The electric vehicle industry seems to be slowing since the demand for EVs is dropping. However, this is temporary. With countries committed to electrification of vehicles, the demand will gradually increase and we will see more EVs on the road. With this context in mind, it has led to this list of ev charging stocks to buy.
For the electric vehicle market to succeed, it is important to have the necessary infrastructure; this is where several EV charging stocks will benefit. The industry is already crowded, and it is natural since it is still in the early stages.
There could be a few winners in the long term, but smart investors can identify long-term players right in time. This is when you can make the most of your early-stage investment.
Let’s look at the three EV charging stocks to buy this December.
EVgo (EVGO)
EVgo (NASDAQ:EVGO) plays a huge role in transforming the EV industry in the United States. The company has collaborated with two of the biggest players in the industry, General Motors (NYSE:GM) and Amazon (NASDAQ:AMZN) and this will work as a catalyst in the long term. In terms of financials, the company reported an EPS of negative nine cents and the revenue came in at $35.1 million, which is an impressive 234% rise year over year. Post results, the company raised its fiscal revenue guidance to $148 million and $158 million which is up from the previous range of $120 million and $150 million.
The company proved its worth with an addition of 106,000 customer accounts in the quarter. While the company isn’t profitable yet, it is still an early-stage company that has raised $12.7 million in the preliminary awards from the National Electric Vehicle Infrastructure program. The company will be using the funds to roll out additional chargers in the coming months.
With General Motors and Pilot Travel Centers, the company aims to improve the EV infrastructure. It aims to establish over 25 fast chargers before the end of this year and has already opened 17 charging stations. They aim to expand to about 200 by the end of 2025.
Further, its collaboration with Amazon has also brought the company to the forefront. It will develop an Alexa-integrated EV charging experience. Drivers will be able to utilize Alexa for assistance in the location of nearby charging stations. Exchanging hands for $3.50 today, the stock is trading much lower than the all-time high of $22. It is down 15% year to date but I would like to see it hit the $4 level very soon.
Tesla (TSLA)
An industry leader, Tesla (NASDAQ:TSLA) is working with several other EV makers to ensure quick and convenient charging. If you manage to look beyond its cars, you will realize that Tesla has quite an extensive charging network which is growing each year. It has very successfully managed to transform a revenue item into an income-generating segment.
The company can generate over $5 billion in revenue annually through the charging network. Several companies have already joined the company’s network, and many more could soon join. It is currently one of the largest charging infrastructure providers and remains at the top of the industry.
Even if you think Tesla’s growth is slowing or the gross margin is down, you need to look at its growing charging network. It is giving competition to some of the biggest charging companies, and the recent drop in the margins could be temporary. Tesla continues to be a leader, and I do not think it will disappoint. The company could invest in the charging segment in 2024 and we could see it reach new highs.
The company is currently working on ramping up the production of Cybertruck, and it has already delivered 10 at the launch event. There were several concerns about the inability of the company to mass-produce the trucks but it looks like the company is working on increasing production to ensure significant delivery numbers in 2024.
Trading at $252, the stock is up 133% year to date but still lower than the 52-week high of $299. There is a lot of negativity surrounding TSLA stock but I believe it is too soon to write it off.
ChargePoint (CHPT)
Next on my list of EV charging stocks to buy is ChargePoint Holdings (NYSE:CHPT). One solid reason to invest in the company is its global charging network, which Tesla and EVgo do not have yet. While Tesla could achieve global expansion, it will take some time, and ChargePoint is already there. You should not expect the stock to pick up anytime soon, but it will certainly generate returns in the long term.
The stock has been under pressure due to the decrease in demand, and building charging infrastructure can take a lot of money. This is why it had to decrease the revenue guidance after the third quarter results.
CHPT stock has dropped to $2.68 from the highs of $46 in 2020. In the recent quarter, the company saw a 12% decrease in revenue year over year to hit $110 million, while the net loss was $158.2 million. The management preannounced that the revenue would fall from $108 million to $113 million, lower than the previous estimate of $150 to $165 million.
The stock might be down today, but there is a lot more to come, and if you have the patience to hold this stock, you can take home solid returns. ChargePoint remains a strong player in the EV charging space, and it is enjoying a first-mover advantage right now. We could see the company perform much better in the first half of 2024.
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.
