Analysts from banks including JPMorgan and Bank of America have named the electric vehicle stocks they expect to rise as consumers turn their backs on the internal combustion engine. JPMorgan's head of European autos equity research, Jose Asumendi, told CNBC on Wednesday that automakers Daimler and Stellantis (formerly Fiat Chrysler) are his two favorite electric vehicle stocks in Europe. "I think very highly of Volkswagen … but if you ask me right now, top pick, it's Stellantis and Daimler," Asumendi said. Germany's Daimler owns Mercedes-Benz, while Dutch-headquartered Stellantis owns brands such as Fiat, Jeep, Maserati, Vauxhall, Citroen, Dodge and Peugeot. Stellantis "Stellantis is one of the leaders with electrification in Europe," Asumendi said, adding that the company has similar electric vehicle market share in the mass manufacturing segment in Europe to Volkswagen. "What I like about Stellantis' strategy is not only the product launches but also the battery strategy," he explained. Stellantis recently established a company called ACC to build batteries in Europe and the U.S., and Asumendi said it's planning to ramp up the operation, which has also been backed by Daimler, significantly in the coming years. Stellantis is "resurfacing as one of the largest car makers in the world," he said, along with the likes of Volkswagen, Toyota and General Motors. "We thought all these brands [that Stellantis owns] were going to die at some point and go bust, but it turned out to be different," Asumendi said, highlighting how CEO Carlos Tavares had successfully restructured brands including Peugeot and Citroen. "Now he's going to do the same thing with Alfa Romeo, Maserati and Fiat. So Stellantis offers real opportunity to invest into this European restructuring equity story." Daimler Daimler has reduced the fixed cost base of Mercedes-Benz cars by around 20%, Asumendi said, praising the work of CEO Ola Kallenius and CFO Manish Thakore. The fact that Mercedes-Benz is planning to spin out its truck division by the end of the year is also a good thing, according to Asumendi. "You will have two companies clearly run under the same hat: Mercedes-Benz Cars and Mercedes-Benz Trucks," he said, adding that it will provide more clarity and transparency. Asumendi "thinks very highly" of the new Mercedes-Benz EQS electric vehicle, and he highlighted how the firm is also electrifying commercial vehicles and trucks. His price target for Stellantis is 27 euros, while Daimler is 98 euros. Shares in the companies were trading around 16.5 euros and 77 euros respectively on Friday. Lucid Elsewhere, Bank of America put a buy rating on U.S. EV-maker Lucid on Sept. 15. The California-based company was backed by Saudi Arabia's Public Investment Fund with $1 billion in 2018. "Our Buy rating is predicated on our view that LCID is one of the most legitimate in the universe of start-up EV automakers," analysts John Murphy, Aileen Smith and TT Fletcher said in a note to investors. The analysts said the management team's industry experience gives Lucid a competitive advantage, as does its technology and the fact that it has an interesting product in the form of the Air sedan. "Although this does not mean complete avoidance of the obstacles many EV start-ups have endured from concept to commercialization, we assign much more credibility to LCID's success in this endeavor," they wrote. Meanwhile, Morgan Stanley analysts said in a note to investors on Sept. 20 that Lucid deserves respect from investors for its "drivetrain and battery management system". They admitted, however, that it's difficult to know how durable and scalable the technology is compared to Tesla. GM and more In a separate note to investors on Sept. 30, Morgan Stanley analysts led by Stephen Byrd said, "electrifying mobility is a long-duration theme with many stocks with favorable exposure." The analysts said they see strong growth across the entire ecosystem driven by "growing consumer interest in clean energy and mitigating climate change." General Motors and Ford should be able to successfully transition to EVs, the analysts said, adding that they expect the companies to spend $50 billion on capital expenditure and research and development as they make the transition to electric between now and 2025.
Electric vehicle start-up Lucid on Sept. 28, 2021 said production of its first cars for customers has started at its factory in in Casa Grande, Arizona.
Analysts from banks including JPMorgan and Bank of America have named the electric vehicle stocks they expect to rise as consumers turn their backs on the internal combustion engine.