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EV Roundup: TSLA Q4 Earnings, HMC E-Mobility Business Unit & More

Electric vehicle (EV) behemoth Tesla TSLA delivered yet another blockbuster show, with fourth-quarter earnings and revenues not just topping estimates but increasing year over year. Japan’s auto biggie Honda HMC announced making structural changes to ramp up the electrification business. It also joined forces with GS Yuasa Corp to work toward the R&D and production of lithium-ion batteries. Canoo GOEV, a high-tech Californian EV startup, teamed up with GCC Olayan to foster its EV presence in the growing sustainable mobility market of Saudi Arabia. Fuel cell truck startup Nikola NKLA collaborated with green energy and technology company, Fortescue Future Industries, for large-scale green hydrogen production projects in the United States. EV charging company Blink Charging BLNK also made to the top stories as it inked deals with EdgeEnergy and Vizient.

While Tesla carries a Zacks Rank #5 (Strong Sell), Nikola holds a Zacks Rank #2 (Buy). Honda, Blink Charging and Canoo are currently #3 Ranked (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Let’s Delve Deeper

Tesla reported fourth-quarter 2022 earnings of $1.19 a share, up from the year-ago figure of 85 cents and surpassing the Zacks Consensus Estimate of $1.09. This marked an earnings beat for the eighth time in a row. Higher-than-expected revenues from Energy Generation/Storage and Services/Other segments resulted in this outperformance. Our estimate for the bottom line was 83 cents a share. Total revenues came in at $24,318 million, witnessing year-over-year growth of 37.2%. The top line also crossed the consensus mark of $23,729 million. Our estimate for revenues was $22,404 million. Tesla reported an overall gross margin of 23.8% for the reported quarter. The operating margin came in at 16%.

Management sticks to its target of around 50% growth in deliveries in the foreseeable future. For 2023, it expects deliveries to reach 1.8 million units. Operating expenses totaled $1,876 million in the reported quarter, down from $2,234 million incurred in the corresponding period of 2021.Tesla had cash and cash equivalents of $22,185 million as of Dec 31, 2022, compared with $17,707 million on Dec 31, 2021. Net cash provided by operating activities amounted to $3,278 million in fourth-quarter 2022, declining 28.5% year over year. Its capital expenditure totaled $1,858 million, compared with $1,810 million recorded in fourth-quarter 2021.

Tesla generated free cash flow of $1,420 million during the reported quarter, which declined 48.8% year over year. Long-term debt and finance leases, net of current portion, totaled $1,597 million, down from $5,245 million as of Dec 31, 2021.

Honda announced organizational and operational changes effective from Apr 1, 2023. Additionally, it will reinforce the organizational changes made last year. The strategic changes would help the company to keep up with the pace of American and European rivals in the EV market. The auto giant has bucked up to create a new division to inch closer to its carbon neutrality objective by 2050. It is trying to boost its electrification business with its expanding range of products and services. Honda plans to combine its six regional operations into three, namely, North America, China, and Associated regions. The Associated regions will include Japan, Asia & Oceania, South America and EMEA regions.

The newly created Electrification Business Development Operations will strengthen the business strategy and Battery EV product development functions of Honda’s auto, motorcycle, and power products businesses to rev up its electrification game. The Corporate Strategy Operations will aid Honda’s initiatives to formulate, execute and communicate its corporate strategies, while the Corporate Administration Operations will optimize corporate resources in line with its corporate strategy.

In a separate news, Honda announced a collaboration with Japanese battery maker GS Yuasa to work together on the  research and development of high-capacity lithium-ion batteries, starting from the end of 2023. Both companies will work toward the establishment and management of intellectual properties, planning products that utilize technologies, designing efficient production operations, and establishing a supply chain for key raw materials.

Canoo signed an agreement with GCC Olayan for the exclusive distribution of its EVs in Saudi Arabia. The first phase of the agreement includes the sale, distribution, service maintenance, and repair of Canoo vehicles. Moreover, Canoo and GCC intend to develop a joint venture to launch a digital vehicle ecosystem for service maintenance repair and local assembly. They eventually plan to set up a manufacturing facility in Saudi Arabia.

Saudi Arabia has embarked on a journey toward a sustainable future and launched Saudi Green Initiative, under which it pledges to achieve net zero by 2060. The initiative made the country a mushrooming EV market. It would be interesting to see how Canoo, with its breakthrough electric vehicles, plays with the plethora of opportunities the Saudi EV market has to offer. Quoting Al-Harethi— the CEO of OSHCO— “the new partnership will combine GCC Olayan’s over 75 years of experience in the automotive and adjacent sectors with Canoo’s innovative electric vehicle technology to cater to this need in the market and contribute to global efforts to tackle carbon emissions as well as to Saudi Vision 2030’s sustainability goals.”

After experiencing a rough patch in 2022, Canoo is striving to ramp up the production of both vehicles (namely Lifestyle Vehicle and its cargo variant Lifestyle Delivery Vehicle) and battery modules. While one of the production deals with the Dutch automotive manufacturing company VDL blew up, Canoo still has a strong inflow of orders from Walmart, Zeeba and Kingbee. These order inflows are making the future of the EV startup appear a little stable, notwithstanding the financial challenges being faced by the company.

Nikola and Fortescue Future have signed a memorandum of understanding for the joint development of large-scale U.S. green hydrogen production facilities. The partnership seeks to ramp up green hydrogen production in the United States for fuel cell trucks. Per the deal, Nikola will be engaged in the evaluation of green hydrogen offtake opportunities from green hydrogen projects being pursued by Fortescue Future. The companies will also collaborate on new green hydrogen production and related infrastructure projects.

In another development, Nikola notified that it would deliver 100 Class 8, heavy-duty Nikola Tre FCEVs to Germany-based transportation and logistics fleet operator GP JOULE. The Nikola Tre FCEVs will be built by Nikola and its joint venture partner IVECO at a factory in Ulm, Germany. Of the total order, 30 Nikola Tre FCEVs will be delivered within 2024. The remaining 70 vehicles will be delivered in 2025. Beginning 2026, GP JOULE and Iveco Group intend to market additional FCEVs to European customers.

Additionally, Nikola announced that 15 Nikola Tre FCEVs will be delivered to California logistics company Biagi Bros in the fourth quarter of 2023. Biagi Bros. has completed the testing of Nikola Tre FCEV and is satisfied with the vehicle’s performance. The order of 15 Nikola Tre FCEVs is in line with Biagi Bros’ target to electrify its fleet.

Blink inked a deal with EdgeEnergy, a power conversion equipment provider for EV charging solutions. Through this deal, Blink aims to deploy EdgeEnergy’s proprietary technology, EdgeEV, for its fast chargers. Blink will also participate in the sales and distribution of EdgeEV. Contrary to the battery-dependent solution, this patented technology has been built to provide uninterrupted on-demand power to the ultra-fast charging station. The EdgeEV will help Blink eliminate grid connection constraints and provide it with sufficient power infrastructure at a less cost and faster timeline.

Brendan Jones, President of Blink said, “We are excited to work with EdgeEnergy to implement this technology and be able to eliminate the concern about 3-phase power availability. With EdgeEnergy’s technology, we will be able to deploy more of our ultra-fast charging stations, more quickly, even without 3-phase.”

Blink has also signed National Supplier Agreement with a healthcare performance improvement company, Vizient. With a diverse membership and customer base, Vizient opens doors of opportunity for the marketing and deployment of Blink charging stations. Blink's competitive hardware costs, flexible business models, and commitment to customer service will provide Vizient members access to Blink’s host-owned, Blink-as-a-service business models and EV fast-charging technology at a negotiated price to meet the changing needs and challenges faced by members.

Price Performance

The following table shows the price movement of some of the major EV players over the last week and six-month period.

Zacks Investment Research
Zacks Investment Research

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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Honda Motor Co., Ltd. (HMC) : Free Stock Analysis Report

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Canoo Inc. (GOEV) : Free Stock Analysis Report

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