Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.
From the hotly-debated high-flier Tesla (TSLA), Wall Street’s newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM(GM) and Ford (F) to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with “Charged,” a weekly recap of the top stories and expert calls in the sector.
CHINESE PARTS: Tesla plans to resume shipping components from China to the U.S. for the production of Cybercab and Semi trucks at the end of May after the U.S. and China reached a truce over tariffs, Reuters’ reports, citing a person with direct knowledge of the matter. Tesla previously suspended plans to ship the components after U.S. President Donald Trump raised tariffs on Chinese goods to 145%, potentially disrupting Tesla’s plan to start mass production of the much-anticipated models.
NEW PAY DEAL FOR MUSK: Tesla’s board has formed a special committee to explore CEO Elon Musk’s pay which could lead to Musk being offered a new package of stock options as it seeks to resolve uncertainty over his future, The Financial Times’ Stephen Morris and Tabby Kinder report. The committee comprises chair Robyn Denholm and Kathleen Wilson-Thompson, according to several people familiar with the matter. The committee will also explore alternative ways to compensate Musk for past work should Tesla fail to reinstate his record 2018 pay deal via an appeal at the Delaware Supreme Court this year, the report says.
WORSE BEFORE BETTER: Morgan Stanley says investors “struggle to justify the value of Tesla as much as ever before” nearly 15 years after the company went public, adding that the firm expects this “valuation ‘problem’ gets worse before it gets better.” Most investors value Tesla’s core auto business at between $50 and $100 per share, then “they put their pens down,” but stopping there is “akin to valuing Amazon (AMZN) as solely an online retailer or Apple (AAPL) as a seller of glowing rectangles and earbuds,” the firm argues. By the mid-2030s, Morgan Stanley forecasts Tesla’s installed base to approach 50M units and estimates that each $100/month of ARPU generated by this installed base for autonomy, charging, connectivity, upgrades, content, used sales, parts/service, and licensing is worth $80 to $100 per share. The energy storage business is Tesla’s “fastest growing and highest margin hardware business at present,” adds that firm, which values Tesla Energy at $67 per share. While Morgan Stanley says it currently does not include a valuation for Tesla Optimus in either its base or bull case, it estimates that every 1% substitution by humanoid of human labor is worth greater than $300B, or around $100 per Tesla share. The firm has an Overweight rating and $410 price target on Tesla, adding that “the majority of the company’s current $1.1tn market cap is based on businesses that have either poor disclosure, no disclosure, or that have yet to be launched into the commercial market at all.”
BULLISH ON TESLA: Cantor Fitzgerald says the firm remains “bullish” on Tesla ahead of several material near-term potential catalysts, telling investors that the firm is encouraged by management’s reaffirmation of the launch of the Robotaxi in Texas in June and the introduction of a lower-priced vehicle in the first half of 2025, which could be timely given the likely negative impact to vehicle prices due to tariff implementation and the likely removal of the tax credit. Cantor, which has an Overweight rating and $355 price target on the shares, is “encouraged” by Musk’s commentary that his “time at DOGE will be significantly reduced” starting this month. The firm believes Tesla is better positioned to mitigate the impact from tariffs.
CHINA SALES: Sales of new Tesla vehicles in China dropped 58% from the previous week and 69% year-over-year during the week of May 5 to 11, the lowest level since January, EV’s Claudio Afonso reports. According to insurance registration data shared on Chinese social media on Tuesday, Tesla sold 3,070 vehicles last week, including 1,300 units of the refreshed Model Y and 1,800 Model 3s.
Click here to check out Tesla’s recent Media Buzz Sentiment as measured by TipRanks.
MOVING TO RIVIAN SIDELINES: Jefferies downgraded Rivian to Hold from Buy with an unchanged $16 price target. The company’s Q1 results were helped by the new accounting of previously received funds, but the management also demonstrated further progress in driving down R1 variable unit costs, the firm tells investors in a research note. Jefferies remains positive on Rivian’s investment story but also cautious on the downbeat demand outlook this year as it waits for updates on R2 progress.
HOUSE BILL: JPMorgan says the House Ways and Means Committee has released details for its portion of the budget reconciliation bill, including updates for the Inflation Reduction Act. The text aligns with, or exceeds, the more bullish end of investor expectations for providers solar, wind, storage, and geothermal, the firm tells investors in a research note. JPMorgan says point out the Production Tax Credit and Investment Tax Credit were truncated from existing definitions, though credits are unchanged through 2028 and then gradually phase down until 2032, and include foreign entity of concern language for the first time one year following passage of the bill. Limitations on products from prohibited foreign-influenced entities is a “significant positive” for First Solar (FSLR) given 60% of estimated earnings over the next two years are generated by 45x credits, contends the firm. It also believes the proposal is a positive for Array Technologies (ARRY), Nextracker (NXT), Enphase Energy (ENPH), and SolarEdge (SEDG). JPMorgan also highlights the 45u nuclear credit phase down in the bill, which it views as a modest negative for GE Vernova’s (GEV) small modular reactor business.
BUY FIRST SOLAR: Wolfe Research upgraded First Solar to Outperform from Peer Perform with a $221 price target. The firm cites better clarity on 45X credits for the first time since election year politics started in early 2024 for the upgrade. While the proposed rules shorten the 45X runway by a year, First Solar stands to earn $10B from 45X, or $92 per share, the firm tells investors in a research note. Wolfe believes the company’s “domestic moat remains well intact” as the only domestic solar module manufacturer of scale. It points out First Solar doesn’t rely on foreign components such as cells or wafers. The House Ways & Means bill’s proposed Foreign Entity of Concern restrictions are relatively strict and another good signal that it will be tough for Chinese manufacturers to compete in the U.S., further strengthening First Solar’ competitive positioning, Wolfe adds.
SELL ENPHASE: BMO Capital downgraded Enphase Energy to Underperform from Market Perform with a price target of $39, down from $46, following the release of the House Ways and Means Committee tax plan. The plan, if adopted, will eliminate the Section 25D Residential Clean Energy Credit for homeowners who take loans or pay cash for their residential solar and battery systems at the end of 2025 and the firm believes elimination of the 25D credit impacts Enphase “disproportionately,” the analyst tells investors. This would shrink the overall demand for U.S. residential solar in 2026, further contributing to Enphase’s loss of market share, BMO argues.
Barclays also double downgraded Enphase Energy to Underweight from Overweight with a price target of $40, down from $51. The firm says the possible repeal of Section 25D “has flown under the radar and is now taking a bite out of ENPH.” Section 25D enables individual homeowners to claim the 30% tax credit for solar energy and storage installations, Barclays tells investors in a research note. The firm says that as Enphase has been dominant in the non-third-party ownership market and its market share is on the weaker side in the TPO market, the elimination of this tax credit negatively impacts the company’s outlook. The residential solar market will likely evolve into over 90% third-party ownership starting next year if Section 25D is repealed, predicts Barclays. It estimates Sunrun (RUN) is the largest third-party owner, followed by Sunnova Energy (NOVA).
BEARISH ON SOLAREDGE: Northland downgraded SolarEdge to Underperform from Market Perform with an unchanged price target of $15.50. Shares are “up a lot” since April 25 with the company in the midst of a turnaround in a difficult macro environment with uncertainty in U.S. tax policy as well as tariff uncertainty, notes the firm. While tariff risk is diminished, it has “not gone way,” adds the Northland, which lowered its rating due to valuation.
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