Investors are backing off of electric vehicle charging companies, a key player in the Biden administration’s wider climate agenda, The Wall Street Journal reported Tuesday.
Major companies in the industry — including ChargePoint, EVgo and Blink Charging— have seen their stock prices tumble over the past year as investors worry about their profitability, a sign of potential trouble for an industry that the White House is counting on to reach its aggressive longer-term EV targets, according to the Journal.
The administration has set aside billions of dollars to boost the industry, which it will need to thrive in order to develop a nationwide network of charging stations.
ChargePoint’s stock price is down 74 percent in 2023, while EVgo and Blink Charging have seen their shares lose 21 percent and 67 percent of their value, respectively, according to the Journal.
ChargePoint, which the administration has touted in the recent past, is also subject to a class action lawsuit that alleges company executives engaged in securities fraud by making misleading statements that unduly inflated the company’s share price.
“I think the investor class has grown weary of the industry’s lack of profitability,” Blink Charging’s CEO Brendan Jones told the WSJ.
EV charging companies once received lofty valuations from investors, Jones told the WSJ.
The Biden administration spent $7.5 billion in the bipartisan infrastructure law to help build out a nationwide network of 500,000 charging stations in order to help reach its goal of having 50 percent of all new car sales be EVs by 2030.
McKinsey, a leading consulting firm, has estimated that there will need to be about 1.5 million public chargers installed by 2030 if that target is to be achieved, according to the Journal.
At present, there are nearly 160,000 public chargers available at approximately 60,000 locations nationwide.
EV charging companies are generally struggling to turn a profit right now, but they expect to attain profitability within the next year or two, according to the Journal.
However, the wider EV industry is lagging despite the Biden administration’s efforts to support it, and charging companies find themselves in a difficult bind:
More consumers need to switch to EVs to help these companies improve their performance, but consumers may be hesitant to do so if the reliability of the nation’s charging infrastructure remains inconsistent.
As the Journal described it, it’s a “chicken-and-egg challenge.”
Currently, the vast majority of charging infrastructure is concentrated in more densely populated coastal areas as opposed to more rural areas of the country, according to the Department of Energy.
ChargePoint, EVgo, Blink Charging and the White House did not respond immediately to requests for comment.
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