Electric vehicle (EV) news continues to make headlines.
In fact, here are some EV news stories from this week alone:
- Elon Musk predicted that Tesla, Inc.’s (TSLA) self-driving cars will arrive this year…
- Hyundai Motor Company (HYMTF) overtook General Motors Company (GM) in U.S. sales of electric vehicles…
- and Toyota Motor Corporation (TM) said that it made a technological breakthrough that will cut the weight, size and cost of batteries in half. (More on this later.)
I’ve also written a fair amount about electric vehicles lately, too.
Last month, I spoke about how some EV companies, like Tesla, are lowering prices in order to stay on the road. And last week, I recounted a few battery issues that some EV makers have been facing.
In today’s Market 360, I want to share recent successes achieved by some EV makers. Then, I’ll share what I expect to steal the headlines next.
So, let’s dive in…
Positive June Production Results
This past Sunday, June 2, Tesla announced its vehicle production and delivery results for the second quarter of 2023.
And the results were impressive.
In the second quarter, the company produced nearly 480,000 vehicles and sales surged 83% to 466,000 vehicles.
Analysts expected Tesla to report deliveries of 445,924 for the period ending on June 30, 2023, so the numbers beat analysts’ expectations. However, these numbers do mark the fifth period in a row of the company producing more vehicles than they deliver.
The bottom line is, it’s fair to say that the company’s price cuts definitely seem to be stimulating its overall sales.
NIO Inc. (NIO), the “Tesla of China,” also reported its June and second quarter 2023 delivery updates over the weekend. NIO delivered 10,707 vehicles in June 2023, up 74% month-over-month but down 17.4% year-over-year. June’s deliveries were made up of 6,383 premium smart electric SUVs, and 4,324 premium smart electric sedans.
For the second quarter, NIO delivered 23,520 vehicles, and total deliveries as of June 30, 2023, reached 344,117.
And lastly, BYD Company Limited (BYDDY), Tesla’s top worldwide rival based in China announced that sales soared 98% to 700,244 in the second quarter of 2023. BYD sold 352,163 EVs in the second quarter and the rest of its sales were hybrid vehicles. I should add that BYD’s sales have been boosted by its city car Seagull model, which costs only $11,000 and has 251 miles of range.
BYD is also making its own iron-phosphate (LFP) batteries, which are used in its vehicles and energy storage. Most of Tesla’s Chinese-made electric vehicles also use LFP batteries, which are substantially cheaper than lithium-ion batteries. So, it is very clear to me that companies have to switch to LFP batteries on less expensive models to win the EV price wars. Ford Motor Company (F) and Volkswagen Group (VWAGY) are also making this switch, so it will be interesting if their market share will rise with cheaper EV models in the upcoming quarters.
Speaking of batteries… Keiji Kaita, the president of Toyota’s research and development center for carbon neutrality, said, “For both our liquid and solid-state batteries, we are aiming to drastically change the situation where current batteries are too big, heavy and expensive.” Kaita added that “in terms of potential, we will aim to halve all of these factors.”
Toyota initially said that it wanted to start selling hybrid cars with solid-state batteries before 2025. Kaita said that Toyota discovered ways to address the durability problems from about three years ago and now has enough confidence to mass produce solid-state batteries in EVs by 2027 or 2028. Panasonic (PCRFY) is working with Toyota on solid-state batteries and is expected to be a major winner if Toyota leads the adoption of solid-state batteries in hybrids and EVs.
Stay Tuned for Earnings Season
EV companies may have garnered their fair share of attention this week, but I don’t expect the same next week. Instead, I believe the second-quarter earnings season grab more headlines next week.
Next Friday, the second-quarter earnings season will kick off with the Big Banks. We’ll take a more in-depth look at the coming earnings season next week, but I’ll say now that the analyst community isn’t very optimistic. According to FactSet, second-quarter S&P 500 earnings are currently forecast to decline an average 6.8% and revenue is expected to slip 0.4%.
So, I recommend that you focus on fundamentally superior stocks, like those found in my Growth Investor Buy Lists. My Growth Investor stocks are set to continue to grow their sales and earnings momentum as we head into the second-quarter earnings season.
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Sincerely,
Louis Navellier
