ChargePoint: A better EV investment?

Many current investors are looking to find the next big electric vehicle (EV) company such as Tesla or NIO, which have increased 219% and 639% respectively in the last year. These high growth stocks are exciting to investors but should be dealt with a side of caution. Although these are more speculative investments, these stocks should account for a conservative amount of any portfolio.

Rather than try to find the next big EV company, however, investors may want to look to invest in companies in the EV infrastructure sector such as ChargePoint Holdings (CHPT).

ChargePoint is an American based electric vehicle infrastructure company that operates EV charging stations globally and sell commercial, fleet, and residential products. CHPT generated around $146 million in revenue for 2021, however they project 60% compound annual revenue growth through the next 6 years to exceed approximately $2 billion by 2027. Therefore, this does make CHPT more of a long-term play, however as EVs make up roughly 3% of car sales worldwide, there is plenty of room for growth.

Additionally, Joe Biden announced that roughly $15 million will be spent to start rolling out EV charging stations, hoping to reach 500,000 in 2030 in the US alone. Assuming this takes place, it will be a great catalyst for the stock, especially given their current market share. ChargePoint has over 132,000 charging locations and claims to have over 70% of the market share in North America and is also operating in 16 European countries.

More recently, ChargePoint and Mercedes have announced a partnership called “Mercedes me Charge”. This partnership allows the Mercedes EQ EV line drivers to access ChargePoint’s mapping and payment features. The future looks good for ChargePoint, especially with increased EVs, partnerships, and government policies, looking to tackle climate change.

In terms of ChargePoint’s stock price, it is trading at around $31 (as of 27/06/21) roughly 30% off its all-time high. So, for long term investors looking to get into the EV market, CHPT may be a good option given how they are already established worldwide and are looking to expand aggressively.