Nothing like some electric vehicle battery news to charge up the trading week! With that in mind, DPW Holdings (NYSEMKT:DPW) just made a big announcement. The company plans to roll out its EV charging stations at fast-food chains around the United States. Unsurprisingly, DPW stock is surging as a result. So what do investors need to know now?
To start, DPW Holdings is a California-based holdings company that focuses on so-called disruptive technologies. As part of this, its Coolisys business focuses on power electronics. Fortunately for DPW stock, this means that Coolisys is forging ahead in the world of electric vehicles and EV charging.
This is exactly where the big announcement comes in. Early on Monday, DPW Holdings shared that its Coolisys business has established a new program. Through this endeavor, it will install its AceCool charging stations at regional and national fast-food chains.
Essentially, DPW Holdings will use capital it has on hand to fund the rollout of the program. From there, DPW and Coolisys hope that franchise owners and operators to install AceCool chargers on their properties. Involved parties would share advertising and network usage costs, and therefore also share in the resulting revenue.
So what are the next steps? Well, DPW Holdings says it soon hopes to announce its first partner, a national franchisee that manages 1,000 locations. From there, the company says it could announce further partners as soon as the first quarter of 2021. Also initially, this program will focus on California, Nevada and Canada.
No wonder investors are bidding up DPW stock. Essentially, DPW Holdings had previously surged on announcements of its EV charging plans. Now it looks like those plans are coming to light.
DPW Stock and EV Charging Plans
So as DPW stock surges higher Monday morning, how should investors view the news? Importantly, the first thing to note is the potential for failure. Even DPW Holdings itself acknowledged that there is no assurance this new program will be successful. That means you should approach this high-flying name with caution and continue to look for updates on the program.
However, there are also a few things working for the company right now. To start, demand for electric vehicles continues to surge. By 2025, some estimates call for 10% of all global passenger vehicle sales to be electric. That estimate grows to 58% by 2040. With that in mind, there is a big incentive for companies to start prepping for increased national adoption. Charging stations are a necessary part of this increased adoption. Putting it all together then, DPW Holdings and DPW stock could get a nice boost from helping make EVs more convenient for consumers.
There is one more specific catalyst at play. It turns out, the fast-food partnership program could be quite helpful for DPW Holdings. Why? One thing to keep in mind is that Blink Charging (NASDAQ:BLNK), a much more established player in the space, has a similar business model. Importantly, it has worked with McDonald’s (NYSE:MCD) locations, putting convenience first. Could this pay off for DPW stock?
Keep a close eye on it here. Shares are up more than 30% to start Monday.
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On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.