Levy calls TuSimple “a technological leader in the autonomous trucking space and [sees] the company’s well-defined path to commercialization & high-quality list of partners spanning throughout the trucking & logistics value chain providing an advantage over peers.”
Levy started coverage on the stock with a Buy rating and a $12 price target. Delayed deliveries to Navistar of Level 4 autonomous capability were down to supply chain challenges, and Levy thinks that “moderated near-term expectations provide [TuSimple] w/more runway to strengthen partnerships, reduce driver-out costs, & boost fleet-owner demand ahead of 2025/2026 customer deliveries.”
He also thinks that divesting the company’s China segment could reduce cash burn by 20%. The big risk for autonomous driving providers like TuSimple is whether ordinary people believe driver-out vehicles are safe.
TuSimple’s stock price is down about 80% over the past 12 months, and Levy’s $12 price target is below the average target of $19.14 from 17 analysts. The stock’s 52-week range is $5.99 to $43.79, and shares closed at $7.56 Thursday afternoon.
Solid-state lithium-metal battery maker QuantumScape came public in late November of 2020, and the share price peaked at more than $130 within a month. Since then, the stock has dropped by more than 90%. Over the past 12 months, the stock is down by nearly 67%.
The company’s solid-state battery technology offers both range and safety improvements over conventional lithium-ion batters, but Truist does not expect the company to ramp production to gigawatt-scale until 2025 or 2026. Volkswagen has invested more than $300 million in the company, and six unnamed automakers are reportedly testing the products.
Truist’s Levy initiated coverage on QuantumScape with a Hold rating and a price target of $10. As his Hold rating indicates, Levy thinks the company’s technology is a winner, but not yet: “While other technologies aim to improve on energy density, we believe [QuantumScape’s] lithium-metal anode solid-state cell has the ability to drive the biggest step-change improvement in the coming years.”
Not only that, while the batteries may be more expensive when introduced, QuantumScape “could” shave 15% to 25% off their costs once production reaches scale. That promises solid margin growth over time.
At Thursday’s closing price of $8.36, the implied gain to Levy’s $10 price target is 19.6%. The average price target on the stock from 10 analysts is $12.78. The stock’s 52-week range is $8.22 to $43.08.
Like TuSimple, Proterra is targeting medium- to heavy-duty commercial vehicles. The company is producing its fifth generation EV bus, called the ZX5, and already has buses and delivery vehicles on the road using its drivetrain and battery technology.
Levy comments that Proterra is a “key beneficiary” of both the Infrastructure and Inflation Reduction Acts thanks to “significant increases in funding for zero-emissions transit & school buses, newly established tax credits surrounding both commercial vehicles and domestic battery production as well as grants and funding for zero-emissions vehicles.”
Levy initiated coverage of Proterra with a Buy rating and a price target of $9. The company’s current challenges include untangling its supply chain, more competition from large producers and vertical integration by original equipment manufacturers, disruptions in charging infrastructure and an inability to raise capital for expansion projects.
Proterra’s stock is down about 50% over the past 12 months, and Levy’s price target of $9 is above the consensus of $7.50 and nearly double Thursday’s closing price of $5.34. The stock’s 52-week range is $4.26 to $13.22.
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