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EV Roundup: TSLA's Solid Q4 Show, GM's Big Electrification Bet & More

·5 min read

With the electric vehicle (EV) revolution gathering pace with each passing day, legacy automakers are stepping up e-mobility investments and setting ambitious targets to electrify their fleet. Last week, General Motors GM announced a $7-billion outlay to boost its foothold in the EV space, which marks the single largest investment announcement in the company’s history. The expenditure is part of the $35-billion plan to uplift GM’s North American production capacity to build 1 million EVs by 2025.

The world’s largest automotive alliance between Renault SA RNLSY, Nissan Motor Co. NSANY and Mitsubishi Motors announced a €23-billion investment plan to transform toward e-mobility future. The two-decade-old prestigious alliance laid out its 2030 roadmap with shared projects and actions that include the goal of launching 35 new EV models across the three brands by 2030.

Meanwhile, EV leader Tesla TSLA reported stellar fourth-quarter 2021 results, outpacing both top- and bottom-line expectations. Earnings of $2.54 per share easily beat the Zacks Consensus Estimate of $2.11, while $17.72 billion in quarterly sales swept past the expectation of $16.07 billion. After a rough patch in its earnings history a couple years ago, Tesla has beaten expectations in nine of the last 10 quarters.

Volkswagen’s VWAGY luxury brand Lamborghini’s decision to discard pure internal combustion engine (ICE) cars starting next year also made it to the headlines.

Top Stories of the Week

1. Tesla reported fourth-quarter 2021 earnings of $2.54, which surpassed the Zacks Consensus Estimate of $2.11. A higher-than-expected automotive gross profit resulted in this outperformance. Precisely, automotive gross profit came in at $4,882 million, topping the consensus mark of $4,254 million. The bottom line also compared favorably with the year-ago earnings of 80 cents a share. Total revenues came in at $17,719 million, beating the consensus mark of $16,070 million. The top line also witnessed year-over-year growth of 65%.

Tesla generated free cash flow of $2,775 million during the quarter, up 48.5% year on year. TSLA had cash and cash equivalents of $17,576 million as of Dec 31, 2021 compared with $16,065 million on Sep 30, 2021. Long-term debt and finance leases — net of current portion on Dec 31, 2021 — totaled $5,245 million, down from $6,438 million on Sep 30, 2021. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

2. General Motors announced an investment plan of more than $7 billion in four Michigan manufacturing sites, which will create 4,000 new jobs and retain 1,000. The investment, spread through 2024, is aimed at boosting electric pickup-truck production and building a new EV battery cell plant. GM will invest $4 billion in the Orion Assembly to produce Chevrolet Silverado EV and electric GMC Sierra. The main aim will be to convert the facility to produce EVs using the GM-developed Ultium Platform.

GM and LG Energy Solution, via its Ultium Cells LLC joint venture, will invest $2.6 billion to build Ultium Cells' third U.S. battery cell manufacturing plant at the Lansing site. The battery cell production is scheduled to begin in late 2024. General Motors is also investing an additional $510 million in two Lansing-area vehicle-assembly plants. It will make investments for the production of the next-generation Chevrolet Traverse and Buick Enclave, as part of building the Lansing Delta Township Assembly. Lastly, it is investing in plant upgrades under the Lansing Grand River Assembly.

3. The Renault Nissan Mitsubishi Alliance will undertake a €23-billion (nearly $26 billion) investment in the next five years to transform to a carbon-neutral business. The alliance intends to launch 35 new EV models across the three brands by 2030. The upcoming EVs will be majorly supported by five common platforms, namely CMF-AEV, KEI-EV, LCV-EV, CMF-EV, and CMF-BEV, with each covering a different vehicle segment in the market. The companies noted that the common platform network is set to grow from 60% to more than 80% by 2026.

The Renault-Nissan-Mitsubishi Alliance seeks to achieve real scale and affordability, thus making battery cost reduction by 50% in 2026 and 65% by 2028. The Alliance also shares a common goal for all-solid-state battery technology. It is also focused on getting nearly 25 million vehicles connected to the Alliance Cloud by 2026, indicating a sharp jump from the 3 million connected vehicles presently. For details read: Renault Nissan Mitsubishi Alliance to Break Ground in EV Space

4. Volkswagen’s (VWAGY) Lamborghini announced that 2022 would be its last year of offering pure ICE vehicles. Starting next year, the sports car maker will switch its lineup to vehicles integrated with electric motors, beginning with hybrids and plug-in hybrids. It will introduce its first plug-in hybrid car next year. Lamborghini has invested 1.5 billion euros ($1.7 billion) for facilitating its transition to plug-in hybrids.

Lamborghini is geared up to introduce four new models as it moves to electrify its lineup. VWAGY’s luxury brand is set to unveil Aventador hybrid in 2023, which would be followed by Urus plug-in hybrid in 2024 and Huracán hybrid in 2025. The automaker has also confirmed plans to offer its first full EV in the second half of the decade, which is likely to be a four-door model suited for daily use.

Price Performance

The following table shows the price movement of some of the major pure-play EV companies over the past week and six-month period.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

What’s Next in the EV Space?

Stay tuned for announcements of upcoming EV models and any important updates from the red-hot industry.


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Nissan Motor Co. (NSANY) : Free Stock Analysis Report

General Motors Company (GM) : Free Stock Analysis Report

Tesla, Inc. (TSLA) : Free Stock Analysis Report

RENAULT (RNLSY) : Free Stock Analysis Report

Volkswagen AG Unsponsored ADR (VWAGY) : Free Stock Analysis Report

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