Multi-State MOU Intensifies Electric Truck Goals: 5 Picks

Electric vehicle (EV) trends are getting hotter day by day. Amid rising climate concerns, investors are betting big on the future of e-mobility, as is evident from the recent meteoric share price gains of various EV makers including Tesla, NIO Inc., Nikola and Workhorse. In addition to investors piling on EV stocks, various states and governments also appear to be positively charged about the potential of green vehicles.

In a bid to support electrification of vehicles for fighting climate concerns, 15 states and the District of Columbia recently signed a joint memorandum of understanding (MOU). The MOU is aimed at accelerating the deployment of electric medium- and heavy-duty trucks, as well as other vehicles. The group aspires to achieve 100% transition to electric trucks and buses by 2050, with an interim target of at least 30% zero-emission medium- and heavy-duty truck sales by 2030.

The 15 states that have signed the MOU are California, New York, Washington, Massachusetts, New Jersey, Hawaii, Colorado, Vermont, Pennsylvania, North Carolina, Connecticut, Oregon, Maryland, Rhode Island and Maine. For effective coordination, the Northeast States for Coordinated Air Use Management will provide the necessary framework to implement action plans for decarbonizing trucks and busses through a collaborative process.

Nationwide efforts to make freight transportation carbon neutral and revving up of infrastructure incentives for the same have been gaining traction of late. Last month, California, which has always been at the forefront to fight climate change, mandated that more than half of all the trucks and vans sold in the state should be emission free by 2035.

The latest move is certainly a tailwind for the electric trucking industry, which is still in early stages of development. Shift from internal combustion engine to electrification does require heavy investment. However, there is strong support from governments and investors alike, who are intrigued by automakers that look for solutions to lower global carbon emissions for providing a cleaner energy future.

Amid the changing dynamics, many of the automakers have already announced ambitious plans to manufacture electric trucks and vans. The recent MOU is likely to encourage more companies to further emphasize on the future of e-mobility and usher in an electrifying new era in trucks. Indeed, the electric trucking space is primed for exponential growth in the long haul. Below we highlight five stocks carrying a Zacks Rank #3 (Hold) that should be on investors’ radar to tap the trend. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Add to Your Watchlist

Daimler AG DDAIF: This Germany-based auto giant is one of the world’s largest truck makers. The automaker delivered the first few electric Freightliner trucks in 2019 as part of customer testing in North America. In March 2020, it delivered more electric Freightliner semi-trucks as part of its customer test fleet. The Freightliner eCascadia, with a range of 250 miles on a single recharge, is a Class 8 electric trailer. The Zacks Consensus Estimate for fiscal 2021 earnings and sales suggests growth of 1,151.4% and 8%, respectively.

Tesla TSLA: This California-based red hot EV maker is enjoying an incredible run on the bourses. Tesla Semi, an all-electric battery-powered Class 8 semi-truck, is likely to emerge as one of the most popular in the electric commercial vehicle segment. The production of 500-mile range Semi, which was unveiled in November 2017, has been postponed until 2021. However, a recent leaked mail from Musk indicated that the firm is preparing for a volume production push in 2020. The Zacks Consensus Estimate for Daimler's fiscal 2021 earnings and sales suggests growth of 161% and 43.7%, respectively.

Nikola NKLA: Shares of Nikola have been on fire since it joined Nasdaq after a reverse merger with VectoIQ on Jun 3. Indeed, Nikola does not have much to show for itself in terms of saleable product and is not even making any revenues. The firm is betting big on electric trucks. The upcoming Nikola Badger pickup truck will be available in BEV and FCET options. The firm plans to roll out the Class 8 Nikola Tre BEV by 2021. It should be noted that by 2027, Nikola anticipates a production of 30,000 fuel cell electric vehicle trucks.

General Motors GM: U.S. top auto giant General Motor’s decision to re-introduce Hummer as an electric-model, which had earlier become a symbol of gas-guzzling due to excess size and low-fuel economy, has taken the industry by surprise. The Hummer electric pickup will be built on General Motor’s third-gen BT1 EV platform and is estimated to have a 400 mile range on a single charge, thanks to the new ‘Ultium’ battery packs. It will offer up to 11,500 pound-feet of torque, a measure of pulling power. Amid the coronavirus pandemic, General Motors has pushed back the production of electric Hummer, which is now expected to hit the roads by 2022. The Zacks Consensus Estimate for fiscal 2021 earnings and sales suggests growth of 159.2% and 7%, respectively.

Ford F: U.S. #2 automaker Ford is developing an all-electric version of F-150, the nation’s best-selling pickup. The pre-production testing of the vehicle is currently underway. The company made huge headlines when it released a video last summer to demonstrate the pickup’s remarkable towing capacity. The electric F-150 prototype was seen pulling 10 double-decker rail cars filled with 42 F-150 pickups, weighing nearly one million pound. The electric F-150 will go on sale in 2022. The Zacks Consensus Estimate for fiscal 2021 earnings and sales suggests growth of 131% and 21%, respectively.

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