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The Zacks Analyst Blog Highlights: Tesla, Hyliion Holdings, Arcimoto, Ford and General Motors

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Zacks Equity Research
·8 min read
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For Immediate Release

Chicago, IL – January 29, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Tesla, Inc. TSLA, Hyliion Holdings Corp. HYLN, Arcimoto, Inc. FUV, Ford Motor Company F and General Motors Company GM.

Here are highlights from Thursday’s Analyst Blog:

Biden's Big EV Pledge Puts Spotlight on These Automakers

An electric vehicle (EV) in every driveway! The idea may have seemed a bit far-fetched a couple of years back but not now. Of late, amid heightening climate concerns and technological advancements, automakers have been going the extra mile to change gears to the electric mode and come up with various new EV offerings. The EV industry — which is one of the hottest at the moment — is set to get a leg up, thanks to the Biden presidency. 

As we know, the 46th President of the United States has made climate change the utmost priority of his administration and is highly optimistic about the power of green vehicles to battle the growing climate concerns. Two days back, Biden pledged to phase out the U.S. government's vehicle fleet — including cars, trucks and sports utility vehicles — and swap it with clean EVs made in America, in line with his promise of creating more than 1 million new jobs in the auto sector as well as the zero-emission target.

EV Industry Finds a Friend in Biden Administration

Per the General Services Administration Report, the U.S. government had more than 645,000 vehicles in its fleet as of 2019, of which 224,000 comprised passenger vehicles. Per the agency, just around 3,200 units of the U.S. government vehicles were electric as of July 2020. The transition of the entire government fleet to EVs is set to provide huge opportunities to pure-play EV makers including Tesla, Hyliion Holdings, Arcimoto as well legacy automakers like Ford and General Motors that are pouring billions of dollars to rev up their e-mobility game.

While the details and timetable of the President's plan have not been disclosed yet, the EV industry will gain further momentum, with green vehicle stocks set to remain the darlings of Wall Street.

Biden aims to utilize all levers of the federal government to position America as the leading manufacturer of electric vehicles. The President has taken steps to undo Trump's rollback of Obama-era emission standards. He has ordered several agencies to revisit vehicle emission rules and is likely to overhaul fuel economy and emission norms, thereby pushing automakers to reduce their dependence on fossil fuels as well as speed up their transition to all-electric cars.    

With the President going all in on EVs, he plans to spend billions on designing an infrastructure that is conducive to the rising adoption of green vehicles. As such, Biden has promised to deploy 550,000 new EV charging stations in the United States by 2030-end. Biden's 'Build Back Better' plan is likely to boost the development of EV technology. He has also promised rebates and incentives for customers who would replace gas-powered cars to EVs.

Part of Biden's big push toward clean energy is to expand tax incentives for the same, including restoration of the full federal tax credit for EV purchases. He is in support of the $7,500 federal tax credit for green cars, and open to rev up consumer EV tax credits and incentives domestically to enable no-emission vehicles to go mainstream.

While the current system has drawn flak for offering tax credits for buying expensive EVs, the new framework will seek to emphasize on middle-class consumers so as to popularize green vehicles to a greater extent.

All in all, the U.S. EV narrative is set to take a major leap under Biden's leadership on the back of ambitious fuel targets, consumer tax credits, along with stimulus and policies to bolster EV sales, thereby pushing the economy to a more renewable future. Amid the encouraging scenario, we highlight four EV stocks that deserve your attention.

4 Stocks to Keep on Your Radar

Ford: Ford's big push toward the development of electric vehicles is truly commendable. The U.S. auto biggie has vowed to become carbon free by 2050 and is making considerable strides toward achieving this target. Last November, Ford announced a decision to build its all-new E-Transit van at the Kansas City Assembly Plant, in sync with investment plans of $3.2 billion in North American manufacturing facilities.

In total, Ford is committed to spend more than $11.5 billion in EVs through 2022 by introducing zero-emission versions of some of the company's popular vehicles including Mustang Mach-E, Transit Commercial EV and fully-electric F-150. Ford's alliance with Volkswagen is likely to accelerate the execution of its EV strategy.

Via collaboration with Electrify America, the firm's FordPass Charging Network provides access to DC fast chargers. This Zacks Rank #1 (Strong Buy) firm has long-term expected EPS growth of 7.8%. You can see the complete list of today's Zacks #1 Rank stocks here.

Tesla: With Model 3 sedan being its flagship vehicle, Tesla has established itself as a leader in the EV segment. It has a first-mover advantage in the EV space with high range vehicles, superior technology and software edge. Robust Model 3 demand, ramp up of Model Y production, significant Shanghai Gigafactory progress, amazing line-up of upcoming products and aggressive expansion efforts bode well for this Zacks Rank #3 (Hold) firm.

The EV behemoth almost met the vehicle delivery target of 500,000 units in 2020 and is set to witness massive uptick in deliveries, going forward. The firm anticipates achieving 50% average annual growth in vehicle deliveries over a multi-year horizon. Tesla has long-term expected EPS growth of 37.5%.

General Motors: This legacy automaker is pulling out all the stops to demonstrate its EV efficiency. It has adopted an "all-in" electrification strategy, whereby it will gain a competitive edge in batteries, software, vehicle integration, manufacturing and customer experience to make EVs the key catalyst for boosting the company's profitability.

The firm is expediting plans to roll out electric cars and trucks over the next five years, and projects to spend $27 billion by 2025 on the initiative. It is slated to unveil 30 EVs by 2025, two-thirds of which will be available in North America. Strategic collaborations with Honda and EVgo bode well.

The Ultium modular battery platform and the launch of a business unit — BrightDrop — has taken General Motors' EV game a notch higher. This Zacks Rank #3 firm has long-term expected EPS growth of 9.9%.

Arcimoto: This maker of specialty electric three-wheeled vehicles is indeed carving out a niche for itself, while offering smaller and efficient electric transportation solutions. The firm's five different product lines including its flagship "FUV," Deliverator, Rapid Responder, Cameo and Roadster cater to different niches.

The stylish "FUV," Deliverator and Rapid Responder are available for preorder. Deliveries of the Arcimoto Roadster, designed to be the ultimate on-road fun machine, are anticipated in late 2021. The Cameo — designed for the film and influencer industry — is in the planning stage.

While Arcimoto has yet to prove its mettle, the firm's future product lineup is interesting and the balance sheet is healthier than many other new EV companies. This Zacks Rank #3 firm has a long-term expected EPS growth rate of 25%.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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