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Charge Your EV Portfolio as Biden Promises Swift Transition

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As we know, U.S. President Joe Biden considers climate change as one of the top priorities of his administration and is highly optimistic about the power of green vehicles to battle the growing climate concerns. Keeping up with his stance to bring green vehicles into the mainstream, Biden announced on Wednesday the approval of the first round of funding for the creation of a nationwide EV charging infrastructure. With this first set of approvals, $900 million will be granted to build EV chargers across 53,000 miles of highway across 35 states. This is part of Biden’s bipartisan infrastructure package that includes $7.5 billion to establish a network of 500,000 EV charging stations across the country by 2030.

To capitalize on the massive EV push and the fast rollout of the charging infrastructure, it makes sense to keep a close watch on a few charging stocks like EVgo (EVGO - Free Report) , Blink Charging (BLNK - Free Report) and ChargePoint Holdings (CHPT - Free Report) . Before delving into the stocks, let’s glance through the promising prospects of the e-mobility space and the charging domain. 

Future is Electric

While EVs still account for a small share of global vehicle sales, they are poised to lead the transportation space in the coming years amid climate change concerns, rising bans on internal combustion engines (ICEs) and the proliferation of advanced technologies. Legacy automakers are revving up their e-mobility game and prioritizing resources to manufacture EV models over the low-margin traditional vehicles. Some auto companies have gone as far as announcing future dates in which car models will cease to carry the ICEs. While automakers are getting all charged up, countries, states and cities are also stepping up their clean energy and e-mobility targets.

Per the White House Fact Sheet dated Sep 14, 2022, companies have invested roughly $85 billion in the development of EVs, batteries and EV chargers in the United States since Biden took charge as president. So far in 2022, automakers have announced a $13 billion investment in green vehicles, indicating more than a threefold rise from the 2020 level.  Companies have earmarked $24 billion in investment in batteries and more than $700 million in EV charging. Major auto biggies are targeting NEV sales to account for 40-50% of their total sales by 2030.

Last month, Biden signed the Inflation Reduction Act— the boldest climate legislation in U.S. history. The bill seeks to transform the U.S. auto industry with incentives that would induce automakers to accelerate the production of zero-emission vehicles in an effort to meet environmental goals. He also signed the CHIPS and Science Act, which seeks to enhance the U.S. semiconductor supply chain to boost EV production and sales.

Notably, since the President took office, the number of EVs sold in the United States has tripled. In 2021, sales of green cars reached 6.6 million units, accounting for roughly 9% of the global vehicle market and marking solid growth from a mere 2.5% of the global car share in 2019. Per S&P Global Platts Analytics, global EV sales are expected to rise to 26.8 million units by the decade end.

Charging Space on a Roll

EV buyers have long been concerned about batteries and the availability of sufficient charging facilities. There’s a fear of running out of charge before either reaching the destination or a charging point. So, charging availability has often been a sticking point. Before electric cars take off in a big way, the rollout of public infrastructure is critical to quell the range anxiety for EV drivers. Thankfully, the development is taking place at a rapid pace.

The widespread availability of charging facilities and deployment of proper charging infrastructure will ensure a good driving experience for EV owners and are essential for the sustainable development of an EV future. While China is at the forefront when it comes to the rollout of publicly accessible chargers, efforts in the United States also look impressive. And much of the credit for that goes to the Biden-Harris administration, which is allocating enough funds to support the growth and deployment of EV chargers in the country.

Per, the global EV charging station market size is projected to increase from 2,354,000 units in 2022 to 14,623,000 units by 2027, implying a CAGR of 44.1%.

Plug in with Confidence With These Stocks

As EV penetration grows, so will the demand for charging stations. There are opportunities in the EV charging domain and getting your hands early on charging stocks can fetch handsome long-term rewards. Below we have highlighted three stocks, which should provide you good exposure to investing in the EV charging space.

EVgo: EVgo is the largest public fast-charging network for EVs in the United States. It is also the first charging firm to be powered by 100% renewable energy. At the end of the second quarter of 2022, EVGO operated more than 850 charging locations. Customer accounts increased from 377,000 as of Mar 31, 2022 to roughly 444,000 at the end of the second quarter of 2022. Last month, EVgo collaborated with Delta Electronics to advance nationwide access to EV charging.

In the last reported quarter, EVgo recorded revenues of $9 million, soaring 89% year over year. Network throughput increased to 10.1 GWh in the second quarter of 2022 from 6.1 GWh in the second quarter of 2021. For 2022, EVGO envisions revenues in the band of $48-$55 million, up from the prior forecast of $48-$50 million. Network throughput is expected in the range of 50-60GWh. The Zacks Consensus Estimate for fiscal 2022 top and bottom lines implies year-over-year growth of 118% and 34.5%, respectively. EVgo currently carries a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Blink Charging: One of the leading players in the EV charging space, Blink has deployed over 51,000 charging ports across 19 countries. The company is set to benefit from its strategic acquisitions, including Blue Corner and EB Charging, SemaConnect. BLNK closed the SemaConnect buyout in the last reported quarter. This transformative deal would enable Blink to gain full control over its supply chain, making it the only EV charging firm providing 100% vertical integration. 

For the second quarter of 2022, Blink generated total revenues of $11.5 million, which surpassed the Zacks Consensus Estimate by 30.64%. The top line also skyrocketed 164% on a year-over-year basis. Product sales, which are the bulk of BLNK’s total revenues, soared 170% from the comparable year-ago quarter. Service revenues jumped 154% year over year. The Zacks Consensus Estimate for 2022 sales implies year-over-year growth of 149%. BLNK currently carries a Zacks Rank #3 (Hold).

ChargePoint: This charging company is the market leader in North America in commercial Level 2 AC chargers. It is also actively focusing on expansion into European markets. At the end of the fiscal second quarter, ChargePoint had more than 200,000 activated charging ports. Acquisitions of has·to·be and Viriciti have accelerated CHPT’s position in the EV charging ecosystem. Strategic collaborations with Sonepar, Gatik, Wheels Donlen and others augur well. ChargePoint has delivered more than 123 million charging sessions so far.

In the last reported quarter, ChargePoint generated total revenues of $108.3 million, which surpassed the Zacks Consensus Estimate by 6.14%. The top line also surged 93% on a year-over-year basis. For the fiscal third quarter ending Oct 31, 2022, CHPT forecasts revenues in the band of $125-$135 million, implying a 100% year-over-year increase at the midpoint of the guided range. For the full fiscal year, it expects revenues of $450-$500 million. The Zacks Consensus Estimate for fiscal 2023 sales implies year-over-year growth of 100.2%. CHPT currently carries a Zacks Rank #3.

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