Polestar Profit (11/14/22)

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Now to the news:

In today's newsletter:⚡ The Headline: EV earnings in review: Polestar, Lucid, Canoo, Rivian, NIO, Nissan 🚨 Making News: Volvo EX90 with Thor's Hammer, Tesla Cybertruck ramp, Audi Q8 🇪🇺 Europe Electrified: China EV wave, BMW iX1, Renault FlexEVan🧧 China Report: NEV sales hit record, BYD 3 million mark, Farizon vans, Li L8 launch

Bonus: Check out the WSJ's headline: From the WSJ: Electric Vehicles Require Lots of Scarce Parts. Is the Supply Chain Up to It?

⚡ EV Earnings ⚡

Polestar posts first profit. Strategic cost-cutting measures and rising demand pushed Polestar into positive earnings territory as the company eyes 50,000 deliveries by year’s end. Polestar reported a total of 30,424 deliveries for the year so far, with around 9,215 being delivered in Q3. Polestar achieved revenue of $1.48 billion on 30,000 deliveries in the first nine months of 2022.

Rivian demand remains strong, CEO says after $1.7B Q3 net loss. The EV startup reported preorders of 114,000 for its R1T pickup and R1S SUV. up from 98,000 that it reported at the end of the second quarter. Those preorders are separate from an Amazon order for delivery vans. It recently started production on a second manufacturing shift at its Normal, Ill., factory to meet demand. CFO McDonough said the company had about $14 billion in cash, which was sufficient to fund its expansion operations through 2025. She also said Rivian was pushing back the introduction of its R2 platform to 2026 from 2025 previously.

EV startup Arrival raises going-concern risk, warns of job cuts in UK. Electric-vehicle startup Arrival warned on Tuesday that it may not have enough cash to keep its business going toward the end of next year. Arrival's net loss widened to $310.3 million in the third quarter from $30.6 million a year earlier. The company is actively engaged in capital raising. It would take about six months for funding to materialize given the macroeconomic environment, Chief Financial Officer John Wozniak said. The news sent its U.S.-listed shares tumbling 33.2%.

Lucid reports Q3 net loss of $670 million, reiterates 2022 production target. The EV startup posted revenue of $196 million on sales of 1,398 vehicles in the quarter. The company reiterated its production goal of 6,000 to 7,000 units of its Air electric sedan this year. Reservations for Lucid’s Air sedan dropped from 37,000 in the second quarter to 34,000. Lucid also said it will open reservations for its second vehicle next year, with deliveries estimated to start in 2024. The company also said it will raise up to $1.5 billion in capital. The company said in a regulatory filing that it planned to sell up to $600 million in new shares through Bank of America, Barclay’s Capital and Citi. It also said it reached an agreement to sell up to $915 million in stock to the sovereign wealth fund of Saudi Arabia, which already owns a majority of Lucid’s stock.

NIO deliveries reached 31,607 in Q3, but higher costs squeeze margins. NIO beat revenue estimates generating over $1.8 billion in Q3 2022, an increase of 32.6% from last year and 26% from Q2 2022. EV deliveries reached a record 31,607 in Q3, up 26% from 25,059 in the second quarter. NIO’s deliveries took a step back for the first time in Q2 over lockdowns in China due to COVID-19. CEO William Li noted that the NIO expects “ET5 delivery will support a substantial acceleration of our overall revenue growth in the fourth quarter of 2022.”

Nissan quarterly profit soars on better pricing power, model mix. Operating profit at Nissan Motor Co. rose 45 percent in the latest quarter, as a more profitable mix of product and foreign exchange gains offset high costs and supply chain chaos. Even amid sliding unit sales, Nissan said higher revenue per unit and better pricing power has helped bolster profitability as the company continues on its recovery track. New products such as the Ariya full-electric crossover have helped to lift Nissan's reputation and command better customers and pricing.

Canoo acquires OKC manufacturing facility, plans SOP this week. Canoo says it plans to build 15 production vehicles this year, a mix of Walmart + NASA vehicle commitments. Its original target was 3,000 to 6,000 vehicles. It plans for start of production this week – on November 17 - via third-party manufacturing partner. It ended the quarter with just $6.8 million in cash, though noted access to up to $200 million through an ATM.

🚨 Making News 🚨

House lawmakers join senator in push for delayed phase-in of EV tax credit requirements. The bill would create a longer phase-in for the new EV tax credit's North American final assembly requirement as well as its critical mineral and battery component provisions. Sen. Raphael Warnock (D-Ga.), introduced the Affordable Electric Vehicles for America Act in September. U.S. Reps. Terri Sewell of Alabama, Emanuel Cleaver of Missouri and Eric Swalwell of California introduced a companion bill this month.

Volvo unveils EX90, all-electric successor to the XC90 SUV. The EV is built on an all-electric platform and will be the first EV assembled at Volvo's 2.3 million-square-foot plant in Ridgeville, S.C. EX90 production is expected to begin in late 2023, with the factory projected to build about 60,000 units in 2024, according to AutoForecast Solutions. Volvo declined to disclose pricing for the EX90, saying only it would start at less than $80,000.

Tesla ramps hiring for Cybertruck production. Tesla’s Q3 update letter indicated that the Cybertruck’s development had entered the tooling phase. And Musk said during the call: “We’re in the final lap for Cybertruck”. Job listings on Tesla’s Careers website suggest that Musk’s comments were indeed accurate. The company currently has several openings that are specifically listed for the Cybertruck.

With production starting this week, Fisker prioritizes deliveries over complete software. Fisker is poised to begin production this week as promised a year ago, although some features, including those that are common on many competing vehicles, may not be ready until 2024, according to an Automotive News report. The Ocean is set to begin official production Nov. 17 (the same day as Canoo) at Magna Steyr's contract-assembly plant in Graz, Austria. The same location also produces the Mercedes-Benz G-Class, BMW 5-Series, BMW Z4 and Toyota Supra.

GM exploring V2H, V2G, and Virtual Power Plant capabilities for EVs. A new partnership with San Diego Gas & Electric (SDG&E) will investigate integrating bidirectional charging into the grid to improve energy distribution. Through its energy business, the automaker eventually hopes that customers will have access to advanced technologies such as: Bidirectional charging; Vehicle-to-home (V2H); Vehicle-to-grid (V2G); Stationary energy storage; and Solar energy and microgrid solutions.

Bosch and IBM use supercomputers to boost critical EV mineral supply. Bosch, a leading global auto parts and tech supplier, is working with another technology giant, IBM, on a “strategic quantum computing” partnership. Through the arrangement, Bosch will join the IBM Quantum Network as experts from both teams investigate alternatives for critical minerals used to power electric vehicles.

Redwood and Audi want to turn your old electronic devices into EV batteries. Lithium-ion battery recycler Redwood Materials and Audi are today launching a program that enables consumers to drop off their old battery-powered devices at local Audi dealerships, and then Redwood will recycle them to build EV batteries. Batteries and devices collected dropped off in the bins will then be recycled by Redwood in order to build more sustainable, domestic EV batteries.

Audi introduces Q8 e-tron EVs as its top-of-the-line electric SUV. Audi's original dedicated electric vehicle, the E-tron, is getting a reboot for 2023 that includes updated styling, more range and a new name: the Q8 E-tron 55 and Q8 E-tron Sportback. Audi expects a 30% increase in range, given the more efficient rear electric motor and improved aerodynamics. It estimates 361 miles for the Q8 E-tron and 372 miles for the Q8 E-tron Sportback.

Bollinger will source battery packs from Our Next Energy (ONE). Bollinger plans to use ONE's Aries line, which consists of cell-to-pack technology and a modular design that allows for linking multiple packs together, as an apparent replacement for the modular proprietary pack that Bollinger revealed in 2021.

GM plans to tell investors that its EV program to be profitable in 2025. The same year it’s targeting sales of 1 million battery-powered cars, people familiar with the matter told Bloomberg. CEO Mary Barra will outline a plan at GM’s Nov. 17 investor day to show how the automaker can cover investments for battery plants and assembly, and build the Ultium battery program’s margins.

🇪🇺 Europe Electrified 🇪🇺

Europe forecast to import 800,000 Chinese-built cars by 2025. Such a development would turn Europe to a net importer of cars, PwC said, with a 2025 import surplus of more than 221,000 vehicles. In 2015, Europe exported about 1.7 million vehicles. Of the potential 800,000 Chinese-built cars, about 330,00 would be from Western automakers such as Tesla, BMW and Renault Group, all of which currently export EVs to Europe from China, including the Tesla Model 3, the BMW iX3 and the Dacia Spring.

Volvo teases 'affordable' electric small SUV. The EV will be a "city car aimed at a younger demographic who can subscribe to it and make it their first Volvo," CEO Jim Rowan told Automotive News Europe. The automaker plans to launch a new EV annually for the next five years. The small SUV, which was originally dubbed the XC20, is now widely expected to be called the EX30.

Renault gives van unit more independence, new electric model. Renault Group is giving its commercial van unit its own profit and loss statement, as well as a new modular electric model. “LCV has always been a profitable segment for us, accounting historically for around 20 percent of our earnings,” CEO Luca de Meo said. Vans were a cross-company unit at the Renault-Nissan Alliance under former Chairman Carlos Ghosn but did not have their own profit and loss statement. de Meo announced that Renault would launch in 2026 an electric, modular model called FlexEVan.

Production of BMW iX1 begins in Regensburg. BMW iX1 production has officially started in Regensburg, Germany ahead of first deliveries in the coming weeks. The fully electric crossover was revealed back in May and will be sold in Europe and China. The iX1 starts at €55,000 ($56,990) in Germany and currently BMW has no plans to offer it in North America. Milan Nedeljković, member of the Board of Management of BMW AG responsible for Production, already announced the next milestone at the start of production: “We are delivering the goods. By 2024, at least one in three BMWs coming out of our Bavarian plants will be an electric car.”

UK’s first lithium refinery to be built in boost for electric car industry. Britain recently announced it is building its first lithium refinery in an effort to strengthen the UK’s supply chain for electric vehicles. In Teesport, the fifth-largest port in the UK, Green Lithium, a company funded by commodities trading behemoth Trafigura, will construct a £600 million refinery for the battery material.

🧧 China Report 🧧

China NEV sales reach record 714,000 units in Oct, CAAM data show. China's auto industry is currently maintaining momentum in production and wholesale sales, but growth in the consumer market has been slightly sluggish, the CAAM said. China's October new energy vehicle (NEV) sales rose 81.7 percent year-on-year to 714,000 units, surpassing September's 708,000 units and setting a new record high.

Geely’s Farizon Auto launches futuristic cabless truck EV and SuperVAN. Farizon says the Homtruck Cabless will be a torchbearer for L4 autonomous driving technologies in confined operating environments. Test operations for the vehicle will begin in 2023 at select Chinese ports, after which it will be tested in mining areas, logistic parks, and line haul logistics. The new Farizon SuperVAN is a customizable van built on Farizon’s Geely Multi-purpose Architecture (GMA). According to the automaker, the SuperVAN is targeted at global markets including Europe, Australasia, Southeast Asia, South America, and the Middle East, and mass production will commence in 2024.

BYD To Reach 3 Million NEVs Production Milestone. BYD has reported it will hold an event of 3 million NEVs production milestone on November 16. Its cumulative production from January to October 2022 surpassed 1.4 millions with a Y-o-Y increase of 234%. Most of these vehicles were NEVs, because BYD totally ceased ICE vehicles production in April.

Li Auto begins deliveries of Li L8. Since its launch, the Li L8 has received positive feedback and widespread recognition from consumers, and the number of orders continues to grow, Li Auto said. The company announced the development in its WeChat post today and continues to emphasize that the Li L8 is the successor to the Li ONE, although the model is essentially a scaled-down version of its flagship SUV, the Li L9. The Li L8 includes two versions, the Pro and Max, with starting prices of RMB 359,800 and 399,800 respectively.

BYD announces Chinese name for its premium car brand, starts hiring spree. On November 8 BYD officially announced the Chinese name of its premium car brand -- Yangwang, which literally means "looking up". The brand's official launch is expected in the first quarter of 2023, when its first hardcore off-road model will be unveiled. The brand's offerings are expected to be priced at RMB 800,000 ($110,320) to RMB 1.5 million, with exact prices to be announced when the relevant models go on sale.

Largest U.S. pension ups bets on NIO and Li Auto in Q3, liquidates position in XPeng. CalPERS increased its position in NIO by 18.2 percent and its position in Li Auto by 21.05 percent in the third quarter. CalPERS opened a position in NIO in the first quarter of 2019, when it bought 140,451 shares. NIO went public in the US on September 12, 2018.