There have been plenty of special purpose acquisition companies (SPACs) in the electric vehicle (EV) space. Yet, Decarbonization Plus Acquisition Corporation II and Tritium (NASDAQ:DCFC) aren’t like all the others, and there could be a rare buy-up opportunity with DCFC stock right now.
Decarbonization Plus Acquisition Corporation II is really just a shell company. It completed a business combination with Tritium in January.
As a result, DCFC now represents an investment in an ambitious provider of direct-current (DC) fast chargers for EVs. Tritium CEO Jane Hunter declared that the business combination with Decarbonization Plus Acquisition Corporation II is “transformative for the acceleration of electrification.”
That’s a bold statement, but it might actually be true. As we’ll see, Tritium is quickly growing its sales — and with a new manufacturing facility, the company is poised to charge ahead of the competition.
A Closer Look at DCFC Stock
It’s typical for pre-merger-announcement SPAC stocks to stay close to the $10 level. Therefore, it shouldn’t be too surprising that DCFC stock traded for roughly $10 prior to the disclosure of the business combination with Tritium. Here’s where it gets really interesting. Instead of immediately popping after the announcement, the stock sank to $6.50.
Then, on Feb. 8, Tritium issued an exciting press release, which we’ll definitely discuss today. Clearly, investors were pleased with the announcement as they pushed DCFC stock up to $19.75. That rally didn’t last too long, however. Over the next few days, the stock turned around and fell to $8 and change.
Some folks would say that it’s a bad omen when a SPAC stock breaks below $10. That may or may not be true — but after we learn more about Tritium’s value proposition, anything below $10 might look like a major bargain with DCFC stock.
Tritium by the Numbers
It’s possible that until today, you’d never heard of Tritium. Yet, this company could become a household name someday.
Tritium has some impressive stats to back up a bullish thesis for DCFC stock:
- More than 41 countries have Tritium chargers.
- Tritium has sold over 6,700 chargers around the world.
- Apparently, Tritium’s chargers can withstand a -35 degrees Celsius
(-31 degrees Fahrenheit) operating temperature in some of the world’s coldest climates.
- Plus, in some of the world’s hottest climates, Tritium’s chargers can evidently withstand an operating temperature of 50 degrees Celsius
(122 degrees Fahrenheit).
Those chargers are built to last — but is the company built to last? Tritium’s success will depend on its ability to sell chargers, and the data looks quite impressive in that regard.
During the second half 2021, Tritium posted sales of $98 million, up 416% year-over-year. Also, during the three months ended Dec. 31, 2021, Tritium booked roughly $41 million in revenue, which was more than double the company’s prior-quarter revenue.
A Thriller in Tennessee
Even after having posted those impressive fiscal data points, Tritium isn’t content to rest on its past accomplishments.
Rather, the company is preparing for bigger and better things with the establishment of a new DC fast charger manufacturing facility in Tennessee.
This facility is expected to house up to six production lines for Tritium’s DC fast chargers, and to bring more than 500 jobs to the region over the next five years. Production is expected to start at Tritium’s new Tennessee facility during the third quarter of 2022.
Understandably, Tritium’s CEO stated that she is “thrilled” to work with the Tennessee governments on this initiative.
“With the help of the hard-working residents of Tennessee, we expect to double or even triple our charger production capacity to further our product distribution throughout the United States,” Hunter predicted.
The Bottom Line
If Tritium actually manages to double or triple its charger production, that would undoubtedly have a positive effect on the DCFC stock price.
However, investors will need to be patient. Production ramp-ups don’t happen overnight.
At the end of the day, it appears that Wall Street doesn’t fully appreciate Tritium’s potential for growth and disruption in the EV charging market. Therefore, a stake in DCFC stock today could providing outstanding returns in the coming months.
On the date of publication, David Moadel 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.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
