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The Chinese EV Appetite Is To Benefit Both Domestic and Foreign Players

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On Monday, Nio (NYSE: NIO), known as the Tesla (NASDAQ: TSLA) of China delivered its fourth quarter earnings. Although the results were good, they were weaker than expected and for a stock that’s been as strong, the quarter had to be robust. But NIO The stock took a tumble after earnings, as the automaker warned that the global chip shortage will slow production. While revenue scorched higher by 133%, it slightly missed consensus expectations, as did the bottom-line results, with the company reporting a wider loss than analysts had expected.

Q4

Revenue of $1.02 billion resulted in a per-share loss of 14 cents. Gross margin improved to 17.2% in the quarter, from  negative 8.9% a year ago and previous quarter’s 12.9%. Vehicle margin improved 0 17.2% from negative 6% a year ago and Q3’s 14.5%. Cash and cash equivalents climbed to $6.5 billion at the end of the quarter versus the $3.3 billion in the prior quarter. Nio had already disclosed that Q4 2020 deliveries jumped 111% to 17,353 vehicles. As most businesses in China closed for a week during the Lunar New Year holiday, sales dropped to 5,578 vehicles in February from 7,225 vehicles in January but both months were up by triple digits compared to 2019 figures. In February, the ES6 sales led with 2,216 deliveries, followed by 2,035 for the EC6 and 1,327 for the ES8.

Outlook

Nio sees Q1 deliveries in the range between 20,000 and 20,500 vehicles, up 421%-434% from a year ago and up 15% to 18% from fourth quarter. Revenue is expected in the range between $1.13 billion to $1.16 billion, up about 438% to 451% from a year ago and up 11% to 14% from Q4. CEO William Li revealed production capacity had climbed from 7,500 to 10,000 vehicles a month in February, but also warned a shortage in chips and batteries is imposing a slowdown back to 7,500 a month in the second quarter.

Rivals

The results are impacting Tesla too, which was down about 2.5% on the news. Among other EV stocks, Li Auto (NASDAQ: LI) fell 8.2% Tuesday whereas last week it reported a surprise profit. Xpeng Motors (NYSE: XPEV), which reports on March 8th, dropped 11.3%. Tesla slipped 4.45% on Tuesday. Subsidy cuts and rising competition from tech and legacy auto giants in China are weighing on EV players. Tesla was forced to make its made-in-China Model Y more affordable to compete with Nio’s new EC6 electric crossover. Two versions of the much-cheaper Volkswagen (OTC: VWAGY) ID.4 will start getting delivered in China by the end of March. Meanwhile, Nio in January announced the ET7 electric sedan which will compete with Tesla Model 3 due next year.

But, new entrants are coming and there also many less obvious players which can fuel them up for success. One of them is Worksport Ltd (OTC: WKSP), an innovative manufacturer of tonneau covers for pickups. With its TerraVis™ solar tonneau cover system and TerraVis COR™ mobile energy storage system, it aims to become a Tier 1 OEM manufacturer of solar-panel tonneaus for electric vehicle maker as it already partnered to configure its groundbreaking technology for two upcoming pickups. The Canadian-based company announced on Wednesday that following the success of its oversubscribed Regulation-A public offering, the company has received over $2.3 million from investors who have exercised their warrants.  This additional influx of capital will support Worksport’s strategic North American and Chinese manufacturing investments as well as in the development of its revolutionary Terra Vis system.

Nio’s positioning

Edison Yu with Deutsche Bank highlighted Nio’s “impressive” first-quarter guidance which according to him, outline “a very real path to more than 100,000 deliveries this year. The analysts finds that the outlook reflects growing awareness and appreciation of its aspirational brand and ecosystem, putting the company on track to be a market leader in the China premium segment. Dan Ives at Wedbush finds Nio’s “robust” fourth-quarter results describe a transformational EV opportunity playing out in China with all EV players having “massive tailwinds into 2021 as the golden age of EVs takes hold. All the above companies are well-positioned to lead the way forward in this Chinese market opportunity as analysts expect Chinese EV market is set to go from 4.5% penetration to 10% in the next two years based. The jaw-dropping consumer appetite for EVs can benefit well positioned domestic vendors as well as foreign players.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

A Major EV Win for the Biden Administration

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On Sunday, the two South Korean battery makers, LG Energy Solution and SK Innovation Co. reached a settlement that will allow two plants in Georgia to move forward with plans to produce lithium-ion batteries for Ford Motor (NYSE: F) and Volkswagen (OTC: VWAGY). The settlement was reached before the Biden administration’s deadline on Sunday to intervene and reverse the decision made by the U.S. International Trade Commission. This outcome is a major win for the administration which recently unveiled a sweeping infrastructure plan to boost its EV progress. Biden’s $2 trillion infrastructure plan includes $174 billion in EV spending, which is more than the amount proposed for spending on roads and bridges.

The deal

Back in February, the ITC ruled that SK Innovation had stolen trade secrets related to EV batteries from LG Energy Solutions and ordered the U.S. to block the company from importing supplies to build batteries. The companies agreed to drop litigation in both the U.S. and South Korea and not pursue further lawsuits for a decade. SK Innovation will also pay LG Energy Solution $1.8 billion in cash and royalties.

Not resolving the dispute would cause more harm than thousands of lost jobs in Georgia, it threatened the whole country’s progress in curbing climate change with its EV efforts. For now, electric vehicles make 2% of new auto sales but the Biden administration is determined to shift away from gas-powered engines. If no settlement was reached, the Biden administration may have had to overrule the ITC in order to allow SK Innovation to build the plant as otherwise, Volkswagen and Ford would have had to find new battery suppliers with diminished bargaining power which would have delayed new model releases and hampered their EV progress. But doing so would harm its relationship with LG Chem that has a joint venture with General Motors Co. (NYSE: GM), with at least one more planned with, along with its other major clients such as Tesla Inc. (NASDAQ: TSLA).

Joining forces with to build a strong EV supply chain 

Jong Hyun Kim, CEO of LG Energy Solution, and Jun Kim, CEO of SK Innovation, said in a joint statement that the firms would “compete in an amicable way”. The two South Korean battery makers are dedicated to work together to support the Biden administration’s climate agenda and to develop a robust U.S. supply chain. The United States need a strong, diversified and resilient EV battery supply chain to create good-paying jobs and lay the groundwork for an EV future. The president’s EV proposal also involves installing at least 500,000 charging stations across the country within less than a decade, incentives for Americans to purchase EVs along with funding to equip factories with the new technology and take care of the domestic supply of materials.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

A Jam-Packed Week Ahead

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JPMorgan (NYSE: JPM), Goldman Sachs (NYSE: GS), Delta earnings (NYSE: DAL) along with Coinbase IPO are just some of this week’s main spotlights. Other companies set to report earnings include Bed Bath & Beyond (NASDAQ: BBBY), Wells Fargo & Company (NYSE: WFC), PepsiCo Inc (NASDAQ: PEP), and UnitedHealth Group International (NYSE: UNH).

Monday

Monday will be the calm before the economic data storm. The federal budget balance is poised to be the day’s main event.

Tuesday

On Tuesday, we will get a look into some economic data such as the consumer price index for March. The CPI Index rose 0.4% in February, marking an annual increase of 1.7%.

Wednesday

Wednesday is the day of earnings, including reports by JPMorgan, Goldman Sachs and Wells Fargo as well as Bed Bath & Beyond, all before the opening bell.

But, it is also the day of the initial public offering of the cryptocurrency exchange operator, Coinbase (NASDAQ: COIN). Coinbase was founded in 2012 as a platform to trade bitcoin. Today, it has 43 million users and serves 7,000 institutional customers. Its IPO was delayed due to an investigation from the Commodity Futures Trading Commission, after which the company agreed to pay $6.5 million to settle regulatory claims that it reported misleading information about its trading volumes. It did not admit to or deny the allegations.

Moderna Inc (NASDAQ: MRNA) will hold a virtual Vaccine Day for analysts and investors, where the company’s leadership will discuss its mRNA vaccines and key considerations for future developments.

Thursday

Besides economic reports, Thursday will also be a big earnings day as Bank of America Corporation (NYSE: BAC), BlackRock (NYSE: BLK), The Charles Schwab Corporation (NYSE: SCHW), Citigroup (NYSE: C), Delta Air Lines, JB Hunt Transportation Services Inc (NASDAQ: JBHT), PepsiCo, Rite Aid Corporation (NYSE: RAD), Truist Financial Corporation (NYSE: TFC), United Health Group, and US Bancorp are all set to report before the market open, while Alcoa Corporation (NYSE: AA) and PPG Industries Inc (NYSE: PPG) will report after the bell.

Friday

Before the opening bell, Ally Financial Inc (NYSE: ALLY), The Bank of New York Mellon (NYSE: BK), Citizens Financial Group Inc (NYSE: CFG), Kansas City Southern (NYSE: KSU), Morgan Stanley (NYSE: MS), PNC Financial Services (NYSE: PNC), and State Street Corporation (NYSE: STT) will report their earnings. But many eyes will be upon President Biden who will have his first meeting with a foreign leader since taking office. With Japan Prime Minister Yoshihide Suga, Biden is expected to discuss a new trade alliance to bolster semiconductor production as the world faces crippling chip shortages due to the coronavirus pandemic and the U.S. trade war with China.

Overall, a versatile and exciting week is ahead.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

EV Updates

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President Biden is pushing hard to get more Americans to buy EVs in order to combat global warming and encourage domestic manufacturing with a $2 trillion infrastructure plan he is trying to sell to Congress that includes about $174 billion to boost EV sales and production, which is more than the president proposes spending on roads and bridges. The EV market is developing full speed ahead across the globe, with Europe and China being already ahead of the US in the race towards an all-electric future.

Peugeot Is Coming After Volkswagen and Tesla

As Stellantis N.V. (NYSE: STLA) came to life as Fiat Chrysler (NYSE: FCAU) and Groupe PSA joined forces, one of their subsidiary brands recently revealed a fully electric Peugeot 308 will arrive in 2023 to challenge Volkswagen’s (OTC: VWAGY) multi-billion euro gamble to challenge Tesla’s (NASDAQ: TSLA) electric car dominance, the ID.3. Despite initial software problems, VW’s first all-electric vehicle has been well received with the investment bank UBS declaring it to be a viable threat to Tesla, with a huge family of electric vehicles across the VW brand empire coming along in the near future.

The recent petit e-208, an all-electric version of the popular 208 hatchback made a great first impression with its blend of style, driving dynamics, gadgets and range. The e-208 is currently the quickest and most powerful 208 variant on sale and the upcoming e-308 could become Europe’s best-looking hatchback. Specifics regarding e-308 are rather scarce, besides the fact that it is in the works and that it’s going to debut in 2023.

The future of the U.S. EV market hangs in the balance

President Biden has until Sunday to intervene in a dispute between two major South Korean battery producers over the fate of lithium-ion battery factories in Georgia. His decision carries major implications for plans of US automakers to produce new EVs over the coming years. The outcome threatens Biden’s EV goals for the United States and the Democratic Party’s fragile success in the key state.

The battle of two South Korean Corporations

SK Innovation has built a large battery factory northeast of Atlanta, in the city of Commerce, with another factory alongside it being under construction, and a third in the works. But, earlier this year, SK said its operations in Georgia may be shut down due to a ruling by the U.S. International Trade Commission of its dispute with LG Chem. Despite a deep political division in the state, Democrats and Republicans have found common ground in trying to save the factories. The stakes are high as letting the ruling stand could damage the Democratic Party’s credibility in Georgia and hobble a key supplier in a domestic EV market already hungry for batteries. On the other hand, vetoing the decision would call into question the administration’s global efforts to advance intellectual property protections, which is a major priority from an economic perspective.

The Detroit battle lines are clearly drawn

For the needs of its electric pickup F-150 which is due next year, Ford has contracted with SK Innovation which has been accused of destroying evidence in a case alleging stolen trade secrets. SK threatened to withdraw its battery business from the U.S. altogether if Biden doesn’t overturn the decision, which would leave Ford Motor (NYSE: F) and Volkswagen with diminished bargaining power with remaining suppliers.

On the other end, General Motors Co. (NYSE: GM) has a joint venture with at least one more planned with LG Chem. In addition to GM, some of LG’s major clients include Tesla Inc. and Hyundai Motor Company (OTC: HYMTF).

A tough decision to make

Now it’s up to the Biden administration to decide whether to get involved. This situation illustrates the fragility of U.S. automakers’ battery supply chains as traditional automakers are investing heavily in their EV infrastructure but remain reliant on Asian suppliers to provide the energy to power their EVs. President Biden needs to find a way not to condone unfair trade practices but support policies that will support the United States in becoming a leader in the EV market while simultaneously reducing carbon emissions.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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