EV Roundup: F & STLA's Electrification Strides Hit Headlines
The electric vehicle (EV) revolution is speeding up, with traditional automakers leaving no stone unturned to establish a strong foothold in this domain. Last week, Ford F revealed a fully electric Explorer SUV exclusively for its Europe market to progress toward making its entire Europe lineup electric by 2030. It also announced plans to manufacture its next-generation electric truck, 'Project T3', at n the BlueOval City Plant, beginning in 2025. Stellantis STLA is also revving up its EV game. As part of its Dare Forward 2030 strategy, the company is set to invest EUR 130 million in its Eisenach Assembly Plant to kick off the production of the new battery-powered EV.
Meanwhile, China-based EV makers NIO Inc. NIO and BYD Co. Ltd BYDDY also made the news. While NIO is confident about doubling its 2023 sales on a year-over-year basis, BYDDY reduced shifts at two of its plants— Xian and Shenzhen.
While BYDDY currently carries a Zacks Rank #2 (Buy), STLA, F and NIO are #3 (Hold), #4 (Sell) and #5 (Strong Sell) Ranked, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recap of Last Week’s Important News
Ford unveiled its mid-sized electric Explorer SUV, a remake of its iconic and best-selling Explorer SUV.The new 5-seater electric SUV has a futuristic design. With its advanced driving assistance technology, movable touchscreen and nearly 470 liters of storage capacity, it is well-equipped for family road trips. With the launch of the new Explorer SUV, Ford has moved closer to its target of making its entire Europe lineup electric by 2030.
In another development, Ford announced that its EV and battery manufacturing campus in BlueOval, West TN, is all set to start production of EVs in 2025. It stated plans to manufacture its next-generation electric truck, code-named Project T3, on campus. At its full capacity, the campus will produce 500,000 EV trucks per year. “Project T3 is a once-in-a-lifetime opportunity to revolutionize America’s truck. We are melding 100 years of Ford truck know-how with a world-class EV, software and aerodynamics talent. It will be a platform for endless innovation and capability,” said Jim Farley, CEO of Ford, in a release.
Ford and South Korean battery supplier SK On are investing $5.6 billion in the campus, which will be F’s first carbon-neutral vehicle manufacturing facility. The new production facility will have a 30% smaller general assembly footprint than its existing counterparts while maintaining higher production capacity. The BlueOval plant is Ford’s important step toward scaling its EV production and making them accessible to customers. By late 2026, Ford plans to produce 2 million EVs per year, which aligns with the company’s target of achieving an 8% EBIT margin for Model e EV business.
Stellantis announced to invest EUR 130 million in its Eisenach Assembly Plant. Currently, the plant produces Stellantis’ Opel Grandland plug-in electric hybrid compact SUV. With the investment in additional capacity, the auto manufacturer will start production of Opel’s BEV successor on its all-new STLA Medium Platform. Production is expected to begin in the second half of 2024. Expansion of the existing capacity of Eisenach Assembly Plant, located in Thuringia, Central Germany, supports Opel’s commitment to turning its entire product lineup in Europe fully electric by 2028.
As part of its Dare Forward 2030 strategy, Stellantis aims to achieve a significant EV sales mix in Europe, the United States and Brazil by the end of the decade. All these investments will help the automotive manufacturer slash its carbon footprint by half by 2030 from 2021 and achieve carbon neutrality by 2038. The core objective of Dare Forward 2030 is to achieve 100% of total passenger car sales in Europe and 50% of light-duty truck and passenger car sales in the United States as battery EVs by the end of the decade.
If Stellantis succeeds in achieving the given target, it has a higher possibility of doubling its revenues by 2030 compared to the start of the decade, maintaining double-digit adjusted operating margins throughout the decade and becoming number one in providing exceptional products and services in every market by 2030. By 2025, Stellantis plans to invest a total of EUR 30 billion in electrification technology to provide best-in-class BEVs to its customers.
NIO expects its 2023 sales to double from last year levels, thanks to expanded product lineup. The company’s CFO Steven Fend said, “"We are very confident to achieve our sales target in 2023. The company hopes to achieve the target with new models, expanding its charging and battery-swapping network, and unlocking autonomous driving technologies."
The company expects sales in 2023 to reach 250,000 units. NIO expanded its product lineup to six models last year and expects to add another three by the end of this year. In addition to new EV models, the company’s charging and battery swap network and driverless technology are likely to fuel sales. On the latest earnings call, NIO notified that so far it had deployed 1,331 swap stations. Encouragingly, it is expected to increase the total number of battery-swap stations to more than 3,000 by 2023-end.
China’s intense push for EV vehicles is a major booster for NIO. ES6, ES8 and EC6 models are enhancing the firm’s prospects. The firm’s latest offerings based on the NIO Technology Platform 2.0 — including EL7, ET5 and ET7 models — will further drive deliveries. NIO's 2022 deliveries were 122,486 vehicles, up 34%. The firm expects first-quarter deliveries to witness a year-over-year uptick of 20.3-28.1%. Revenues are envisioned between $1,584 million and $1,674 million, indicating a year-over-year increase of 10.2-16.5%. NIO seems well-positioned to cement a strong long-term foothold in the rapidly growing EV industry.
BYD reduced shifts at two EV assembly plants — Xian and Shenzhen — in China. While the company did not provide any reason for that, it is speculated that the China-based automaker has been cutting production in the face of weaker demand in the country since the beginning of 2023. Reportedly, shifts at the Shenzhen plant — which manufactures Han sedans — were lowered from three/day to two/day. Meanwhile, the company had asked employees at its biggest manufacturing hub — Xian plant— to work only four days a week, running two eight-hour shifts/day.
In the wake of rising competition and declining consumers’ appetite for high-ticket price items, BYD started offering discounts. Last month, BYD sold 191,664 passenger plug-in cars, skyrocketing 119% year over year. With that, it was the best February ever for the company in terms of unit sales. Both all-electric and plug-in hybrid vehicles witnessed triple-digit sales growth on a year-over-year basis.
In the first two months of 2023, BYD’s total sales, including exports and those to dealers, surged 89% year over year. However, per the data from China Merchants Bank International, retail sales witnessed a relatively slower growth of 66%. In a bid to boost demand, BYD started offering discounts for its best-selling Yuan Plus and Seal EVs this month. The firm also unveiled revamped versions of its Han sedan and Tang crossover.
Price Performance
The following table shows the price movement of some of the major EV players over the last week and six-month period.
Image Source: Zacks Investment Research
What’s Next in the Space?
Stay tuned for announcements of upcoming EV models and any important updates from the red-hot industry.
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