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EV Roundup: STLA's Pact With CTR, MZDAY's Carbon Neutrality Pledge & More

The electric vehicle (EV) revolution is speeding up, with companies leaving no stone unturned to establish a strong foothold in this domain. Legacy automakers are stepping up e-mobility investment and setting ambitious targets to electrify their fleet. Last week, Stellantis N.V. STLA inked a deal with a lithium resource producer to procure the metal’s supply for its green cars. Meanwhile, Mazda Motor Corporation MZDAY promised to make all its factories carbon neutral by 2035. China-based EV players NIO Inc. NIO, Li Auto LI and XPeng Inc. XPEV posted their vehicle delivery numbers for May.

Last Week’s News Highlights

1. Stellantis entered into an agreement with Controlled Thermal Resources Ltd. (“CTR”) per which the latter would supply battery-grade lithium hydroxide for use in Stellantis’ North American EV production. CTR’s Hell’s Kitchen Project in California’s Imperial County will obtain lithium from geothermal brines by using renewable energy and steam to produce battery-grade lithium products.

Stellantis will procure up to 25,000 metric tons per year of lithium hydroxide from CTR over a span of 10 years per the agreement. In late 2021, Stellantis had announced a similar deal to support vehicle production in Europe. Per the Dare Forward strategy, Stellantis aims to increase its planned battery capacity by 140 gigawatt-hours (GWh) to nearly 400 GWh and expand its hydrogen fuel cell technology to large vans in 2024. The Dare Forward 2030 promises to make the company a championed player in the domain of net-zero emission vehicles by driving innovation and employee engagement.

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2. Mazda announced plans to make all its factories around the globe carbon neutral by 2035. This plan is part of its larger goal of making the supply chain carbon neutral by 2050. Considering its commitments to carbon neutrality, this Japan-based automaker has a long way to go. Mazda currently sells only one compliance-level EV and plans to continue selling combustion vehicles through the next decade.

To fight carbon emissions at its factories, Mazda has three key focus areas, namely energy conservation, a shift to renewable energies and the introduction of carbon-neutral fuels for in-house transportation. Energy conservation during the manufacturing process will comprise the reduction of thermal energy. MZDAY plans to switch to low/carbon-free power generation in its plants and procurement of electricity from renewable energy suppliers. The company will work on its research on carbon-neutral bio fuels for use in in-house transportation. These measures will be implemented first at Mazda’s Japan factories before other countries.

3. NIO released delivery updates for May. The company delivered 7,024 vehicles last month, up from 6,711 units sold in May 2021. The deliveries in March comprised 1,707 ET7s, 746 ES8s, 1,635 EC6s and 2,936 ES6s. Cumulative deliveries as of May 31, 2022 totaled 204,936 vehicles.

NIO’s vehicle production and sales had been impacted severely in March and April 2022 owing to the resurgence of COVID-19 outbreaks and supply chain crisis. But deliveries seem to be gradually improving as sales in May rose 38.4% from the previous month. NIO remains focused on ramping up deliveries this month. As of May-end, the cumulative mileage of its EV fleet was more than 5 billion kilometers.

4. XPeng notified that it delivered 10,125 Smart EVs in March, representing a 78% surge year over year. March deliveries comprised more than 4,224 P7 smart sport sedans, 3,686 P5 smart family sedans, and 2,215 G3 and G3i smart compact SUVs. As of May 31, 2022, XPeng’s year-to-date deliveries were 53,688 vehicles, rocketing 122% year over year.

As China eased COVID-induced restrictions, XPeng resumed double-shift production at its Zhaoqing plant in mid-May and is actively seeking to accelerate the delivery of its robust order backlog. XPEV plans to launch ACC-L and LCC-L via over-the-air updates soon. As of April end, XPeng operated 954 charging stations, including 774 supercharging stations and 180 destination charging stations across China.

5. Li Auto also released delivery updates for May. The company delivered 11,496 Li ONEs last month, representing a surge of 165.9% year over year. First-quarter deliveries totaled 31,716, jumping 152.1% on a year-over-year basis. The cumulative deliveries of Li ONE have touched 171,467 since the vehicle was rolled out in the market in 2019. As of May 31, Li Auto had 233 retail stores in 108 cities and 293 servicing centers in 214 cities.

Li Auto notified that while its parts suppliers in the Yangtze Delta region have resumed production, they haven’t yet fully recovered and thus Li Auto might be encountering challenges in the near term amid supply chain snafus. Consequently, the firm’s Changzhou manufacturing base is also operating at sub-normal levels, which is likely to result in delayed deliveries.

Price Performance

The following table shows the price movement of some of the major EV players over the last week and a 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. Investors are also awaiting the first-quarter 2022 results of NIO, scheduled to be released tomorrow.

NIO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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Mazda Motor Corporation (MZDAY) : Free Stock Analysis Report
 
NIO Inc. (NIO) : Free Stock Analysis Report
 
Li Auto Inc. Sponsored ADR (LI) : Free Stock Analysis Report
 
XPeng Inc. Sponsored ADR (XPEV) : Free Stock Analysis Report
 
Stellantis N.V. (STLA) : Free Stock Analysis Report
 
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