The electric vehicle (EV) industry is giving us mixed signals.
The earnings and delivery numbers throw light on the fact that manufacturing an EV is not an easy job. Some of the top automakers are hitting the brakes on their electric-vehicle ambitions due to a drop in consumer demand. Consumers are not willing to spend a higher amount since high-interest rates have made the cars more expensive. However, the government is not giving up on its 2030 goals and EVs will still continue to be on the road.
The current drop in the demand for EVs could be temporary and many who have already bought one will need an EV charging facility. So, even if there is a decline in EV demand, EV charging stations will continue to function. We are well aware that the charging facilities are not in line with EV sales and this means companies will continue to work on building charging stations and EV owners will continue using them.
If you think now is not the right time to invest in EV stocks, consider investing in EV charging stocks to make the most of the transition towards a greener future. Here are the three EV-charging stocks to buy.
ChargePoint (CHPT)
ChargePoint (NYSE:CHPT) has made a unique space for itself in the EV ecosystem and is growing its market share with time. The company has a solid charging infrastructure which is thriving due to the widespread adoption of EVs. As the demand for EV charging points increases, ChargePoint will benefit. It reported impressive financials and has doubled the EV charging network in the past few years.
ChargePoint reported a 39% year-over-year growth in revenue to hit $150 million and expects the third quarter revenue in the range of $150 to $165 million and an annual revenue in the range of $605 to $630 million. One interesting number in the financial report is the subscription revenue which has grown 48% year over year and as long as this number keeps growing, the company is moving in the right direction. If the company can manage to grow subscription revenue faster, that will further improve the gross margin.
CHPT recently unveiled a new set of tools that can help with fleet management. They are aimed at helping owners manage their fleet and have features like vehicle telematics, charging station management and mobility services. It will also help the fleet owners make a smooth transition to EVs. This could lead to more fleets using their charging stations but for now, it may not have any direct impact on the financials.
Trading at $2.49, the stock is down 72% year to date and has been moving in the downward direction for the past few months. However, buying the stock below $5 is a good chance to make significant gains when the market improves. As a business, ChargePoint is solid and it will remain relevant in the years to come.
Tesla (TSLA)
If you can look at Tesla (NASDAQ:TSLA) beyond its cars, you will notice that it has a solid charging system which is growing each year. The management has very carefully transformed an expense into a revenue-generating segment.
Its charging technology could become U.S. standard and we might see the company generating solid revenue from this segment. Several EV makers have adapted Tesla’s charging technology and we could see more companies joining them. The company has over 50,000 superchargers across the U.S. and 1,974 charging stations.
While Tesla isn’t a pure-play EV charging company, it is still one of the biggest charging infrastructure providers and has managed to pull the plug on some of its top competitors. If you believe in the future of EVs, this is one stock worth betting on. TSLA stock has taken a beating after reporting quarterly results. The company missed on earnings and revenue in the third quarter which left investors disappointed. The revenue came in at $23.35 billion and the EPS was 66 cents per share. Its Cyber Truck is under production and the first delivery is scheduled on Nov. 30.
While the company is solely focusing on the production aspect right now, the charging segment is set to grow in the coming years and we could see it make a significant contribution to the total revenue. TSLA stock is exchanging hands for $207 and has dropped 17% in the month which means now is a good time to make your move. Several companies are depending on Tesla for charging infrastructure and as they sell more EVs, we will see a higher demand for charging stations. It is one of the best EV charging stocks to buy and hold for the long term.
EVgo (EVGO)
EVgo (NASDAQ:EVGO) is another under-the-radar EV charging stock to consider. The company is a leader in charging network operators and develops fast charging stations for electric vehicles. It is an early-stage company and EVGO stock is trading at just $2.19.
In the second quarter results, the company showed an impressive 457% year-over-year increase in revenue to hit $50.6 million. It has also hiked the full-year projections and now expects revenue in the range of $120 million to $150 million.
While it is not as big as Tesla, the company has 3,200 stalls that are under operation currently and as more stalls are deployed, the revenue will show strong growth. It is still making losses but could turn profitable very soon. It has a massive market to cater to and is currently only focusing on the deployment of charging stalls across the U.S. If it expands to other countries in the coming years, we could see better financials.
The company has received a $13.8 million grant from the Ohio Department of Transportation. EVgo has had an exceptional second quarter and if the company continues to grow at the same pace, we could see it reach higher in the coming years. This is when the stock will soar to a new high and you will be able to make the most of your investment. Do not expect any immediate returns from EVGO stock. Invest in it if you have the patience and are ready to wait.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
