The Best EV Charging Stocks to Watch
Electric vehicle (EV) ownership is on the rise, and with many countries looking to phase out sales of new petrol or diesel cars by the end of the decade, this trend is only going to continue. In order to facilitate all these new electric cars on the road, countries need adequate EV charging solutions, and this is where EV charging companies come in.
In this article, we will take a look at the best EV charging stocks to watch in 2024 and explain how to start investing in EV charging companies.
Table of Contents
Electric Car Charging Stocks: The Risk and Reward
As countries around the world work towards net zero commitments, electric vehicles appear to be the future of the automobile industry.
With this transition already well underway, there are various industries which are poised to benefit from an increase in demand for EVs. The producers of EVs themselves, of course, stand to benefit, but so too do battery producers, copper and lithium miners, and companies which provide EV charging solutions.
The number of EVs on the roads is growing. In 2022, 14% of all new cars sold were electric, up from 9% the previous year and 5% the year before that. Whilst analysts differ on the speed at which EV ownership will increase, they all agree that it will continue to grow at a fair clip as the world attempts to reach net zero emissions.
As the number of EVs on the roads continues to grow, demand for charging stations is growing in tandem, and will continue to do so. Whilst this means that there is ample room for EV charging companies to grow, the problem with investing in any fledgling industry is being able to separate the companies which will eventually thrive from the ones which will remain stationary or fail.
Although many young EV charging stocks have been helped by generous green subsidies and tax credits, these government incentives presumably won’t last forever and, sooner or later, they will need to learn to stand on their own two feet.
Furthermore, higher interest rates have made the cost of servicing debt more expensive, something which tends to be felt more profoundly by younger companies. There is also grounds for concern that rates staying higher for longer may slow down the EV transition, as it becomes more expensive for consumers to fund new vehicle purchases.
Top EV Charging Stocks to Watch
In terms of pure play EV charging stocks, there are not a great deal for investors to choose from and a consistently profitable operation is hard to come by, if it even exists. However, there are a few options which investors may want to keep an eye on for the future.
We will take a look at two pure play EV charging stocks. Nevertheless, during our examination, it may become apparent that, for those seeking exposure to the EV charging industry, it could be more prudent to avoid pure play options for the time being and opt for a more diversified EV company.
Blink Charging
Blink Charging is a US EV charging equipment company with more than 70,000 charging points contracted, sold or deployed worldwide.
In the last few years, the EV charging company’s revenue has risen impressively, hitting $61 million in 2022, up from $21 million in 2021 and $6 million in 2020. In the first six months of 2023, revenue jumped again by 156% to $55 million.
Despite soaring revenue, the company is yet to turn a profit. In 2022, Blink’s reported an operating loss of $89 million, significantly deeper than the loss of $56 million the previous year.
Nevertheless, it’s important to look at this operating loss in the context of rising revenue. In fact, although losses widened significantly in 2022, the EV charging company managed to improve its operating margin from -266% in 2021 to -146% in 2022. In 2020, operating margin was -286%.
Okay, that’s still not great, but it’s moving in the right direction. As operating margin measures operating income as a percentage of total revenue, it demonstrates that Blink is learning how to convert a higher percentage of its revenue into income.
This highlights an issue for electric vehicle stocks in general, which is that producing EV charging stations is capital intensive. However, this is something which can improve if and when sales increase. Not only are the high costs spread over a higher number of units, but businesses also tend to benefit from economies of scale.
ChargePoint
ChargePoint is a larger operation than Blink. It is a market leader in EV charging solutions, operating throughout North America and Europe, with more than 255,000 places for their customers to charge.
ChargePoint has also seen revenue grow impressively over the last couple of years, growing from $146 million in 2020 to $241 million in 2021 and jumping to $468 million in 2022.
However, as with Blink, ChargePoint needs to learn how to turn this higher revenue into profit whilst continuing to grow to meet the increasing demand for EV charging capacity. In fact, we could almost have combined the sections for both EV charging stocks, as they paint a very similar picture.
In 2022, ChargePoint’s operating losses deepened from $265 million the previous year to $342 million. Nevertheless, again, as with Blink, operating margin is moving in the right direction, improving from -110% in 2021 to -73% in 2022.
A More Established EV Player
The price charts of both EV charging station companies above show us stocks which are struggling in the market. But why?
High inflation, rising interest rates and a generally uncertain economic outlook have all played a part in souring investor sentiment towards non-profitable growth stocks. However, another development in the industry has also put downward pressure on EV charging stocks in recent months.
This recent headwind has come in the form of an EV heavyweight which has started muscling into the charging industry and stealing potential customers from other smaller players. That heavyweight? None other than the EV king, Tesla.
In order to provide charging solutions to the growing number of its cars on the roads, Tesla has constructed a network of more than 50,000 Superchargers throughout North America, Asia-Pacific and Europe.
These Superchargers had previously only been available to Tesla drivers. However, Tesla has been signing an increasing number of deals with other EV manufacturers to open up its network to other EVs.
One analyst from Wedbush Securities estimated that Tesla’s Supercharger network has the potential to generate between $10 billion and $20 billion a year by the end of the decade. If accurate, this represents a lot of revenue that smaller EV charging companies, such as Blink and ChargePoint, will potentially miss out on.
Consequently, whilst pure play EV charging stocks struggle to convert increasing revenue into profit, an option for those seeking exposure to the EV charging industry might be to consider a more diversified EV option which is already profitable, such as Tesla.
How to Start Investing in EV Charging Companies
With an investing account from Admirals, you can buy shares in all three of the EV charging companies highlighted in this article. Follow these steps to learn how.
- Open an Invest.MT5 account with Admirals and log in to the Dashboard
- Click ‘Invest’ next to your account details to open the MetaTrader Web Terminal
- Search for an EV charging stock and open the price chart
- Press ‘Create New Order’ and enter the number of EV charging shares you wish to purchase before hitting ‘Buy’ to send the order to the market.
Investing with Admirals
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EV Charging Station Companies – FAQ
Can I Invest in EV Chargers?
For those looking to invest in EV charging, it is possible to gain exposure to the industry by buying shares in EV charging companies.
What Companies Make EV Charging Stations?
There are many companies around the world which produce, sell and operate EV charging stations. Examples of publicly traded EV charging station companies include ChargePoint, Blink Charging, EVgo, Wallbox and Allego NV.
Who Are the Biggest EV Charging Companies?
In terms of market capitalisation, ChargePoint is one of the largest pure play EV charging companies in the world.
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