Buy the Dip in Switchback Energy

With its merger with electric vehicle charging station company ChargePoint nearing completion, now is the time to invest in special purpose acquisition company (SPAC) Switchback Energy (NYSE:SBE).

a chargepoint charging station

Source: Michael Vi /

SBE stock has been knocked down a peg in recent weeks after the company was forced to extend until today the deadline for shareholders to vote on the company’s business combination with ChargePoint. After the merger, the shares of Switchback Energy will begin trading on the New York Stock Exchange under the ticker symbol “CHPT.”

Switchback Energy was forced to give shareholders more time to vote on the deal with ChargePoint, a situation the company attributed to the fact that the majority of people who own SBE stock are retail investors. This delay did not sit well with investors, and Switchback Energy’s share price has fallen since early February to just under $35.

However, the ChargePoint deal is only delayed by a few weeks and will still go through as planned, presenting a good opportunity for investors who want exposure to the increasingly diverse and rapidly maturing electric-vehicle sector.

A New Angle

Until now, investors have been primarily focused on electric vehicle manufacturers such as Tesla (NASDAQ:TSLA), Nio (NYSE:NIO) and a host of others, many of which are not yet in the production phase or are making extremely niche products, such as Electrameccanica Vehicles Corp. (NASDAQ:SOLO). The latter company is producing a three-wheeled electric vehicle that has alternately been described as a “car,” a “buggy” and a “motorcycle.”

However, there are many different ways for investors to gain exposure to the fast-growing electric vehicle market. One way is to invest in the companies producing lithium and other materials used to manufacture the batteries that power electric vehicles. Lithium producers such as Albemarle (NYSE:ALB) have delivered solid returns over the past year.

Another new angle is to invest in electric vehicle infrastructure companies such as Switchback Energy and Blink Charging (NASDAQ:BLNK). These companies are developing the networks of charging stations needed to make the electric vehicle revolution possible.

Solid Returns

ChargePoint could rally sharply once its business combination with Switchback Energy is concluded and its shares begin trading in New York. ChargePoint has a sizable market opportunity ahead of it. The company has forecast that its electric vehicle charging network will increase to 2.5 million stations globally by 2025 from 115,000 at the end of 2020. ChargePoint also forecasts revenue growth of 60% annually through 2026.

Founded in 2007, ChargePoint sells the hardware, software and services related to electric vehicle charging stations and covers all aspects of the industry, from residential customers to large fleets of commercial vehicles. ChargePoint counts some impressive investors in its corner too, including auto giants Daimler (ETR:DAI) and BMW (ETR:BMW), as well as Siemens (ETR:SIE), Chevron (NYSE:CVX) and Baillie Gifford, one of the earliest and biggest Tesla shareholders.

The global electric vehicle charging infrastructure market is forecast to be worth $56.9 billion by 2026, and could be worth $190 billion by 2030, representing a massive potential market for investors who grab SBE stock ahead of the merger.

Buy SBE Stock

Switchback Energy is a SPAC that has huge potential to deliver for investors. The opportunity to get in on the ground floor of a company such as ChargePoint that is essential to the future of the electric vehicle market is too good to be ignored.

Rather than searching for another electric vehicle manufacturer in an overcrowded market, investors should try a new angle and invest in infrastructure such as the charging stations that are desperately needed to move the entire industry forward. Buy SBE stock before it converts to ChargePoint and the shares get electrified.

On the date of publication, Joel Baglole held long positions in TSLA, ALB and SBE.



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