Are Americans finally plugging in to EVs? Sales of battery-powered electric vehicles hit a new record in the fourth quarter of 2021, despite inventory problems and slow new-car sales, according to a new report from Kelley Blue Book.
KBB said this week that in the fourth quarter, EV sales jumped 72% year-over-year to a record 147,799 units. EV market share last quarter was 4.5%, also a record high for the segment. EV popularity is growing, and almost half a million people bought an EV in 2021. Moreover, KBB said, the number of pure EV choices is improving: There were 25 different EV models sold in Q4 2021, and several new nameplates are on the horizon for 2022.
"There is no doubt we are in the electrified-vehicle decade, and our Cox Automotive experts forecast even further growth of electrified vehicles in the years ahead," said Matt Degen, editor for Kelley Blue Book. "The automotive marketplace continues to evolve and diversify more with each passing year. Hybrids are now mainstream products, and more than a dozen new EVs are slated to launch in 2022 – including the much-anticipated and potentially high-volume Ford F-150 Lightning.”
The KBB report said that while consumers still say they think EVs are too expensive and range anxiety persists, interest has never been higher. Among EVs, Tesla remains the top player with 72% share of the EV market, KBB said. That’s down slightly from near 80% in 2020, but Tesla still delivered significant 71% year-over-year growth.
Tesla's Got to Clean Up its Act
Tesla will pay a fine of $275,000 in a settlement with the U.S. Environmental Protection Agency for violating the federal Clean Air Act at its manufacturing plant in Fremont, Calif. a few years ago.
For perspective, that’s equal to about two Model S Plaids, plus change, from a company that had a net income of more than $2 billion in the fourth quarter of 2021. Or, around 335 shares of Tesla stock. (Which do you think will appreciate more, the cars or the stock?)
The EPA charged that Tesla violated “National Emissions Standards for Hazardous Air Pollutants for Surface Coating of Automobiles and Light-Duty Trucks” from October 2016 through September 2019, which could put people living in communities nearby at health and environmental risks. According to the EPA, Tesla has corrected the violations, returned to compliance and promises to never do that again.
Meanwhile, a problem with groundwater availability at Tesla’s plant near Berlin could evaporate the company’s European expansion plans. Although Tesla knew about the water issue – which has been of concern for Berlin for decades – it pushed ahead, and said last year it wants to build up to 10,000 vehicles a week at the plant.
After initially scheduling production of Model Y vehicles in November or December 2021, the plant still isn't producing any cars. Approval from local authorities is pending and now Tesla is facing a court hearing next week that could delay the plant further. At stake is Tesla’s plan to take a chunk of the European electric vehicle market. The 500,000 vehicles the plant will produce, if it ever gets up to full capacity, would more than double Germany's production of electric vehicles in 2020 and some analysts have pinned their targets on the company’s successful expansion in Germany.
En Garde, Tesla!
It's possible that Germany could be the site of yet another brewing battle in the EV wars. Tesla! It's a dream poster. And guessing the winner would be difficult as each of the two adversaries have strong arguments in its favor. The battle between Tesla and Porsche is about to begin, writes TheStreet’s Luc Olinga. After months of rumors, Volkswagen said this week it’s considering giving independence to Porsche, one of its luxury brands along with Bentley, Bugatti and Lamborghini. That could take the form of an IPO of Porsche, the sports car brand whose emblematic model remains the Porsche 911 -- but the all-electric Taycan is coming up on the outside. Volkswagen, which is looking for funds to finance its electric transition, remains cautious about the outcome of the process, however.
Where's my EV? Lost at Sea
Thousands of Porsche, Bentley, Audi and Volkswagen cars have been stuck aboard a burning cargo ship for nearly a week. The Felicity Ace, a 60,000-ton cargo ship carrying a large shipment of both luxury and standard cars from Germany, had been on its way to U.S. dealers in Rhode Island when a fire broke out aboard near Portugal’s Azores Islands.
While all 22 crew members were immediately rescued, the ship, with an estimated $400 million worth of cars aboard, is currently still stuck somewhere off the coast of Portugal and still burning. As of Wednesday, no definitive word on the cause of the blaze, but the question is being raised about whether any of the vehicles are electric; the lithium-ion batteries in EVs can be more flammable than the batteries in gas-powered cars. But, to be sure, neither MOL Ship Management, the Singapore-based company that owns Felicity Ace, nor the manufacturers have commented on whether EVs are among the cargo or on how the fire started.
Here are more of the top electric vehicle stocks to watch this week:
Rivian
Rivian (RIVN) has made an unexpected appointment to a top manufacturing position just as the company is ramping up production at its Normal, Ill. plant and getting ready to start the construction of its second car manufacturing site in Georgia.
Tim Fallon, a former Nissan executive, will now serve as vice president of manufacturing operations. He replaces Erik Fields, also a former Nissan executive.
"Tim Fallon has joined the Rivian team, effective Monday, February 14, as the Vice President of Manufacturing," told TheStreet in an email Miranda Jimenez, a spokesperson. "He will be based at the Rivian vehicle plant in Normal, Illinois."
Fallon joins Rivian from a 15-year career at Nissan, where he served as vice president of manufacturing at the Nissan Canton Vehicle Assembly Plant in Canton, Miss.
The change comes as Rivian tries to prove to skeptics and markets that it can handle increased production rates. Rivian is expected to provide an update on its production status when the automaker releases its quarterly results on March 10.
Rivian shares were trading around $59 recently, down 43% since the beginning of the year, compared to the S&P's 10% year-to-date drop.
TheStreet Quant Ratings does not have a rating for Rivian.
Nio, XPeng, Li Auto
The California State Teachers’ Retirement System has upped its holdings of Rivian, as well as three Chinese EV makers: NIO (NIO), XPeng (XPEV) and and Li Auto (LI). CalSTRS, the largest teachers' retirement system in the U.S. and one of the biggest pension systems in the world, said in an SEC filing that it purchased more than 200,000 additional NIO ADRs last year, more than 90,000 XPeng ADRs and 124,000 Li Auto ADRs. CalSTRS reportedly purchased 282,772 Rivian shares in the fourth quarter.
TheStreet Quant Ratings rates Nio as a Sell with a rating score of D.
Tesla
Tesla's ranking in Consumer Reports' 2022 Best Car Brand survey fell seven spots from No. 16 in 2021 to 23 in a recent report, the biggest decline among 32 automobile brands surveyed. The report said that Tesla's decline was "due to the difficult-to-use yoke steering wheel the automaker added to its Model S and Model X vehicles, affecting their road test scores."
Subaru was named the Best Car Brand this year, leaping over the survey winner from 2021, Mazda, which finished second in the rankings.
TheStreet Quant Ratings rates Tesla as a Hold with a rating score of C+.
Ford
Ford F shares got a boost following a report that the carmaker is mulling the split of, its electric vehicle business from its legacy operations. Bloomberg reported that Ford CEO Jim Farley is considering ways to separate the division, which is targeted with billions of investment over the coming years, from its combustion-engine business.
Ford briefly surpassed rival General Motors (GM) in terms of market value earlier this year as it booked an $8.2 billion can from its investment in Rivian and gathered 200,000 reservations for the newly-unveiled electric pickup F-150 Lightning pickup.
Ford said it plans to double its current EV output by 2023, and sees earnings growth this year of between 15% and 20%, but weaker-than-expected fourth-quarter profits, as well as ongoing supply-chain and production disruptions, have tested investor patience for its ambitions to challenge Tesla's dominance. Despite Friday's jump, Ford shares, along with the broader market, have dipped about 4% for the past week.
TheStreet Quant Ratings rates Ford as a Buy with a rating score of B.
Fisker
Fisker (FSR) says it's ready to throw its hat in the affordable EV ring. Fisker shared more information about Project PEAR during its fourth-quarter earnings release, announcing that it has started taking reservations for its five-passenger EV that has a starting price of $29,900 before incentives and taxes.
Fisker has revealed the details of only one vehicle to date, its Fisker Ocean SUV. That vehicle is scheduled to begin production in November with deliveries to follow soon after. The Pear is slated to go on sale in 2024, but details about the vehicle have been scant so far. We do know the vehicle will be a compact, five-passenger crossover, but past that, there is little known about the vehicle.
Lucid
Lucid (LCID) is scheduled to report fourth-quarter earnings on Feb. 28. Will it be an opportunity for shares to resume their growth trajectory and recover from recent losses?, asks Bernard Zambonin on TheStreet's Wall Street Memes.
Lucid Motors needs to report a loss per share below 30 cents to beat market expectations for Q4. Last quarter, the company failed to beat expectations of a loss per share of 25 cents, instead reporting a loss of 41 cents. According to Morgan Stanley analyst Adam Jonas, investors need to be prepared for high levels of volatility in Lucid's current share price. He has set a price target of $16 on the stock, which would imply a downside of nearly 40% from its current share price around $26.
In terms of revenue, Lucid is expected to report $59.87 million, with the highest expectation at $83 million and the lowest $36.74 million. Analysts are also waiting to find out the number of vehicles Lucid delivered in 2021. And an update on the company's reservations for 2022 could also be a major catalyst for the stock.
