Tesla-GM Pact Brings Volatility to EV-Charging Stocks
Shares of ChargePoint Holdings (ticker: CHPT ) and EVgo ( EVGO ) were both down more than 3% in early trading Monday. Later in the day, ChargePoint was up more than 5% and EVgo was down about 1%, while
S&P 500
was up 0.6 percent. The shares fell 13.2% and 11.7% respectively on Friday.
General Motors (GM) announced Thursday night that it would adopt Tesla’s (TSLA) charging plug, causing all the volatility. Investors are concerned that either the cost of adding a Tesla plug to existing networks is high, or that Tesla will monopolize the EV charging business.
Uncertainty is never good, but both fears seem a bit exaggerated. Shares of EV charging company Tritium DCFC ( DCFC ) fell 1[ads1]0.8% on Friday. They were up 4.2% in Monday trading, apparently because the company said it would support and add the Tesla plug to the company’s existing network of charging stations.
“Tritium is committed to enabling the rapid transition to electric vehicles by providing our customers and electric vehicle drivers with fast and reliable charging options that can charge all models of electric vehicles,” Tritium CEO Jane Hunter said in a press release. “As the EV industry aligns with global technology standards, Tritium is committed to supporting all connectors widely used in our primary markets of Europe, North America and the Asia-Pacific region.”
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Tritium adding the plug is not a surprise. All players, and equipment manufacturers, will do the same. ABB (ABBN.Switzerland) makes equipment that EL charging companies buy. It announced on Friday that a Tesla plug would be added as an option for its products.
The news is of course positive for Tesla, which operates as the largest electric car gas station chain in the US with approximately 17,000 available plugs. Agreements with GM and Ford Motor (F) mean that more electric cars will pull up to Tesla charging stations, but Tesla and other electric cars will also use other chargers, just as they do today.
Blink Charging stock ( BLNK ) fell 10.6% Friday, even though most of its business isn’t in the fast-charging business, the kind Tesla operates. Blink makes several so-called Level 2 chargers that provide about 20 miles to 30 miles of range per hour, and people might see them in an office building or train station.
Blink shares were up 12.2% on Monday, while Tesla shares were up 2.1% after rising 4.1% on Friday. Blink shares rose one cent from where they closed before the GM announcement.
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The market has added about $45 billion to Tesla’s market value in the past two trading days, as investors realize it is a chain of gas stations, not just an electric car maker. On the other side of the seesaw, EV charging stocks have lost about $300 million in market value over the course of these two days.
Something feels a little off.
Investors should keep in mind that the total US EV charging infrastructure is expected to grow four to five times by the end of the decade. By the end of 2022, the U.S. had about 37,000 fast chargers, of which Tesla operates about half, and about 121,000 slower chargers, according to Bloomberg BNEF.
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China ended 2022 with around 750,000 fast chargers and one million slower chargers. Western Europe ended 2022 with around 89,000 fast chargers and 540,000 slower chargers.
Write to Al Root at allen.root@dowjones.com
