Chinese electric vehicle stocks, including NIO (NIO) - Get NIO Inc. Sponsored ADR Class A Report, Li Auto (LI) - Get Li Auto Report and Xpeng (XPEV) - Get Xpeng Report, continued the rebound from their July 21-27 drop, even as other U.S.-listed China stocks fell.
Fear of stringent Chinese regulation is depressing non-EV stocks. But China hasn’t made much noise about cracking down on EV makers. It’s an industry the government would like to dominate. So it may have no desire to put the hammer down on EV companies, and that’s likely buttressing their shares.
Over on Real Money, Jim Cramer writes in For Investors, China Offers the School of Hard Knocks: We really don't know which kinds of companies China is going to target, but I see one pattern, and you should know it before you put down your cash.
When it comes to U.S. EV stocks, Tesla (TSLA) - Get Tesla Inc Report is the big daddy, of course, wrote TheStreet's Dan Weil. But, Ford Motor (F) - Get Ford Motor Company Report is gaining ground in the U.S. EV market. The company lifted its 2021 forecast following a surprise second-quarter profit that defied supply constraints linked to the global semiconductor shortage.
Tesla's founder Elon Musk warned investors that the global shortage in semiconductor supplies remains "quite serious" and could impact production rates over the second half of the year, adding that volume growth will depend on the availability of other parts in the global supply chain.
"The chip supply is fundamentally the governing factor on our output," Musk told investors, "It is difficult for us to say how long this will last because [it's] out of our control essentially. It does seem like it's getting better, but it's hard to predict."
SpaceX, the rocket company owned by Musk, won a round in a legal dispute over Texas property. Oil regulators voted unanimously in Musk's favor in a dispute over land being used to build the Starbase complex near the border with Mexico.
The Railroad Commission of Texas voted 3-0 to designate SpaceX's Lone Star Mineral Development unit as the operator of inactive oil and natural gas wells on 24 acres. That land is being developed to support the entrepreneur's rocket-launch facility near the mouth of the Rio Grande, Bloomberg reported.
On Tuesday, SpaceX tweeted photos of Starship's giant first-stage booster, known as Super Heavy. "Installing Starship booster engines for first orbital flight," it said in a post that included a photo of the rocket, with Musk holding his young son.
In March, the SpaceX prototype of its Starship SN11, which is being designed for an eventual trip to Mars, crashed during a landing attempt.
There are recent hints from Musk indicating that he wishes to take a less active role in running Tesla. On July 30, in response to a tweet, Musk replied, "I don't want to be the CEO of anything," following a revelation last week that Musk will no longer participate in Tesla earnings conference calls "unless there's something really important that I need to say." Why would this be positive for the company? asks Real Money's Ed Ponsi.
The shares were not performing well, however, prompting Cramer to ask "is somehow the magic lost, because this wasn’t the quarter?"
"I’m a little bit surprised honestly," Mauer said, "because I think Tesla did crush it. Maybe some of the comments on the earnings call weren’t investors looking for ... I’m definitely super-happy with the results personally."
Here is a list of the electric vehicle stocks to watch:
It took a few days for Tesla to find its groove after reporting its better-than-expected results, but the stock is now trading much better on the long side. Perhaps it’s the company’s exposure to Bitcoin helping to give it a lift, write TheStreet's Bret Kenwell.
The electric vehicle giant shares traded at a three-month high Monday even as investors parse messages from founder Elon Musk that may question his future as group CEO. Tesla posted a record net income of $1.142 billion for the three months ending in June as revenues rose 98% from last year to $11.96 billion and deliveries hit an all-time high of 201,250 vehicles.
Ford Motor delivered its quarterly results this past week, sailing past expectations and providing better-than-expected guidance. The company said adjusted earnings for the full year would come in between $9 billion and $10 billion, a massive boost from its prior forecast of around $5.5 billion, and said sales could rise as much as 30% compared to first-half volumes.
Ford is a long-term holding of Real Money's Stephan Guilfoyle. After the company reported earnings, Guilfoyle feels bullish on this stock. Looking at the fundamental thesis, it boils down to one thing and that's the fact that dealerships are talking about Ford's EV entrance, but not about Tesla's cars.
General Motors (GM) - Get General Motors Company (GM) Report posted weaker-than-expected second-quarter earnings, but lifted its full-year profit guidance, as warranty costs linked to the Chevy Bolt battery recall ate into the carmaker's bottom line.
General Motors said adjusted earnings for the three months ending in December came in at $1.97 per share, up from a loss of 50 cents per share over the same period last year but well shy of the Street consensus of $2.23 per share. GM added that it booked $1.3 billion in warranty recall costs for the quarter, with $800 million linked to the replacement of Chevy Bolt batteries.
Group revenues were pegged at $34.2 billion, GM said, a 103.8% increase from last year that beat the analyst consensus of $30.9 billion. The company also said it sees full-year adjusted earnings range of between $5.40 and $6.40 per share, up from $4.50 and $5.25 per share.
Struggling electric truck maker Lordstown Motors (RIDE) - Get LORDSTOWN MOTORS CORP. Report said that hedge fund YA II PN Ltd has committed to buying up to $400 million of the company's stock over a three-year period. Lordstown Motors disclosed the agreement in a filing with the Securities and Exchange Commission. Under the terms of the deal, YA can receive nearly 35 million Lordstown shares upon execution of the agreement, subject to the approval of Lordstown shareholders, as well as a small discount on the shares whenever purchased.
The company said that by the end of 2025 it planned to add 3,700 battery-swap stations, which would give it 4,000. A swap station is where EV drivers go to quickly exchange their batteries for new ones, rather than waiting for a charge. A typical electric car takes about eight hours to charge from empty to full, according to U.K. charging company Pod Point. The company is making charging stations a priority, Co-Founder and President Qin Lihong told reporters this past week.
Real Money’s Carolyn Boroden notes bullish technical factors for the company. “I have a simple symmetry setup to consider in NIO,” she wrote.
Li Auto (LI) - Get Li Auto Report, the Chinese electric vehicle maker, reported second-quarter deliveries more than doubled and topped its estimates. The Beijing company delivered 17,575 vehicles in the quarter, up 166% year over year and nearly 40% from the first quarter. The company had expected to deliver 14,500 to 15,500 vehicles in the second period.
Shares of Chinese electric vehicle maker XPeng (XPEV) - Get Xpeng Report rose sharply this past week on strong delivery results, while peer NIO gained just a bit on mixed numbers. XPeng said deliveries soared 228% to 8,040 in July from last year and were up 22% from 6,565 in June. The July total represented its second consecutive record month.
The company was added to Hang Seng Composite Index this past week. Hang Seng Indexes Company Limited announced that XPeng meets the Fast Entry Rule of various indexes.
RBC analyst Joseph Spak initiated coverage of hydrogen fuel-cell technology company Plug Power (PLUG) - Get Plug Power Inc. Report with an outperform rating and a one-year price target of $42. Spak wrote that "Plug Power’s valuation is rich, but its long runway for growth justifies the premium." He also noted that Plug Power has a substantial amount of opportunity for growth, given the Hydrogen Council’s estimates that the hydrogen economy could bring in more than $2.5 trillion in annual sales by 2050 to the immediate industries associated with hydrogen technology.
"They report soon and they have to deliver. They've let us down the last few times," said Jim Cramer.