Electric vehicle (EV) charging stocks are in focus on Tuesday, the first U.S. trading session of the holiday-shortened week. Today, ChargePoint (NYSE:CHPT) is down more than 7% while EVgo (NASDAQ:EVGO) is down over 2%. Blink Charging (NASDAQ:BLNK) was also down 3.4% at one point today, although it’s now trading relatively flat on the session. Finally, Wallbox (NYSE:WBX) is down more than 3% as of this writing.
What’s hitting these stocks today?
Rivian (NASDAQ:RIVN) will reportedly adopt Tesla’s (NASDAQ:TSLA) charging standard. If it was just Rivian making this move, most of these EV charging stocks would likely not be getting hit so hard. The reality is, however, that many of these stocks are near 52-week lows or all-time lows — even as the stock market powers higher.
The reason? Tesla and its Supercharger network.
Ford (NYSE:F) recently inked a deal with Tesla that will provide “Ford electric vehicle customers access to more than 12,000 Tesla Superchargers across the U.S. and Canada, doubling the number of fast-chargers available to Ford EV customers starting Spring 2024.” All of a sudden, that makes buying a Ford EV that much more reassuring. Reducing range anxiety has been a key barrier to knock down in order to sway customers toward EVs.
Not long after the Ford deal, General Motors (NYSE:GM) also made a deal with Tesla.
What’s Next for EV Charging Stocks?
ChargePoint is the biggest stock on the list above, with a current market capitalization of $2.9 billion. In fact, it’s more than twice the size of the next biggest stock on the list. Given the threat that Tesla has now become, it’s perhaps not surprising to see CHPT shares get hit the hardest here.
Tesla has already opened up its Supercharger network in Europe, as the vehicles use a standardized charging connector. However, that’s not the case in the United States. Still, the company has now begun to open up its network to other automakers like Ford, GM, Rivian and potentially Hyundai (OTCMKTS:HYMTF). Tesla also plans to double its number of chargers in the U.S. by 2024, according to Electrek.
As Citi analysts put it:
“Though we don’t think recent U.S. NACS developments (GM/Ford – Tesla) dramatically change the LT fundamental picture for EVgo and ChargePoint, it does introduce NT ‘headline’ risk while shining a broader light on general charging reliability issues often cited for non-Tesla chargers.”
The question for companies like ChargePoint is: Can it keep up?
Tesla operates about 45,000 Superchargers and that figure is expected to keep growing. While EV infrastructure is a key focus from the U.S. government and other world governments, Tesla has already built out a rather formidable solution.
Of course, it won’t wipe out all of the EV charging stocks or make other charging stations completely useless. But it does create some wonder as to what will happen to smaller charging players as this arena continues to grow.
On the date of publication, Bret Kenwell did not hold (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.
