the 62 kilowatt all-wheel-drive assist motor will all be a part of the company’s Ultium Drive. According to company specs, up to three separate 255 kilowatt motors can be installed in the 2022 GMC Hummer EV generating an estimated output of 1,000 horsepower. Like the 2.5 second 0-60, not sure how practical 1,000 horsepower will be unless you’re dragging a house.
Ford (F) signed a deal this week with Redwood Materials to recycle EV batteries. This circular approach will be necessary as EV sales are expected to climb to more than one million annually by 2025.
Toyota is facing boycotts due to its alleged efforts to slow down mass electric vehicle adoption. The company claims its lobbying efforts to oppose the Biden Administration’s reformed EV incentive program was because it favored union-made cars over vehicles manufactured by itself and other companies including Tesla and Honda. However, protestors note that Toyota’s meddling began long before the union bonus became part of the deal. As a result of the company’s actions, Paul Scott, a founder of EV advocacy group Plug in America, is calling for a national boycott of Toyota:
“The climate clock is ticking and we have to start hitting polluters where it counts–in the money. I worked at an EV dealership, although it wasn’t Toyota, and I can tell you that this is our best chance for change, alongside federal legislation. Car sales people loathe losing a single sale and they hate bad publicity. Toyota deserves every bit of it because they are keeping us addicted to gasoline.”
Volkswagen announced it would be building a new electric vehicle battery system factory in eastern China’s Hefei city. Production is expected to commence in 2023. Volkswagen stated it would invest $164 million in the plant by 2025 that is anticipated to produce between 150,000 to 180,000 battery systems annually when it first opens its doors. The EV manufacturer’s need to increase its control over operations at the plant hasn’t made any friends with its Chinese partners. Still this might be a company for people investing in green energy futures.
Nissan is teasing the European EV community with its upcoming Airya model. Folks in Norway can expect an MSRP of $47,000 Euro. The new electric crossover comes at a cost, much more than the entry level LEAF, but company promises the vehicle will dazzle both inside and out.
Alright, it’s been a long day and I am sure I have missed something in the grind. If you have anything you’d like me to add in the next round, let me know. Yes, there more outlandish exaggeration in the EV sector than an Infowars broadcast, but if you cut through the bafflegab, there are some gems in the making. Read up and pick your winner, you’ll make this a world worth living in. Remember your due diligence and as always, good luck to all!
–Gaalen Engen
