As the economy grows, electric vehicle (EV) charging stocks could be the next profitable investment in the stock market. More and more consumers are turning to electric vehicles to save the environment. As this demand rises, the need for EV charging will increase, which will boost the value of EV charging station stocks.
Although we have a lot of time before majority consumer adoption, now is a great time to invest in EV charging stocks.
This article explains everything you need to know about the industry outlook, benefits, and risks. We also highlight the best EV charging station stocks to watch for as the market appreciates.
Table of Contents
- EV Charging Station Industry Outlook
- The Impact of COVID-19
- EV Charging Station as a Low-Cost Alternative
- Asia Pacific Market Dominance
- Why Should You Invest in the EV Charging Station Stocks Going Forward?
- Top 10 EV Charging Station Stocks
- 1. Rivian
- 2. Beam Global
- 3. Volta Inc.
- 4. ChargePoint Holdings
- 5. EVgo Inc.
- 6. ABB Ltd.
- 7. SunPower Corporation
- 8. Blink Charging Co.
- 9. NIO Inc.
- 10. Tesla Inc.
EV Charging Station Industry Outlook
As the EV charging station industry continues to evolve, here are some things we need to understand before investing.
The Impact of COVID-19
Not only did COVID-19 alter the global economy, but it also impacted the EV charging stations market.
We saw countless lockdowns implemented across the world. People stayed at home, which minimized traveling and transportation. No one needed a car to travel to work or meetings anymore. Therefore, we saw a severe drop in EV charging station usage.
Beyond the COVID-19 breakout, the pandemic instilled a critical long-term impact.
Many businesses allowed employees to work remotely indefinitely. Some companies did not renew their leases. Because employees do not need to travel as much now, the automobile industry could slow. With less driving to work every day, the need for EV charging stations diminishes.
EV Charging Station as a Low-Cost Alternative
Petroleum products continue to be more expensive for consumers, especially in emerging countries.
One solution for these people is not to drive as much (easier said than done, of course). Another alternative is to move toward electric vehicles, which have a lower operating cost. Manufacturers are also exploring new ways to build long-lasting EV batteries, which will extend the duration.
A perfect storm of low costs could boost demand for EV charging stations. The lower cost of electric vehicles and batteries is sure to have a positive influence on stocks.
Asia Pacific Market Dominance
Over the next 5-6 years, the Asia Pacific market expects to have the largest EV charging share. One of the main drivers for this growth is the Chinese economy. Consistent economic growth brings advanced technology, which will promote the rise of EV charging stations.
Another growth factor is the Chinese government, which pushes the use of electric vehicles.
As of 2020, the government invested $2.4 billion into strengthening the EV charging station system within the country. Governments in Korea, Japan, and India are also announcing initiatives to boost the number of electric vehicles in the country.
Why Should You Invest in the EV Charging Station Stocks Going Forward?
You might ask the question: is it worth investing in EV charging station stocks?
The electric vehicle and charging station industry is the engine behind the renewable energy movement. Because millions of electric vehicles will require regular charging, the charging industry will flourish. So if you want to stay ahead of the curve, it’s pretty much the safest choice.
Besides consumer cars, here are a few other vehicles that will require electric charging:
- Commercial vehicles
- Delivery vans
- Delivery trucks
According to Blink Charging, over one million electric vehicles exist in the United States. By the year 2030, that number is expected to appreciate 13 million.
In addition to government renewable energy plans, here are several other reasons why you should consider investing in the electric vehicle charging market:
- Disruptive, innovative technology will soon replace gas stations
- Many businesses will leverage the flywheel concept to scale
- Changing customer preferences and high-growth potential will drive rising EV revenue
- Customer loyalty and recurring revenue models will also drive EV charging station company growth
- If momentum grows for fighting climate change, the EV charging station industry will benefit
Top 10 EV Charging Station Stocks
Now that we understand the industry outlook, benefits, and risks, you must decide if you want to invest or not. You could always mitigate your risk by investing in exchange-traded funds (ETFs).
However, you could maximize your returns by investing in a single company.
Below are the top companies to watch over the next decade as the industry blooms. For each company, we define its unique advantages. That way, you can make an educated purchasing decision.
Rivian Automotive (RIVN) is an electric vehicle manufacturer from California. It is a popular name in EV conversations because it is closely tied to Amazon. The company makes EV pickup trucks and SUVs.
Rivian went public in the early weeks of November 2021 and debuted at an $80 billion valuation in total.
The company is comparable to Tesla, General Motors, NIO, and Ford because it is currently building a vast distribution of fast chargers. Rivian’s goal is to successfully establish a presence of 10,000 Level 2 chargers and 3,500 fast chargers in North America by the end of 2023.
2. Beam Global
Beam Global, founded in 2006, has established itself as a critical player in solar-powered products. It is a cleantech business with a vast EV charging station network. A unique aspect of the company is that its products run 100% on renewable energy.
Beam Global earned its respect in the industry by securing well-known clients like Johnson & Johnson, Pfizer, Alphabet, and others. It also forged relationships with the U.S. Marine Corps and NASA through long-term contracts. The revenue growth is also something to highlight. In Q3 2021, sales rose to $2.02 million, a 63% increase from Q3 2020.
3. Volta Inc.
Volta’s unique business model is popular with investors, and it is a major reason why it made the list. This company applies a digital advertising twist to its selling strategy. It provides an EV charging network and sells advertising space on its screens. Because consumer attention is paramount for marketing, this long-term strategy could be pivotal for Volta.
This digital media portion of the company generates a large revenue share. The company made $8.5 billion in sales in Q3 2021, a 77% boost from the prior year. Its behavior and commerce business segment contributed to $7.36 billion of that total.
Volta is a worthwhile investment opportunity because of the company’s positioning in our daily lives.
It strategically places charging ports where its customers work, live, play, and shop. Not only do its charging ports benefit the local business community, but it also makes it easy for the consumer. The large monitors make for the perfect advertising space.
ChargePoint Holdings delivers innovative EV charging solutions to commercial, fleet, and residential customers.
Based out of California, the company also maintains monitors and installs EV charging stations. We like the long-term growth potential because of its subscription-based business model, which will produce recurring revenue.
When it comes to Level 2 charging, ChargePoint is a frontrunner in the North American market. As of January 2021, the company established a presence in 132,000 private and public charging locations in North America and Europe. It also has a pair of fast-charging stations: the Express Plus and Express 250.
Most of the company’s revenue comes from commercial clients, like stores or offices.
These locations will offer charging stations to attract employees or other businesses to its grounds. One thing to note is that the company does not produce revenue from selling its electricity as a utility. ChargePoint makes its money by offering EV charging stations and effectively maintaining them.
The company’s revenue breakdown is as follows:
- Commercial customers: 70% of total revenue
- Residential customers: 14% of total revenue
- Other revenue: 5% of total revenue
There are a few risks associated with ChargePoint like profit droughts, slow growth, and the threat of commoditization.
Although the business hit a revenue drought in 2020, it expects to see an upswing for a 37% revenue increase in FY 2022.
5. EVgo Inc.
EVgo is a viable player in the industry because of its robust fast-charging station network. Not only did the company post record revenues and volumes in the second quarter, but it also has a reliable scaling plan in place. With the increase in electric vehicle adoption, EVgo is in a prime position with its rapid expansion model.
Its DC fast charging business model is powered fully by renewable energy (as of 2019). EVgo also collaborated with General Motors to launch a program for charger deployment
The company is set to have a network of 3,250 DC fast charging ports by 2025. According to the company, there are over 2,000 additional charging stalls being constructed.
This set of stalls will be live within the next 10-24 months. The future quarterly earnings announcement will be something investors watch closely, which should give a good idea of how the expansion is coming along.
EVgo will also continue to benefit from policy support. Governments continue to push for global greenhouse gas reductions in hopes to fight climate change.
6. ABB Ltd.
ABB is one of the most established manufacturers in the world when it comes to large electrical equipment, robotics, and automation. Not only is the company one of the biggest employers in Switzerland, but it has also been around for almost a quarter-century.
The company’s three business segments showed profitability in the first and second quarters. ABB is also innovating its electrification business segment. It recently revamped and transformed the e-mobility division. Its other segments include motion, robotics, and discrete automation, and process automation.
ABB’s key geographical growth comes out of China, which produced a 24% increase year-over-year. Analysts see plenty of running room in additional nations attached to segments like South America, North America, and the EU.
When it comes to the increasing demand, it saw a sharp increase within data centers, residential buildings, commercial buildings, food and beverage, water, e-mobility, machine builders, chemicals, and materials.
Long-term growth is imminent with ABB because of its strong global presence. You can find ABB’s products in 85 countries, including a total of 400,000 global chargers.
The company is also the world leader in terms of EV charging revenues. ABB also recently acquired the majority stake in Chargedot, echoing its commitment to the long-term growth strategy.
For over ten years, SunPower has established itself as a reliable solar company. However, the company made a major pivot within the last year. SunPower broke out its manufacturing business into a separate organization, which used to be its largest competitive advantage.
The company also redirected its focus to commercial and residential solar by getting rid of its utility-driven developments. As the company expands its energy storage solutions, we are starting to see SunPower make money in the financial statements.
Revenue generation has been SunPower’s largest challenge so far. Because of the competitive industry, the company has faced a challenge in generating long-term profit from selling solar panel solutions. Due to its rejuvenated focus on commercial and residential solar, the profit margins are a lot better.
The company’s other large hurdle is debt. After SunPower invested several hundreds of millions toward building its manufacturing business, it saw disappointing returns. Because it spun off this business into Maxeon Solar Technologies, the debt on the balance sheet looks much cleaner.
There are several other transformations to look for in the coming decade for SunPower. Instead of being an installer and manufacturer of solar, the company is unveiling initiatives for energy management and storage for businesses and homes.
Now that SunPower turned around its margins, it must convert these pivots into sustainable volume growth. because of its services and software strategy, this goal should be much easier to accomplish.
SunPower’s holistic approach to energy management will also serve as a critical competitive advantage. It now has a reliable system for controlling how solar power is sent, stored, or consumed within the grid.
The only thing to be aware of is the rising interest rates. Companies like SunPower benefit from lower interest rates to help finance long-term projects. If interest rates proceed to go up, it could hinder these innovative projects.
See Related: How to Invest in Renewable Energy
Blink Charging Co. holds one of the most expansive eV charging networks across the globe. The company has a foothold in 13 countries with over 30,000 EV charging stations. Blink Charging is also scaling rapidly, as it launched over 3,000 EV charging stations in Q3 2020, an increase of 351% from the previous year.
Although the stock has dipped recently, it is sitting at $17 below its November peak. According to the firm H.C. Wainwright, the company has a current price target of $50, which is approximately double its current trading price.
9. NIO Inc.
NIO is an electric vehicle manufacturer from China promoting internet-based, mobile charge and plug systems. After the company skyrocketed 3,000% between March 2020 and January 2021, it was nicknamed the “Chinese Tesla.” Although it dropped 40% from its all-time high to below $40, it is still a promising stock with growth potential.
The company’s battery-swapping offering is its most unique competitive advantage. This battery as a service product strategy eliminates the need to plug in an EV to recharge.
All drivers need to do is drive into a battery-swapping area, which will recharge the car in five minutes. The company has over 500 stations and is soon expanding into Norway.
This business model produces 4 million swaps in its first of 2018, and NIO announced that it will establish 700 of them by the end of the year. Toward the end of 2025, the company plans to have 4,000 battery-swapping stations installed. This battery as a service program decreases the EV car cost by $10,000, a massive competitive advantage.
NIO’s EV production is also noteworthy. On the first day of October, the company reported 10,628 vehicle deliveries in September, which was approximately a 126% increase from the previous year.
10. Tesla Inc.
Tesla is one of the most exciting EV charging stock investments today.
The company’s innovative (but controversial CEO, luxury vehicles, and futuristic offerings make it a roller coaster of an investment.
The company has the powerful potential to disrupt the power generation and automotive industries with its EVs, Avs, solar generation systems, and batteries.
Tesla is in a class of its own when it comes to manufacturing electric vehicles. The company is in the best position to succeed if electric vehicles overtake gas-powered vehicles. Its robust network of superchargers and expansive battery gigafactories give the company a strong competitive advantage and foothold in the industry.
The company proclaimed that it would decrease its battery costs by over 50% over the next few years, which could yield a higher profit margin. When you combine this with its large supercharger network, Tesla serves as a reliable investment for years to come.
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