Nikola jumps 24% as board member Jeffrey Ubben defends the EV maker following scandal-induced 90% collapse

FILE PHOTO: Jeffrey Ubben, Founder & CEO at ValueAct Capital, speaks on the Reuters Newsmaker event "The Future of Shareholder Activism" in Manhattan, New York, U.S., February 22, 2017.  REUTERS/Andrew Kelly
Jeffrey Ubben, Founder & CEO at ValueAct Capital, speaks on the Reuters Newsmaker event “The Future of Shareholder Activism” in Manhattan, New York, U.S.

  • Nikola surged as much as 24% on Thursday after board member Jeff Ubben defended the company on CNBC.
  • Scandals at Nikola over the past year have led to a 90% decline in the stock price since its peak at about $94.
  • Ubben said Nikola has its head down and is working towards its goals of launching an electric semi-truck.
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Nikola soared as much as 24% on Thursday after its board member Jeffrey Ubben defended the electric vehicle company in an interview with CNBC’s David Faber.

Ubben told CNBC’s David Faber that despite the controversy over its founder and former chairman and ceo Trevor Milton, the company had its head down and is working towards achieving its goals.

That scandal includes the company rolling a prototype truck down a hill in a promotional video, which led to General Motors pulling the plug on its planned $2 billion equity investment in the company.

Shares of Nikola have fallen as much as 90% since its peak at $93.99 last June. But Ubben said the company is on target with its timeline of launching its electric semi-truck sometime between 2022 and 2023.

Ubben is managing partner of Inclusive Capital Partners. Ubben owns 4.8% of Nikola, according to SEC filings.

Nikola did seem to make some progress on Thursday, as it announced a collaboration with TravelCenters of America to install hydrogen fueling stations at two locations in California. The hydrogen fueling stations are expected by be commercially operational by the first quarter of 2023, and will serve as a potential roadmap for developing nationwide hydrogen fueling infrastructure with TravelCenters in the future.

Comments from Ubben, who has sold Nikola shares in the past, come about one week before a sizable lock-up period expires for company insiders. In November, Nikola’s board members, executive officers, and their affiliates voluntarily agreed to extend their original lock-up provisions through April 30, 2021.

The lock-up expiration will allow 136.7 million Nikola shares to be sold, roughly doubling its current share float of 144 million shares.

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General Motors has unveiled a new all-electric Hummer SUV to accompany the EV pickup due in the fall

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2024 GMC Hummer EV SUV.

General Motors has doubled up on its electric vehicle (EV) offering with an announcement on Saturday of its second all-electric Hummers.

GM already announced its upcoming EV Hummer pickup, which is scheduled to go on sale this fall – its first model of the American classic in 11 years.

Hummer is the latest brand to jump on the electrification bandwagon, with Volkswagen also gearing up to take on Tesla with its Mission T project.

Herbert Diess, Volkswagen’s CEO, has committed to offering a fully electric vehicle for each of its stable of brands, including Audi, Bentley, and Porsche, by 2025.

Duncan Aldred, global vice president of GMC, said in a statement: “The GMC Hummer EVs were envisioned to be the most capable and compelling electric supertrucks ever.”

Following a similar pricing structure to that of the pickup, the base model SUV comes in at about $80,000. A special Edition 1 launch model – with its “extreme off-road package”- costs $110,595.

Pricing varies based on the range and battery size of the vehicle.

GM said it will produce the highest-priced models in early 2023, with the less expensive versions coming in spring 2024.

Hummer’s EV Edition 1 pickup coming this falls has already sold out. It starts at $112,595.

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Hummer EV Pickup.

The base model SUV’s range is estimated to be around 250 miles to 300-plus miles, depending on the model.

The Hummer EV SUV debuted during an ad narrated by NBA star LeBron James during the NCAA’s Final Four game between the Baylor Bears and Houston Cougars on CBS.

FILE PHOTO: Tesla CEO Elon Musk unveils the Cybertruck at the TeslaDesign Studio in Hawthorne, Calif. The cracked window glass occurred during a demonstration on the strength of the glass.Mandatory Credit: Robert Hanashiro-USA TODAY/File Photo
Elon Musk with his Tesla Cybertruck.

These latest Hummer models will be competing against several other vehicles, including Tesla’s ‘Cybertruck‘, a futuristic-looking EV pickup that joins the roster of the company’s sports cars. The Cybertruck made headlines at its launch after its “armour glass” windows shattered twice during CEO Elon Musk’s presentation.

CEO Elon Musk unveiled the $39,900 truck in Los Angeles in November 2019.

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Volkswagen rallies as much as 8.8% as investors buy into its plans to rival Tesla for electric vehicle dominance

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A Volkswagen worker works on the ID 3, one of Volkswagen’s electric cars.

German car manufacturer Volkswagen rose by as much as 8.8% on Wednesday, extending the gains made the day before when it unveiled its plans for expansion in the electric vehicle market that could make it the world’s leading producer.

Shares were up as much as 8.8% at one point, at 291 euros ($346), their highest since November 2008 and set for a 25% gain so far this week. Volkswagen’s US-listed shares closed 10% higher on Tuesday.

At its “Power Day” on Monday, Volkswagen said it would build six electric vehicle battery factories across Europe and produce predominantly electric cars by 2030. This has triggered a surge in the value of its shares.

Volkswagen also stated it could significantly reduce battery production costs, which in turn would drive down electric vehicle retail prices, and invest into building an electric vehicle software infrastructure to be used across all of its brands.

Disruption in supply chains through factory closures, manufacturing interruptions and delivery delays have put pressure on the car manufacturing industry throughout the pandemic.

By shifting its focus towards electric vehicles over the past year and effectively emulating Tesla’s strategy, Europe’s largest carmaker has gained back a significant amount of ground. Volkswagen shares have risen by 180% since the market crash in March last year.

The company is aiming to dethrone Tesla as the global leading manufacturer of electric vehicles: “Our goal is to secure a pole position,” said Herbert Diess, CEO of Volkswagen, on “Power Day”.

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EVs and clean tech are bubbles that will deflate as economic recovery prompts rethinking of ‘aspirational’ sectors, says JPMorgan

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Elon Musk talks to journalists at the construction site of the Tesla Giga-Factory in Grünheide near Berlin, Germany, September 3, 2020.

  • Bubbles in EV and clean-tech technology portions of the market began forming when the COVID-19 pandemic was growing in early 2020, says JPMorgan 
  • Investors are reassessing a “reset” agenda as economic recovery takes hold and bidding up oil and travel stocks. 
  • Tesla shares continued to selloff during Tuesday’s session. 
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Bubbles in electric-vehicle and clean-technology stocks will deflate as investors look for exposure to a recovery in the world’s largest economy, with oil and hospitality stocks emerging among such plays, said JPMorgan on Tuesday.

The bubbles trace back to February and early March 2020 when the coronavirus crisis began tightening its grip on US markets. Rallies were tied to the outlook for certain technologies, ideologies and policies and “only to a smaller extent to retail paycheck and popularity and momentum chasing,” said Marko Kolanovic, head of macro quantitative and derivatives strategy at JPMorgan, during a Tuesday conference call held by the investment bank.

“Really they took off with COVID. There was this premise that we’re going to close and reinvent and redesign the world and reimagine,” he said.

He noted that the bubbles were not directly related to classical economic cycles and rather driven “by a reset agenda.”

But with economic activity accelerating, “what you’re seeing is oil moving up, copper moving up, retail names,” and gains in shares of cruise lines and airlines, said Kolanovic. He pointed out that the energy sector is still down by 50% over the year.

“As the real economy is recovering some of these, call it, aspirational market segments are probably going to deflate,” he said.

Oil prices and hospitality stocks were hit hard as the pandemic forced businesses worldwide to temporarily close, and in some cases multiple times, to curb the spread of the virus.

Retail investors “may get disillusioned a little bit with some of these names” in the bubbles. “You obviously had a lot of short-squeezing along the way last year. [Treasury Secretary] Janet Yellen had some comments about crypto yesterday so I think you may see some ‘pouring the cold water’ on the whole innovation angle,” rather than a “pop that takes out everything,” said Kolanovic.

JPMorgan during the conference call did not specify any particular stocks at risk of a correction.

But broader EV-sector weakness was seen in Tuesday’s session, with Tesla, Nio and Nikola all down. Tesla in particular has seen an eye-popping rally.  Shares climbed by more than 450% since early March through last Friday. The stock on Monday was hammered down 8.6% and continued to sell off on Tuesday.

Tesla’s slide also comes alongside a drop in bitcoin this week following a massive February rally, during which the car maker announced it had made a $1.5 billion investment in the cryptocurrency. Yellen on Monday told CNBC that bitcoin is “an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”

 

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Nio’s 2-day plunge stretches to 24% as electric-vehicle stock momentum slows

Nio
  • Nio shares fell as much as 18% Tuesday, extending their two-day loss to 24%.
  • The company is one of several electric-vehicle makers to see sharp two-day declines.
  • Tesla specifically has led a broader sell-off in tech stocks.
  • Visit the Business section of Insider for more stories.

Nio stock slid as much as 18% on Tuesday, extending the electric-vehicle maker’s two-day skid to 24%. The company has been swept up in a broader industry sell-off led by larger rival Tesla.

Shares of both company are being pulled back alongside other technology stocks as investors evaluate rising borrowing costs in the face of rising bond yields. Bond yields have stepped higher as investors price in a potential pickup in inflation on the back of economic recovery from the COVID-19 pandemic.

“Given their aggressive discounting to present of long-term cash flows, they’re suffering from the same effects as investment grade corporate bonds and anything else that pushes cash flow far into the future,” Bespoke Investment Group said of tech stocks in a Monday note.

For evidence, the firm highlighted the Nasdaq 100‘s more than 4% underperformance versus the Russell 2000 index of small-cap stocks over the past two days.

Tesla shares fell 5% as much as 9% on Tuesday following a similarly-sized drop the prior day. The stock has been under pressure since the company stopped orders for the lowest-priced version of its Model Y SUV over the weekend.

Prior to the two-day dip, Nio’s stock price had been climbing in recent months on growing interest among investors in electric vehicles and green-energy products, factors that have also contributed to the surge in shares of EV maker Tesla.

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Elon Musk says Tesla has held ‘preliminary discussions’ to license its Autopilot software to other manufacturers

Elon Musk
  • Elon Musk said Tesla has held early talks to license its software with other car manufacturers.
  • The CEO has said in the past he is not looking to edge out other competitors, but rather simply advance the technology.
  • Musk said the “full self-driving” software may be functional without an operator within the year, reaching Level 5 autonomy.
  • Visit Business Insider’s homepage for more stories.

Tesla CEO Elon Musk said the company has been in early talks to share its self-driving software with other manufacturers during an earnings call Wednesday.

“We’ve had some preliminary discussions about licensing Autopilot to other OEMs,” Musk said during the call.

Musk emphasized the company is not looking to keep the software to itself, but is waiting for the service to become more reliable before sharing it with outside companies.

“We need to probably do a little more work to prove that Autopilot is capable of full self driving,” Musk said. “Then we’re more than happy to license that to other car companies.”

The CEO has said in the past that he is not looking to edge out other competitors, but rather simply advance the technology.

The software was released as a public beta to a select group of consumers – Musk said it was around 1,000 – in October. The software still requires a licensed human operator, though Musk said he’s hopeful it could be capable of Level 5 autonomy within the year.

“The software is improving dramatically,” Musk said.

When the feature entered public beta, users quickly reported multiple errors, with YouTube videos showing the software missing intersections and boulevards. 

Musk says Tesla is focusing on improving Tesla’s neural network through 3-D labeling, gathering videos, and labeling elements so that the program can learn.

“We believe we have the best neural-net-training software in the world by an order of magnitude,” Musk said.

Tesla’s plan is to create a car that will drive better and be more reliable than the average human.

Tesla is not the only company pursuing full automation. In October, Waymo, a Google subsidiary, launched an entirely driverless ride service in Phoenix. General Motors, Volkswagen, and Ford have also been pushing for autonomous vehicles, with Volkswagen and Ford joining together to support Argo Ai, an autonomous driving technology company.

The company has gone head to head in the past with other automakers pursuing fully automated vehicles. Recently, Waymo CEO John Krafcik said Tesla was “no competition at all” when it came to making autonomous vehicles.

However, Musk said he believes the company could deliver on his promise of a fully-automated system sooner rather than later.

“From my standpoint, it looks like a very clear and obvious path towards a vehicle that will drive safer than a person,” Musk said. “I don’t really see any obstacles here.”

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