There is a lot of hype surrounding EVs, and with reason. EV manufacturers are investing heavily in developing new models and expanding their EV portfolios. The government, through its policies and initiatives, is also encouraging the transition to EVs. However, without adequate EV charging infrastructure, it is highly improbable that electric vehicles will succeed.
If you believe that electric vehicles are the way of the future but are unsure which manufacturers will make it, consider investing in EV charging stations. No matter which carmakers gain traction with car buyers, we will always favor the charging infrastructure.
Transportation electrification is one of the solutions to climate change. Yet EVs account for only a small percentage of automobile sales, and range anxiety stands as a significant barrier to adoption. Prospective EV drivers are concerned that they will be unable to charge the vehicle during an extended trip.
Clearly, we require a charging infrastructure to support the growth of electric vehicles. This creates a classic chicken-and-egg scenario: potential customers are unwilling to purchase EVs due to a lack of charging stations. Additionally, charging stations are unprofitable without a sufficient number of EVs on the road.
However, all companies offering EV charging stations are startups with limited revenue. This is unavoidable: charging stations must be constructed ahead of anticipated demand due to the scarcity of EVs on the road.
Despite this, charging stations may be a better investment than electric vehicle stocks. Dozens of startups and established automakers are vying for a piece of Tesla's pie, and there will be plenty of losers.
While EV charging station stocks are also risky, the infrastructure they are constructing will be required by all EV brands, regardless of which brand wins. Although the initial investment is substantial, charging companies can receive subsidies from the government or even automakers such as General Motors.
For investors, selling shovels to gold miners may be a better deal than mining for gold themselves.
Charging station stocks are segmented into those that sell hardware and software (such as ChargePoint, Tritium, EVBox, WallBox, and Beam) and those that build out charging stations (such as Volta, EVgo, and Allego). While developing stations requires considerable capital, once demand from EV owners increases, station owners can quickly become profitable.
The majority of electric vehicle startups went public in 2021, and Allego and Tritium are expected to follow suit in 2022 via SPAC mergers. Another electric vehicle charging company, Amsterdam-based EVBox, was scheduled to merge with a SPAC, TPG Pace Beneficial, but the deal was called off in December 2021.
Due to valuation concerns, the majority of EV charging station stocks (and EV stocks in general) had a poor year. Indeed, valuations are lofty, and the majority of these businesses have yet to generate significant revenue. It will be interesting to see whether they can live up to the hype.
ChargePoint Holdings (CHPT) is one of the industry's leading names today. In a nutshell, it is an electric vehicle infrastructure company that owns and operates one of the world's largest online networks of independently owned electric vehicle charging stations. Specifically, it operates over 26,000 public charging stations throughout the United States. The company operates 118,000 charging stations worldwide. For the most part, the company is committed to making going electric simple for businesses and drivers through its diverse portfolio of charging networks and solutions.
The company reported its most recent quarter financial results for fiscal 2022 in December. To begin, revenue increased 79 percent year over year to $65 million in the third quarter. Additionally, it activated approximately 163,000 ports as of October 31, with approximately 45,000 in Europe. Additionally, the company completed ViriCiti acquisitions. ChargePoint increased its full-year revenue outlook to $235-240 million from $225-235 million as a result of the strong quarter. On that note, are you planning to add CHPT to your portfolio?
2. Blink Charging Corporation (BLNK)
Blink, founded in 2009 and headquartered in Miami Beach, Florida, designs, owns, and operates electric vehicle charging infrastructure. Blink's cloud-based software network maintains a database of all charging stations.
Over 24,000 charging stations have been installed in the United States, Europe, and the Middle East, and the company currently has over 190,000 registered members. Stations are located in a variety of locations, including airports, automobile dealerships, hospitals, hotels, and restaurants. In the third quarter of 2021, the company added over 3,000 stations.
Blink earns money by selling electricity to EV drivers (if the charging station is owned by the company) and charging hardware, as well as by charging network fees and advertising. Blink acquired Blue Corner, a Belgian operator of electric vehicle charging stations with over 7,000 charging points across Europe. In 2020, Blink earned $6 million and $13 million in the first nine months of 2021. Additionally, the company contracted or sold 3,016 charging stations, a 351 percent increase over the previous year. Having said that, are you considering investing in BLNK stock?
EVgo currently operates a network of over 800 fast charging locations across 34 states in the United States and expects to more than triple its size over the next five years.
It is the country's largest network of fast charging stations. Fast charging stations can recharge a battery in less than a half hour, rather than several hours. General Motors (to add 2,700 stations by 2025), Uber, and Meijer, a grocery store chain, are among the company's partners.
EVgo serves both retail and commercial customers with over 310,000 customer accounts. Additionally, it powers its charging stations entirely with renewable energy. The company operates over 800 fast-charging locations throughout 34 states, serving over 65 metropolitan areas. The company's charging stations, on the other hand, boast a charge time of between 15 and 45 minutes.
EVgo announced on January 13 that PlugShare, its EV community platform, had surpassed two million registered users worldwide. This is a significant milestone for the platform, as it further establishes PlugShare as the leading platform for locating and selecting public chargers used by EV drivers. PlugShare is intended to be an interactive resource for electric vehicle drivers. Drivers can access information about charging stations located nearby or along planned trip routes. Additionally, the EV community uses it to provide feedback on charging stations, share tips, and communicate with other EV drivers. With these taken into account, do you think EVGO stock is worth keeping an eye on?
4. The Volta (VLTA)
Volta, founded in 2010, is developing a network of electric vehicle charging stations and has connected 2,137 locations in 23 states as of September 2021, generating approximately 238,000 charging sessions per month. Volta is more innovative than its competitors in that it generates revenue through outdoor advertising on its chargers. Customers are supposed to be attracted to charging stations by partner locations such as Whole Foods, malls, and restaurants. While their car is charging, customers can shop or eat. Several locations even provide complimentary charging. Volta has already partnered with advertisers such as Starbucks and Netflix.
The company generated $20 million in revenue during the first nine months of 2021, but the revenue opportunity for the future appears to be substantial. Having said that, are you considering investing in BLNK stock?
A Spanish company, went public last October as a result of its merger with a special purpose acquisition company. In a nutshell, Wallbox develops electric vehicle charging and energy management systems. These enable users to monitor and control their energy consumption, thereby saving money. Its flagship product is the Pulsar Plus, a compact yet powerful and fast home EV charger. Additionally, the company offers a broad portfolio of charging and energy management solutions in over 80 countries for residential, semi-public, and public use.
WallBox has sold over 100,000 EV chargers to date, including 66,000 in the first nine months of 2021. In 2021, the Spanish company expanded to the United States, and its home EV charger, Pulsar Plus, has become an Amazon best-seller. Furthermore, the company announced last week that it will begin selling the Pulsar Plus, its best-selling charger, in Canada too.
Additionally, WallBox has partnered with residential solar company SunPower to integrate its EV chargers with solar panels. WallBox's growth could accelerate as the expected first choice EV charger provider for SunPower's 370,000 customers.
The company forecasted $24 million in sales in 2020 and another $79 million in 2021. Now, WBX is a New York Stock Exchange-listed company. Given this market entry, would you consider adding WBX to your watchlist?
It is critical to note that investing in EV charging companies' stocks entails significant risks due to the inherent uncertainty in this evolving space and the fact that EV charging companies are years away from profitability. While the road ahead appears to be difficult, the long-term outlook for these companies appears to be optimistic. The expansion of infrastructure and network goals will result in booms in manufacturing and other sectors, resulting in upward swings for companies involved in EV charging. Maintain vigilance, prepare, and position your portfolio for the surge.