"UBS believes the market significantly underappreciates the potential scale of BESS manufacturing capacity additions driven by the EV-to-grid-storage pivot. When automakers repurpose existing EV battery lines for utility-scale storage, they redeploy massive, already-built infrastructure."
"The result, per UBS, is oversupply arriving by 2027 that drives BESS costs down and squeezes Fluence's margins. This threat is structural and multi-year, not a short-term headwind."
"Fluence Energy's Q1 FY2026 gross margin collapsed to 5%, down from 11% year-over-year, driven by cost overruns on two projects and seasonal under-absorption of fixed costs."
Fluence Energy's stock was downgraded by UBS from Neutral to Sell, with a price target cut from $22 to $8. UBS cites U.S. tax policy driving a shift from electric vehicle battery manufacturing to utility-scale battery energy storage systems, leading to oversupply by 2027. This oversupply threatens Fluence's margins, which are already under pressure. The company reported a gross margin of only 5% in Q1 FY2026, down from 11% year-over-year, and a net loss of $62.59 million, indicating ongoing profitability challenges despite a strong backlog.
Read at 24/7 Wall St.
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