Race For Energy Independence: The 4 Best Charging Station Stocks
Predicting the future of the electric vehicle industry is an intimidating task. Tesla has a hefty head start but legacy automakers like Ford and GM are quickly catching up. On top of that, sleek newcomers like Lucid Motors and Rivian are also setting high expectations. However, all of these EV companies have a shared need. This is the need to charge their vehicles. Instead of trying to pick a winner in the EV race, it might be much easier to just invest in charging station stocks.
I’ve already put together a comprehensive list of the top EV charging station stocks. In this article, I’ve selected my four favorites to go a little more in-depth.
The Race for Energy Independence
There’s one reason, in particular, that the electrification of America is so exciting. This is because it’s a bipartisan issue.
Today’s political environment is extremely polarized. Sometimes, it seems as if Blue and Red disagree with each other just out of principle. It feels like there’s literally nothing that Democrats and Republicans will agree on. Except for energy independence. Democrats support energy independence because it means pushing the country towards clean, renewable energy. Republicans support it because it puts America first and means less reliance on foreign nations.
This is very good for the EV industry. This bipartisan support means that there is a high chance of government assistance, regardless of who is in office. Thanks to the Russia/Ukraine conflict, this issue has become even more mainstream in the past few months.
The Russia/Ukraine conflict is highlighting the risks of a globalized economy. Ukraine and Russia are major exporters of key natural resources. Now that these supply chains are down, it’s throwing the global economy out of whack. For the U.S., this event has exacerbated the need for energy independence.
President Joe Biden already signed his infrastructure bill in 2021. This bill allocates $7.5 billion specifically for building out charging ports. Additionally, the money will be used to build 500,000 additional EV chargers throughout the country. For reference, there are currently only 46,500 chargers in the U.S.
More recently, there’s also talk of Biden invoking the Defense Production Act. This is legislature could invest up to $100 billion to boost U.S. output of critical materials used in EV batteries. The main goal of the act is to reduce U.S. dependence on foreign supply chains. This could have trickle-down effects into EV charging station stocks.
Top Charging Station Stocks to Invest In
No. 4 Nio (NYSE: NIO)
Ironically, the first on this list of charging station stocks is not a U.S. company. This means it has little to gain from America’s desire for energy independence. However, Nio offers a unique service as an EV charger that’s worth taking a look at.
Nio is mainly known for producing electric cars. To its customers, it offers four different ways to charge its vehicles:
- Traditional charging stations: Nio currently has 729 charging stations.
- Power Swap: This is a patented technology where Nio swaps a depleted battery of a Nio with a fresh one. The swapping process takes just three minutes to complete. Nio currently has active 888 power swaps.
- Power Mobile: This is a roving van that carries a charging station. Nio owners can use Nio’s app to order this van to their location for a recharge.
- 24/7 Charging Valet: This is a service where a Nio attendant will collect, charge and return a customer’s Nio.
With such a range of charging options available, it’s easy to see why customers might prefer Nio. The company clearly goes above and beyond to make recharging as easy as possible. For this reason, Nio is worth keeping an eye on as one of the best charging station stocks.
No. 3 Proterra (Nasdaq: PTRA)
Proterra operates as a triple threat EV company, making it a great addition to this list of charging station stocks. It offers electric vehicles, batteries and charging solutions. Proterra also goes exclusively after the commercial sector. So far, Proterra has sold 1000+ EVs, 300 batteries and 46 charging stations.
When most people think of EVs, they think of Tesla. This is an image of a sleek, futuristic sedan. However, there’s just one problem. Tesla does not produce commercial vehicles (yet). This creates a massive hole in the market for industrial machines.
Think about all of the diesel-powered school buses, trucks, trailers and construction vehicles. These are massive gas-guzzling machines for which there is no electric alternative. This is the problem that Proterra is trying to solve. Proterra’s main solutions are fully-electric buses and commercial fleets. For this reason, Proterra could be one of the top beneficiaries of Biden’s American Jobs Plan.
Massive fleets of electric buses can’t fuel up with a standard charger. This is why Proterra also offers commercial electric charging systems. Its largest charger can charge up to 40 commercial EVs at once. The machine charges 20 vehicles, rotates automatically and charges the next 20.
Sales have been slow to get started for Proterra. Its 2021 annual revenue was $242 million, up just 23% year-over-year (YOY). This is fairly low for the high-growth EV sector. But, there is some good news. Commercial clients like school districts and cities don’t like to take risks.
First, Proterra needs to secure deals with schools districts and municipalities. If it provides a quality service at a good price then good word-of-mouth should spread to neighboring towns. If this happens then Proterra could become the go-to electric fleet choice for municipalities.
Keep reading for more information on charging station stocks.
No. 2 Volta Inc (NYSE: VLTA)
Out of all the EV charging stocks, there are only a few that have really differentiated themselves. One such company is Volta Inc. Volta is a major EV company whose products are compatible with most major EVs. And, there’s one major factor that separates Volta from other companies: it offers free charging.
Volta is able to offer free charging by using a business model powered by advertising. Each of its charging stations comes with a massive screen that shows ads. In total, it has over 2,000 charging stations. Each of these stations can show different ads round the clock based on location, time or the person who is charging up. It’s essentially the same business model that Google and Facebook use. For example, a free product/service, powered by ads.
If you own an EV then Volta is a no-brainer choice. Honestly, lots of people would probably drive out of their way if it meant charging up for free. It essentially reduces your cost of EV ownership down to close to $0. The only things you have to pay for are insurance, maintenance and a car payment if you have one.
Since this is such a sticky offering to consumers, it’s easy to see Volta quickly becoming the preferred charging option. However, keep in mind that Volta just went public in 2021. It’s also still unprofitable. It will undoubtedly take some time to see if free charging is sustainable in the long run.
Charging Station Stocks No. 1 Tesla (Nasdaq: TSLA)
It’s hard to not give Tesla the number one spot as one of the best EV charging station stocks. In addition to being the largest EV manufacturer, it already has the largest global network of fast chargers. On top of that, as a major U.S.-based EV company, it’s in the best position to receive government subsidies.
Most of the other charging station stocks rely mainly on investor funding. For the most part, profitability is still a few years out. This isn’t the case for Tesla. In 2021, Tesla reported annual revenue of $58.3 billion and a net income of $5.52 billion. In addition, these numbers were up 70% and 665% respectively YOY. This is free-flowing cash that Tesla can sink into building out more charging stations to keep up with demand.
Tesla’s already got a lengthy head start in the EV charging game. As of now, it’s Tesla’s game to lose.
I hope that you’ve found this article on the four best charging station stocks to be valuable! Please remember that I’m not a financial advisor. I’m just offering my own research and commentary. As usual, please base all investment decisions on your own due diligence.
About Teddy Stavetski
A University of Miami grad, Teddy studied marketing and finance while also playing four years on the football team. He’s always had a passion for business and used his experience from a few personal projects to become one of the top-rated business writers on Fiverr.com. When he’s not hammering words onto paper, you can find him hammering notes on the piano or traveling to some place random.