This article first appeared on Trend Investing on December 20, 2019; therefore all data is as of this date.
Electric Vehicle [EV] charging stations or home charging are both fast becoming much-needed infrastructure to help support the EV boom. Based on the Bloomberg forecasts (10m sales pa by 2025, 28m pa by 2030, and 56m pa by 2040 of electric car sales) we can see there will be a massive need for new chargers each year.
It is worthwhile remembering that almost every electric car buyer will need to buy a home charger and it is the cheapest way to charge. Added to this will be the public chargers to help support longer trips or destination charging (work, hotel, etc.).
In this article I take a first look at the opportunity and the leading companies involved. I may follow-up with an article of one or two of the best opportunities.
The global fleet of EVs is forecast to soar to ~125m EVs by 2030
Source: Bloomberg
Forecasts for EV charging stations
- A 2018 KPMG report stated that Netherlands has the most charging stations per kilometres with 19.3 charging stations per 100 kilometers. China has 3.5, UK 3.1, Germany's 2.8, Japan 2.3, and USA 0.9.
- Statista (2019): In 2013, there were 5,900 high speed charging stations globally, and by 2020, this is forecast to reach 200,000.
- CSO forecast: (2019) "The Global Electric Vehicle Charging Station Market is expected to grow at CAGR 40.5% during the forecast period, 2019-2026 and will reach over USD 3.4 Billion by 2026."
- Market Future Research forecast (2019): "The Global Electric Vehicle Charging Station Market is expected to gain an unprecedented volume of 43,528.7 thousand units by 2025, with a CAGR of 41.79% during the forecast period (2019–2025)."
- Data Bridge Market Research forecast (2019): "Global Electric Vehicle Charging Stations Market is expected to grow at a healthy CAGR of 48.3% in the forecast period of 2019 to 2026."
- Bloomberg quoted a McKinsey study stating (2019): "A$72.48 billion in spending on charging equipment needed by 2030."
- China now has over 1 million charging piles (public and private).
Source: Market Future Research
Comments on the charging network opportunity
Within the EV charging space there are several opportunities such as:
- Charging networks that receive payment from customers to charge their EVs. This can be a moderate to high upfront CapEx with a re-occurring revenue stream; however varies depending on the company model.
- Sellers of charging equipment. This can be public or home charging equipment. Both areas have very large potential.
- New technology such as ultra-fast charging is becoming very popular.
- Software systems - To support charging, and charging payments.
- Other areas - Battery swapping, vehicle to home charging, smart charging (charging at off-peak times etc.), wireless charging, and vehicle to grid technologies.
EV chargers come with different charging speed options
My view is that the ultra-fast chargers are the future. Today that means a 350kW+ charger which can add 20 miles of driving range in 1 minute, or ~400 miles of range in 20 minutes.
For example, Porsche has started using ultra-fast chargers on the new Porsche Taycan that can add 60 miles in 4 minutes and 80% range in 15 minutes (most fast chargers offer 80% range in 30-40 minutes).
Note: Only certain electric cars with suitable batteries can accept ultra-fast charging for now; however, this will improve each year.
Source: Bloomberg
Below I focus on those companies that either have large EV charging networks, or are building them. Or those that supply the most popular charging equipment such as home chargers and ultra-fast chargers. Also a few charging network operators.
A look at some leading global EV charging companies
Tesla (TSLA)
Tesla has a global leading charging network. Tesla manufactures their own chargers. They are now up to version 3 (Supercharger V3) that are capable of delivering peak charge rates up to 250kW. Early Model S and X buyers have been granted some credit towards charging costs (vehicles ordered before November 2, 2018 receive 400 kWh (~1,600 km) of Supercharger credits annually) at Tesla's public charging network, whereas Model 3 buyers must pay. New S & X buyers if referred by a current Tesla owner get the same credits as mentioned above. Owners are billed per kWh (kilowatt-hour). Tesla does not share their superchargers with other companies (more details here) and does not look to make a profit from their charging network; however, this could well change in the future. Electrek quotes Tesla as saying public charging ‘will never be a profit center’ for the company.
For investors this means under the current system the Tesla charging network is not adding profit, so from a charging income point of view, there is no merit in buying Tesla. Of course, Tesla's global leading charging network helps add to Tesla's reputation and global leader status.
In March 2019 Tesla stated:
More than 99% of the U.S. population is covered by the network, and we anticipate similar coverage in Europe by the end of 2019. Recently, we passed 90% population coverage in China and are growing that number quickly. However, in order to drive continued electric vehicle adoption and further accelerate the world’s transition to sustainable energy, charging needs to be even faster, and the number of vehicles able to charge at a location in a day needs to be significantly higher.
Electric reported that as of July 2019:
Tesla has been talking about more than doubling the network over the next year.
The Tesla website gives the updated number of chargers as:
1,636 Supercharger Stations with 14,497 Superchargers.
Tesla's global charging stations map (Australia not shown, but has some Tesla chargers) - Red (open now), Grey (coming soon)
Source: Tesla website
A Tesla charging station with many charging units
Ionity (private)
Ionity is Europe's largest EV fast charging service provider. It is owned by a consortium of Daimler (OTCPK:DDAIF, OTCPK:DDAIY), Volkswagen Group (OTCPK:VWAGY) (Porsche, Audi), Ford (F), BMW Group (OTCPK:BMWYY), and Hyundai (OTC:HYMTF). They are currently building out an initial network of 400 fast charging stations in Europe.
Electrify America
Electrify America is Volkswagen's unit created under a settlement in the automaker’s emissions scandal, is spending A$2.90 billion on refueling stations in the U.S. over a decade.
Qingdao TGOOD Electric Co. Ltd [CH:300001] "TELD" - Price = CNY 17.95
TGOOD is China's largest EV charging service provider with 50,000 charging piles in 183 cities in China. Globally they have 180,000 charging terminals in greater than 280 cities. TGOOD state they have the "largest installed base of Electric Vehicle Charging Systems in the world". TGOOD also state they are "the world leader in eHouse solutions and the world's largest EV charging infrastructure provider today. We manufacture all eHouse and electrical components in-house."
TGOOD has a market cap of CNY 17.56b. Analysts consensus is a buy with a price target of CNY 19.00 representing ~6% upside.
TGOOD's financials and forecast
Source: 4-traders
China's leading EV charging companies as of January 2019
Source: Statista
Note: BYD Co [HK:1211] (OTCPK:BYDDY) (OTCPK:BYDDF) also sells chargers and recently teamed up with charging infrastructure provider AMPLY Power.
EVgo (private)
EVgo state on their website:
EVgo is the (US) nation’s largest and most reliable public electric vehicle fast charging network. With more than 750 fast charging locations in 66 metropolitan markets, EVgo fast charges more drivers, more miles than any public charging network.
ChargePoint Inc. (private)
ChargePoint focuses only on EV charging and is a global leading charging service provider. Investors in ChargePoint include Chevron, Daimler AG, BMW, Siemens, and American Electric Power Co.
ChargePoint quote:
Someone plugs into the ChargePoint network every two seconds. We’ve delivered more places to charge than anyone else, and people count on us for charging all day, every day.
- 106,100 charging spots around the world.
- 70.5 million charges delivered (and counting).
- A ChargePoint account can give you access to 80% of AC charging and 99% of DC fast charging in North America.
- 60% of Fortune 50 companies are ChargePoint customers.
- 175 partners amplify our efforts."
A ChargePoint charger
Blink Charging Co. (BLNK) - Price = USD 2.11
Blink is among the largest owner/operators of Electric Vehicle Charging Stations in the United States. The Blink network connects more than 15,000 charging stations across the United States. Blink generally does not sell their chargers but partners with host locations with flexible options.
Blink's principal line of products and services include Blink EV charging network (“Blink Network”), EV charging equipment, and EV charging services.
Blink has a market cap of USD 55m, and is not yet EPS positive. Revenue is forecast to rise rapidly from USD 3m in 2018 to USD 12m in 2021.
Analysts consensus estimate is a buy with a price target of USD 5.00, representing 137% upside.
Blink's financials and forecast
Source: 4-traders
Blink EV Chargers
Tritium Pty (private)
Tritium is an Australian-based supplier focused only on high-power DC ultra-fast chargers for electric vehicles. Tritium makes ultra-high speed chargers that can add more than 215 miles of range in 10 minutes. Customers include Ionity GmbH - a consortium of carmakers, including Volkswagen and Ford.
There are more than 3,000 Tritium fast-charging stations installed around the world in 30 countries. The 50kW model generally sells for around $30,000, while a more powerful 350kw version sells for around $100,000.
In August, the AFR reported: "Tritium has won deals in the past few months to supply fast chargers at 120 sites in Europe for the Ionity network, and for up to 2,500 sites across the United Kingdom as part of a BOX Energi network..... Tritium has about 50 percent market share for fast chargers in Norway."
Tritium is backed by major investor Gilbarco Veeder-Root, who invested $58 million into the company. Gilbarco is the market leader around the world in petrol bowsers and owned by Fortive Corporation (FTV).
ABB Ltd [SWX: ABBN] (ABB)
ABB is a Swedish multinational corporation headquartered in Zurich, Switzerland, operating mainly in robotics, power, heavy electrical equipment, and automation technology areas. They also make fast chargers for electric vehicles, including electric buses. ABB sell modular charging systems with charging powers available from 175kw up to 350kW.
Webasto Group (private)
Webasto provides a mix of home and on-the-road charging solutions. Webasto has an online shop selling EV charging points (~ €700). You can read more here.
Some others
- Driivz (private)- Driivz offers an operating system for global EV charging. The company’s cloud-based platform supports over 120 types of EV chargers and includes billing capability, roaming interoperability and self-healing functionality. The Driivz platform is also vehicle to grid-enabled, allowing EV drivers to act as virtual power plants by becoming suppliers, receiving compensation and reducing energy consumption. The company already counts global industry players such as EVgo, ElaadNL, ESB and Centrica as customers, while it manages some of the largest public EV charging networks in North America and Europe. In total, tens of thousands of EV chargers are linked to Driivz’s platform, which is also used by more than 300,000 EV drivers in 17 countries.
- Eaton (ETN) - Eaton Corporation PLC manufactures engineered products for the industrial, vehicle, construction, commercial, and aerospace markets. The Company offers hydraulic products and fluid connectors, electrical power distribution and control equipment, truck drive train systems, engine components, and a wide variety of controls. They also sell EV charging equipment. Eaton conducts business worldwide.
- PowerHydrant (private) - Has developed an autonomous robotic EV charging system. The system handles high power charging and solves the issue of who charges an autonomous vehicle and the future issue of charge point blocking.
- General Electric (GE) sells home chargers and public charging equipment.
- Innogy SE [GR:IGY] (OTCPK:INNYY)
- Efacec Power Solutions
- Engie Group [FP:ENGI] - Engie acquired EV-Box (a large European electric vehicle charging company)
- Schneider Electric [FP:SU] [GR:SND] (OTCPK:SBGSF)
- Siemens AG [GR:SIE] (OTCPK:SIEGY)
- RWE
- Liikennevirta Oy (Ltd.)
- SemaConnect
- ClipperCreek
- Allego B.V.
- Leviton Manufacturing Co., Inc.
- Alfen N.V.
- The New Motion B.V
Note: BP (BP), Shell [LN:RDSB] (RDS.A) (RDS.B) (OTCPK:RYDBF), Chevron (CVX) and other gasoline companies are also very active in the charging network opportunity.
Risks
- Most car manufacturers don't plan to make money from EV charging.
- Car charging is often a small side business for some companies.
- Technology change - Newer faster charging technology is disrupting some slower charging technology.
- Management and currency risks.
- The usual stock market risks (liquidity, sentiment etc.).
Further Reading
- Bloomberg: Fastest Electric Car Chargers Are Waiting for Batteries to Catch Up
- (2017) Investing in EV Infrastructure: Where the Money Is Going
- Top 20 electric vehicle charging station companies
- China has world's largest EV charging infrastructure network
Conclusion
My current view is that the biggest opportunity is in home chargers as all buyers will need one. These are mostly sold by the car manufacturers, but also sold by some large companies such as Qingdao TGOOD Electric Co. Ltd.
The next best opportunity is in the manufacturers of fast chargers and ultra-fast chargers that will ultimately be adopted to build out the infrastructure, as we have with gasoline stations today. For now, Tesla leads that area in the US and Europe with their large network of destination and superchargers (latest is version 3 - 250kw). Porsche and others (ABB Ltd etc.) are introducing even faster chargers (ultra-fast chargers - 350kW) which look for now to become the most popular.
Another opportunity lies with companies that build a network of chargers. Just like the gasoline companies own the gas stations. Leader here include ChargePoint, EVgo, Blink, Ionity, and Qingdao TGOOD Electric Co. Ltd.
Unfortunately, many of the charging companies are either not listed, a car manufacturer, or not a pure play on EV charging. Nonetheless a few interesting opportunities exist such as Blink in the USA.
I intend to do an update article in a few months and to continue to assess the opportunities for investors.
Happy to hear of any pure-play charging names I missed. As usual all comments are welcome.
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