Although many analysts have proclaimed for years that electric vehicles represent the future of transportation, this sentiment carried more narrative appeal than meaningful substance. The problem is, a cleaner, greener methodology for mobility cannot be possible without a robust EV charging network. After all, not everyone is a millionaire with access to their home-based charging solutions. If you’re looking for EV stocks to buy, you need to expand your search to include companies that can solve that problem.
Not everyone has the luxury of a small number of miles in an urban setting. Yes, that’s wonderful if a 100-mile range vehicle is more than enough for you. However, everyone has different schedules and requirements. As well, some folks like to take long trips across city borders. Again, just because you don’t do that doesn’t mean other drivers follow suit, thereby necessitating EV charging networks, if only for inclusivity.
On a related note, if the electric alternative wishes to lose the alternative tag and become the everyday go-to solution, the infrastructure that is available now simply is not adequate. Consider that even for direct current (DC) fast chargers, you’re talking about an average of 30 minutes to fill to 80% capacity. That’s approximately a 500% increase in time over fueling a combustion car, necessitating robust EV charging networks.
Fortunately for fans of next-generation transportation solutions, an EV charging network rollout is a priority under the Biden administration’s proposed $2 trillion infrastructure plan, according to a CNBC report earlier this year. Under the plan, the president promises to have at least half a million EV charging devices installed across the U.S. by 2030. That would certainly go a long way in helping the credibility of the underlying sector.
Recent dramatic news will have ripple effects for personal mobility as a whole. Therefore, it may be time to consider adding stocks to buy that will benefit from the EV charging rollout:
- Tesla (NASDAQ:TSLA)
- Toyota (NYSE:TM)
- Panasonic (OTCMKTS:PCRFY)
- ChargePoint (NYSE:CHPT)
- QuantumScape (NYSE:QS)
- Stem (NYSE:STEM)
- Volta (NYSE:VLTA)
To be fair, just because the public sentiment for EV charging is strong doesn’t mean that this market is a cakewalk. As The Verge pointed out, the fragmented nature of charging networks is one of the biggest hurdles facing mainstream integration. In addition, the cost to rollout this innovative shift will be massive. Therefore, readers should apply the same vigilance on these stocks as any other sector.
EV Charging Stocks to Buy: Tesla (TSLA)
I want to be very careful with Tesla. As an equity unit that’s priced 376 times trailing earnings and 141 times forward earnings, I was and am skeptical about TSLA moving higher. At the same time, if we’re talking about the spirit of this article — which stocks can benefit from EV charging network additions — Tesla is a clear winner.
Again, I’m personally hesitant about TSLA because it seems too much positivity is baked into the share price. However, two factors readily come to mind: number one, I’ve been wrong before about TSLA and more importantly, the recent news that Hertz (OTCMKTS:HTZZ) will purchase 100,000 Tesla vehicles for $4.2 billion was a shocker.
Of course, the deal suggests that Hertz is in a much better place following its catastrophic bankruptcy last year, one of the negative iconic moments of 2020. But the bigger implication for the potential rollout of a national EV charging network is that such a massive acquisition of electric cars suggest consumer demand is strong.
To use the commonly misquoted line, if you build it, they will come. Plus, the discount relative to its all-time high might appeal to brave investors.
As a legacy automaker, Toyota does not seem to be a natural beneficiary if the U.S. launches a national EV charging network. Yes, it makes reliable cars at affordable prices, but the company has built its reputation on combustion power. It’s a new paradigm, so TM appears irrelevant.
However, like so many other legacy names, Toyota is getting into the EV arena, recently unveiling its first all-electric car. Ultimately, the inclusion of renowned brands will symbiotically help not only the rollout of national EV charging networks but international ones as well. It’s not just Americans that are longing for cleaner, quieter roadways.
Just as significantly, Toyota is a significant player in solid-state battery research and development, along with innovations in other battery formats. While many EV proponents claim that current technology fits in perfectly with their lifestyle, these folks need to remember one thing: Mainstreaming anything requires adaptability to a range of income stratums.
With improved battery technologies, EV integration will be much more feasible for the modest income spectrum.
EV Charging Stocks to Buy: Panasonic (PCRFY)
Once one of the powerhouse brands in personal consumer electronics, Panasonic faded significantly against superior competition. But that doesn’t mean the company has been condemned to permanent irrelevance. On the contrary, Panasonic is now counted among the heavyweights for EV batteries, supplying the powerplants for Tesla.
Further, Panasonic made headlines when it unveiled a prototype battery, designed to help its longtime U.S. partner lower EV production costs. And if you want to know where Tesla needs to aim next, it’s in the income strata that can reasonably afford a $40,000 car in a post-pandemic environment where borrowing costs may be higher and where the government is not handing out stimulus checks.
But it’s not just about Tesla. Any automaker can make an expensive car that appeals to a specific demographic. The reason why Toyota was so successful for decades is because they made cars that almost anybody can afford without sacrificing basic quality and reliability.
For the equivalent to happen with the electric car, battery costs must come down. Should that happen with Panasonic’s new batteries, you can expect PCRFY to be a beneficiary of the EV charging rollout.
Starting from the time when shares of ChargePoint soared in late 2020, I’ve been generally cautious about its prospects. While the signs pointed to broader acceptance of electric cars — which in turn bolstered the narrative of EV charging plays like CHPT — it was difficult to ignore the challenges stymieing mainstream integration.
As I’ve previously stated, the current economics of EVs are problematic. The cheapest fully functional EV (that is, a vehicle with four wheels as opposed to a three-wheeled trike) is priced just under $30,000. And with the pandemic imposing all kinds of tension in the automotive retail market, that could be much higher in reality.
Further, the fragmented nature of present EV charging networks has imposed problems on drivers. In fact, 18% of California EV drivers between 2015 and 2019 switched back to combustion-powered cars primarily due to the hassles of charging. Obviously, that’s got to change for EV integration to be the new normal.
Well, if the national EV charging rollout occurs in earnest, ChargePoint may benefit substantially due to wider comfort and acceptance of electric cars.
EV Charging Stocks to Buy: QuantumScape (QS)
Among the key reasons why the EV charging rollout has so far encountered obstacles is the broader practicality of what’s being asked. As you probably know, finding an empty pump at the gas station in a busy part of town can be troublesome enough. And that’s with the average refueling time of a mere five minutes.
Now imagine that the vast majority of drivers own EVs. Physical laws and the materials that we’re currently using don’t allow for electric cars to charge adequately within a five-minute time frame. Therefore, unless we have plentiful charging stations, the electric transition will be problematic. But that’s also why QuantumScape as a speculative wager is so intriguing.
As you probably know, QuantumScape specializes in solid-state batteries. Featuring backing from major investors, QS has always carried massive upside potential. But the idea of converting this fantastical innovation from the laboratory setting into something commercial has long been a roadblock not just to QuantumScape but other organizations.
Still, if you don’t mind speculating, QS could profit handsomely if the federal government gets serious about moving toward broader EV integration.
Billed as the world leader in artificial-intelligence-enabled smart energy storage solutions, Stem is among the most intriguing names in the advanced energy market. Through its microgrid platform, for instance, enterprise-level clients can enjoy energy resilience in case of an unexpected power outage. Since such disruptions impose a severe (and unnecessary) economic cost, many have piled into STEM for its relevant services.
But with the company’s commercial EV business, there’s now one more important reason to be bullish. While most of the headlines involving electric mobility focuses on personal vehicles, many companies are now feverishly working to develop electric trucks. However, fleets of such transportation vehicles running across the country will require a significant overhaul in our EV charging network.
Potentially, Stem could bridge the gap between theory and actuality with its energy storage system for smart charging. While the business is obviously in its nascent stage, that could change over time if charging networks for personal vehicles are built out, facilitating greater demand for all things electric.
EV Charging Stocks to Buy: Volta (VLTA)
If you want to add some speculation in your EV charging-related stocks to buy, you might want to consider Volta. Recently, the equity unit of the charging station provider — which offers a distinct take through its integrated advertising solution — shot up as the underlying company hit a milestone, delivering 100 million electric miles to drivers.
As with other sector developments, the news represents optimism on two fronts. First, it’s a great shot in the arm for Volta, which is competing against other rivals in the charging space. Second, the milestone achievement provides even more evidence that American consumers are embracing the gradual electrification of mobility.
To be fair, not everything about VLTA is encouraging. Because it entered the public market via a merger with a special purpose acquisition company, questions naturally arise about the company’s viability. So far this year, SPACs have underperformed benchmark indices. And VLTA itself has been volatile, printing much red ink.
Still, SPACs are improving overall and it seems VLTA is coming along for the ride. Further, with its own sector fundamentals moving in the right direction, Volta could offer something for the risk-tolerant speculator.
On the date of publication, Josh Enomoto 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management and healthcare.