Shares of Club holding Devon Energy (DVN) fell sharply Wednesday, one day after delivering disappointing fourth quarter results , reducing its fixed-plus-variable dividend and barely buying back any stock. Forward guidance wasn’t that great either. It’s certainly a frustrating story for sharholders like us, and one that bares further scrutiny. Bottom line Unlike most companies, Devon holds its post-earnings conference call the morning after the release. We heard little to make us want to buy Wednesday’s more than 11% decline. In fact, we are considering whether to exit one of our three exploration and production (E & P) companies. We’re going to reserve judgment on which ones stay and which one goes until we get quarterly results from Coterra Energy (CTRA) and Pioneer Natural Resources (PXD) next week. DVN 1Y mountain Devon Energy (DVN) 1-year performance Devon management on Wednseday did reassure investors of its commitment to financial discipline and shareholder returns. But the unfortunate reality is that oil prices — and therefore Devon’s free cash flow generation and ability to return capital to shareholders — are somewhat out of management’s hands. They can certainly control investment activity and the amount of free cash flow earmarked for the variable portion of the dividend. But there’s little to nothing they can do to influence the actual price of energy commodities to which their fate is tied. It’s worth noting, the breakeven level for Devon on oil is around $40 per barrel — up from about $30 a year ago due to inflation. West Texas Intermediate crude in Wednesday’s trading went for nearly double that, providing a healthy cushion. Production guidance On Devon’s earnings call Wednesday morning, management said that the first quarter is expected to be the lowest production quarter of fiscal 2023. They cited three reasons. One, about 90 wells are expected to be brought online during Q1, so their full benefit won’t be felt until after the quarter. Thereafter, management expects a roughly 15% increase in online wells per quarter. Two, there’s been downtime in the Delaware Basin due to a late-January fire at a compressor station that severely damaged the electrical system and the unit. This is expected to hold back production by about 10,000 barrels of oil-equivalent-per-day (Boe/d). The facility is expected to be back up and running by mid-March, with no impact to second quarter production expected. Lastly, management expects to reject ethane at several processing facilities. Companies do this when demand — and therefore the price of ethane — is low and it doesn’t make financial sense to extract ethane from raw natural gas. This too is expected to be a headwind of about 10,000 Boe/d. Share repurchases Management also addressed the company’s low level of buyback activity in Q4 of just $57 million worth of shares. On the call, the team said they wanted to preserve and build back cash levels to maximize financial flexibility following large cash outlays associated with recent acquisitions. Going forward, they expect stock repurchases to be more active “especially if [they] see trading weakness relative to [their] peers,” such as what we’re seeing Wednesday. Coterra and Pioneer dropped more than 2% and over 4%, respectively. Not a good day to be sure, but a far cry from the carnage Devon is experiencing. Additionally, with about $700 million remaining under a current $2 billion repurchase authorization, management expects the remainder to be used up by the second quarter, at which point they expect to seek another share repurchase authorization from the board. M & A activity As for merger and acquisition (M & A) activity, management believes that consolidation in the E & P industry is needed, and they are always on the lookout for accretive opportunities. However, they will for now remain disciplined and weigh M & A opportunities against returning capital to shareholders via dividends or buybacks. Energy price outlook @CL.1 1Y mountain WTI crude (@CL.1) 1-year performance In line with the commentary we provided following the late-Tuesday’s earnings release, management believes the operating environment to be supportive of energy prices for several reasons. On the supply side, they cite years of underinvestment in producion capacity — a key pillar of our investment thesis in oilfield services provider Halliburton (HAL); continued sanctions on Russian production due to Moscow’s ongoing war against Ukraine; what they call a “generational low in OPEC’s spare capacity;” and financial discipline from U.S. producers. On the demand side, they cite an increase in the need for energy as global economies grow post-Covid. The most obvious example is the ongoing reopening of the Chinese economy after Beijing abruptly abandoned its strict pandanic policy of zero-Covid. (Jim Cramer’s Charitable Trust is long DVN, CTRA, PXD, HAL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Pipes carry water, steam and oil at Devon Energy Corp.’s 35,000 barrel per day Jackfish Projects plant, where Steam Assisted Gravity Drainage (SAGD) is used to extract bitumen from oil sands, near Conklin, Alberta, Canada.
Jimmy Jeong | Bloomberg | Getty Images
Shares of Club holding Devon Energy (DVN) fell sharply Wednesday, one day after delivering disappointing fourth quarter results, reducing its fixed-plus-variable dividend and barely buying back any stock. Forward guidance wasn’t that great either. It’s certainly a frustrating story for sharholders like us, and one that bares further scrutiny.
Electric vehicles have reached a tipping point in China. They now represent the majority of the new car market, surging to 51% market share.
China and electric vehicles are linked together.
The majority of the world’s electric vehicles (BEVs and PHEVs) are both built and sold in China.
In 2024, global electric car production reached around 17 million vehicles, with China accounting for about 12 million of those — over 70% of the world’s total.
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Roughly 11 million of the 12 million EVs were also sold in China. The rest were exported to other markets.
This is impressive in itself, but China has a massive automotive market. How significant are these EV volumes within the market?
It turns out that electric vehicles just reached a tipping point in China.
According to registration data from the China Association of Automobile Manufacturers (CAAM), electric vehicle sales have achieved over 50% market share for each of the last five months.
Year-to-date, electric vehicles market share currently sits at 51% of new car sales in China. This is often viewed as a tipping point that quickly leads to electric vehicle sales dominating the entire market.
For example, EV sales reached over 50% market share in Norway in 2020 and by 2024, they were at 90%.
Battery-electric vehicles (BEVs) are also growing rapidly and already account for the majority of EV sales in China.
BEVs hold 31% market share of China’s passenger vehicle market.
Electrek’s Take
This is truly impressive. The world’s largest car market has an EV market share of over 50%. It shows the power of China. When it says “go, we are going electric”, they go electric.
They are also producing increasingly better products because EV manufacturers in China operate in the world’s most competitive EV market.
There are numerous models available, and it’s unlikely to be sustainable, but the best will rise to the top, and then they will set their sights on conquering overseas markets, which some of them are already doing.
It doesn’t bode well for automakers in North America and Europe unless they learn from China and commit fully to electric vehicles.
For example, Tesla, the largest EV company outside of China, has seen its sales decline in China year-to-date amid the surge in EV sales in the country. This is not a good sign. Tesla is not as competitive within China, even when producing its EVs locally, as it is outside of China, where the EV competition is less.
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Tesla has announced the Model Y Performance, available in Europe starting in September.
The Model Y Performance is now out in Europe, after Tesla teased a Friday announcement earlier this week. The teaser went out from Tesla’s Europe/Middle East account, but the release seems to only be in Europe, for now.
Tesla updated its European configurator today with the new Model Y Performance, along with details on what sort of upgrades the car gets over the other trim levels of the Model Y.
The basic headline stat is that the Performance model brings 0-100km/h (0-62mph) times down from 4.8 to 3.5 seconds, quite a leap (or 3.3 seconds for 0-60mph). This is thanks to the increased 460hp available on the Model Y Performance.
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That higher level of horsepower doesn’t seem to greatly affect efficiency, though, as the car is still capable of 580km (360mi) range on the WLTP cycle – which, keep in mind, is more lenient than the EPA cycle. It also hasn’t lost much charging speed, according to Tesla, with the ability to add 243km (151mi) of range in 15 minutes – a better measure of efficiency, given Tesla doesn’t specify its battery capacities anymore. Though it does say it’s using “new, high-voltage battery cells.”
But the performance upgrade isn’t just more horsepower and better 0-60 times, there are some other design, interior and performance touches.
The Performance model comes with 21″ “Arachnid 2.0” wheels, a new wheel design, along with redesigned front and rear bumpers which look more aggressive and less flat.
model y performance front bumper
model y juniper front bumper
model y performance rear bumper
model y juniper rear bumper
On the inside, Tesla has added performance badging, reminiscent of the “Plaid” theme it has used on other performance vehicles, and has slightly increased the size of the front touchscreen (from 15.4 to 16 inches), with higher resolution to boot.
The front seats get an improvement, with adjustable thigh extensions for those with particularly long legs.
In terms of performance changes, Tesla added updated suspension to the Model Y Performance with electronic dampers. We saw this on the recent Model Y L which earned praise for its driving dynamics, despite being full of 6 adult passengers.
The Model Y performance includes a new mode which Tesla calls “Stability Assist Mode,” which it says allows drivers to “Customize your traction and control. Choose between Standard, Reduced or Off to give your vehicle more or less traction according to your driving style and terrain.”
This sounds like a performance tuning of the car’s stability control systems – stability control can apply brakes to individual wheels to help correct over/understeer, but can get in the way in performance driving applications.
There may be other performance-related options in there, but Tesla isn’t telling us about them yet – merely referring to them as “drive modes.”
While nobody has gotten their hands on the Model Y Performance for a driving review yet, the Model 3 Performance earned immediate rave reviews from most of those who drove it. It’s quite the performance package, and there’s pretty much nothing out there with the same sort of specs on offer for that price, gas or electric (though personally, I prefer rear-wheel drive cars and was a bit disappointed by the slightly slower steering rack post-Highland refresh).
So if the chunkier Model Y Performance can turn out similar dynamics as Tesla’s sport sedan, it will be interesting to see how it does against the likes of the Ioniq 5N and such.
As for whether or when we’ll get this model in the US: the Model Y Performance release is similar to how the Model 3 Highland and Model Y Juniper refreshes got released, each hitting Europe first before North America. However, the Model 3 Performance didn’t get the same treatment, so it’s interesting to see Europe getting the Performance Model Y first in this instance. We’ll have to see if a North American Model Y Performance release is imminent, or if it might take a few months like the Highland and Juniper did. Stay tuned.
The Model Y Performance will start shipping in September, and starts at €62k (~$73k) in Germany, with local prices varying from country to country but generally staying somewhere in that range. Head on over to Tesla’s site to check out prices in your territory (change regions/language in the upper-right of the website).
Electrek’s Take
Now here’s the question: can this help to reverse the negative momentum Tesla has in Europe?
Sales are up in only a few European countries – like Norway, where we imagine this model will be plenty popular enough. And the Model Y Juniper refresh, released at the beginning of this year, hasn’t stopped the bleeding (in fact, the bleeding started right around when it was released in January… but that was probably less due to the car itself, and more due to Musk’s unambiguous Nazi salutes).
A new, whiz-bang, more expensive model will probably help with margins, and will allow some people to forget the tarnish that Musk has brought to Tesla’s reputation. It might even be the bump Tesla needs to turn around the quarter, which ends in a month, given Tesla said Performance Model Ys will be available before the end of September (where there will also likely be a sales boost in the US, due to the upcoming end of federal tax credits, an end which Musk himself stupidly enabled).
But generally, to stop a sales decline, you need to bring in base consumers, not the relatively fewer high-end ones. We very much doubt that the reason for Tesla’s decline over the last 7 months was because of the lack of a performance model – so this might help a bit, but the deeper issue is Tesla’s bad CEO.
Nevertheless, if you’re one of the ones who can look past Musk’s actions (I can’t), feel free to use our referral code.
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Chrysler parent company Stellantis is sinking billions on electric Jeeps and Chargers that no one wants, but the they’ve developed market-leading EVs in Europe, and this latest, £36,995 DS Automobiles No4 is exactly the sort of electric crossover that could rejuvenate the brand’s American prospects. The only question now is: why won’t they bring it here?
The new all-electric No4 E-Tense model from Stellantis’ French brand DS Automobiles will be offered at three trim levels starting with the Pallas at £36,995 (approx. $48K US), rising to £39,160 for the Pallas+ and topping out at £41,860 (approx. $56K US, before incentives get applied) for the range-topping Etoile.
All three trims use a front-mounted electric motor rated at 213 hp, drawing from a 58.3‑kWh battery pack. That setup delivers up to 280 miles on the WLTP cycle (about 240 miles by EPA estimates). That feels like a lot of miles from a relatively small battery, aided no doubt by the DS No4’s aerodynamic. Inside the No4’s sculpted flanks is enough room for five adults and a bunch of their stuff, as well as an incredibly sexy dash and infotainment layout that (in the official press photos, at least) seems positively slathered in Alcantara (think “vegan suede”).
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With 120 kW fast charging capabilities, the No4’s battery pack can replenish from 20 to 80 percent in under 30 minutes. Thanks to built‑in V2L/V2X tech, the No4 can also supply power back to external devices.
Electrek’s Take
I think it would be a hit. As for why the marketing gurus at whatever’s left of the old Chrysler corporation seem to think an electric muscle car that no one asked for or a Dodge-branded Alfa Romeo that no one will ever ask for is a better use of their marketing dollars – that’s simply beyond me.
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