2020 was essentially a watershed moment for electric vehicles (EVs). As sales in the rest of the industry slumped, global EV sales accelerated at an incredible 43% in 2020. Moreover, it is projected that the sector will grow at a compound annual growth rate of 29% in the next decade. As a result, total EV sales will account for 32% of the total market share of new car sales. Hence, the need for more charging infrastructure is apparent, making EV charging stocks a fascinating investment option with long-term potential.
Therefore, EV chargers are likely to get busier, and station economics will improve over time. The sector will also support the U.S. government, as President Biden’s infrastructure plan contains $300 billion for EVs. The plan covers purchase incentives, infrastructure development, and manufacturing.
There are currently a handful of players in the EV charging space that focus on different niches. A few of them are trading publicly, while a few are in line to be, through merger transactions with shell companies. This article discusses the stocks in this industry with the most potential for sustained growth in the future.
- ChargePoint Holdings (NYSE:CHPT)
- Tortoise Acquisition Corp. II (NYSE:SNPR)
- TPG Pace Beneficial Finance (NYSE:TPGY)
EV Charging Stocks: ChargePoint Holdings (CHPT)
ChargePoint Holdings is the top EV charging station company in the United States, with over 135,000 charging ports. It recently closed out its SPAC merger with Switchback Energy in a deal worth $2.4 billion. CHPT stock is incredibly positioned to generate massive revenues and robust earnings regardless of which EV rules the roost. Additionally, its rising market share in Europe is simply the icing on the cake.
ChargePoint recently released its results for the fiscal year 2020, where it generated roughly $146.5 million. Revenues came in slightly higher than its 2019 figure of $144.5 million, which is staggering, based on how the pandemic reduced car usage by roughly 80%. Moreover, it projects its revenues to exceed $200 million in 2021, which appears to be just the beginning. ChargePoint will remain the frontrunner in the charging space as the EV revolution gains speed.
EV Charging Stocks: Tortoise Acquisition Corp. II (SNPR)
Shell company Tortoise Acquisition Corp. II will merge with up-and-coming EV charging company Volta sometime this year. The transaction carries an enterprise value of $1.4 billion and will provide $600 million in proceeds to Volta. The combined company has the potential to stand out from the crowd with its unique business model and robust expansion strategy.
Volta offers a unique “fremium charging” model whereby it makes money by selling advertising on its charger screens. Its chargers are free for the first 30 minutes, where advertisers can showcase their products to the EV owners. So far, its strategy has paid dividends, as it’s among the most used EV charging stations in the country.
Moreover, it plans to grow its charging stations from 1,500 today to over 26,000 in 2025. Additionally, it also expects its revenue per site to increase at a CAGR of 41% in the next decade. On top of that, it also plans to expand its business internationally with its business model. Moreover, you can grab SNPR stock for dirt cheap.
EV Charging Stocks: TPG Pace Beneficial Finance (TPGY)
TPG Pace Beneficial Finance is another blank check company that plans to merge with an EV charging operator. The operator in question is EVbox, which is Europe’s largest charging solutions provider. So far, it has shipped an impressive 235,000 charging ports. It offers the widest variety of products and solutions in the EV charging realm, with unique software that offers useful data analytics. Additionally, TPGY is one of the most attractively valued stocks in the sector.
Looking ahead, EVbox forecasts its revenues to rise from €70 million in 2020 to about €225million in 2023. Moreover, it expects robust growth in revenues through its diversification strategies. It is actively expanding in the U.S. and has partnered with French electric utility company Engie to facilitate its entry into other markets. Additionally, it plans to increase its margins by introducing additional services like mobile software to add more value to its products.
On the date of publication, Muslim Farooque did not have (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.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.