It's another week, and analysts are focusing on various major players in the automotive sector, including General Motors (GM) , Lucid (LCID) , Rivian (RIVN) and Stellantis (STLA) .
Related: Your local car dealer may have this shocking opinion about EVs
Different directions for General Motors
On July 23, General Motors reported positive second-quarter earnings, which it attributed to strong demand for its EV and internal combustion vehicles.
During the earnings call, GM CFO Paul Jacobson scoffed at reports that the slowdown in EV sales is hampering the Detroit auto giant, noting that there is much more to the situation than what is apparent on the surface.
“When you start to break down some detailed registration info, retail EVs [sales] are not down as much as a lot of folks think,” he noted. “The retail customer is actually holding up pretty strong. We feel good where we’re going with the 200,000 to 300,000 units of [EV] production this year.”
Despite the reassurance from the CFO, analysts are mixed about the automaker's direction.
In a note issued on August 5, analysts from Nomura Securities upgraded General Motors to neutral from reduce. The Japanese investment bank's analysts cited that despite its reduced spending on its Cruise robotaxi venture, its U.S. emission compliance strategy could be a huge liability in the future.
The analysts pointed out that despite its investments in EV technology, it is not doing much regarding hybrids. GM currently does not have any hybrid vehicles in its portfolio, which could limit its flexibility as emissions regulations temper down the automaker's ability to sell gas-guzzlers in the future.
More energy for Lucid
Despite selling a record number of Air sedans, Newark, California-based Lucid Motors is still burning through cash. On August 5, it reported a net loss of $790 million during the second quarter of 2024, which was 3.4% higher than the same period last year.
Still, its biggest shareholder, the Saudi Arabian Public Investment Fund, is injecting another $1.5 billion into the luxury electric automaker.
In a statement, Lucid interim CFO Gagan Dhingra said that the money is expected to help keep the company afloat for a while.
“The additional $1.5 billion commitment by an affiliate of the PIF announced today is expected to provide sufficient liquidity into at least the fourth quarter of 2025,” Dhingra said.
Following the announcement of this funding, Cantor Fitzgerald analyst Andres Sheppard upgraded the stock from Underweight to Neutral. In his note, Sheppard sees the capital commitment as "significant" and says that the gesture “helps to solidify PIF’s longer-term commitment” to Lucid.
On the flip side, the cash burn was a significant issue for Stifel analyst Stephen Gengaro. In his note published on August 6, he expressed concern for the brand's cash burn, which he doesn't see being fixed with more money to burn.
“While the additional cash infusion provides a bridge through the start of production for Lucid Gravity in late 2024, cash burn remains a concern, and execution on cost reductions and increasing volumes continues to be key to reaching profitability,” Gengaro said.
Stifel kept its Hold rating.
Despite this, Lucid CEO Peter Rawlinson is confident in his brand's second model: the Lucid Gravity crossover SUV. Pre-production Gravity SUVs began to roll off the assembly line in Casa Grande, Arizona, on July 31.
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Still not-so-stellar Stellantis
Since Stellantis' July 25 earnings call, a lot has happened with analysts covering the multinational automaker with roots in Detroit.
Deutsche Bank analyst Tim Rokossa downgraded Stellantis stock from a "Buy" to a "Hold" rating on July 29. On July 30, Citi analyst Harald Hendrikse maintained his "Hold" rating after "weak" first-half 2024 results. On July 31, Nomura analysts upgraded Stellantis stock from a Neutral rating to a "Buy," citing their confidence in the automaker's management.
On August 7, Jefferies analyst Philippe Houchois joined the downgrader's club, shifting from a "buy" rating to "neutral," calling the automaker "more efficient than competitive," and noting that it must address its brands, capacity, and marketing skills to be attractive to investors.
Related: Stellantis threatens layoffs amid poor earnings
Rivian rolling down
Like Lucid, Rivian also posted some eye-watering losses during the second quarter of 2024. On August 5, the Irvine, California-based automaker said during its earnings call that it lost a staggering $1.46 billion, $300 million worse than the same period last year.
Despite the losses, much of the subject of conversation was about its newest landmark investor — Volkswagen. The Germans are set to pump up to $5 billion into the outdoor-focused automaker, which is set to expand its lineup with its awaited R2, R3, and R3X models.
On August 6, UBS, Wells Fargo, and Needham analysts lowered their price targets but maintained their respective "Neutral." "Equal-Weight" and "Buy" ratings.
In his analyst note, Needham analyst Chris Pierce maintained his positive outlook on Rivian, noting that it would be a long-term winner in the transition from gas to electric cars. He cited the R1 model's high customer satisfaction and its partnership with Volkswagen and Amazon with its delivery vans as drivers of future demand, adding that the upcoming smaller R2 and R3 models are expected to do numbers for the brand.
Additionally, Morgan Stanley analyst Adam Jonas noted, “Rivian has a greater chance of success as an auto/tech supplier than as a manufacturer." The firm lowered its price target on Rivian to $16.00 and maintained an Overweight rating on the stock.
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