Key points:
- ChargePoint and EV charging stocks tumble of Buy American concerns.
- Analysts have singled out the DoT for skirting the government mandate.
- Investors are concerned that funding to EV charging firms will be slashed.
The ChargePoint Holdings Inc (NYSE: CHPT) stock price edged lower during premarket trading amid concerns that companies manufacturing EV charging stations were not meeting their Buy American mandate, which requires them to source up to 55% of their raw materials from the USA.
Critics have pointed out that the Department of Transportation has a history of not adhering to its Buy American mandates, which has caused the US to lag behind its global peers in manufacturing, especially in steel and iron production. Unlike other Federal agencies, the DoT has had 40 years of “Buy America” mandates that it has never honoured.
Also read: Here Are The 3 EV Stocks You Need In Your 2022 Portfolio.
Analysts and experts have opined that the DoT has always requested waivers on its Buy American mandate instead of investing in local manufacturers to deliver most of the materials used in the construction of roads, railways and other infrastructure projects under the Department of Transportation.
After the enactment of the bipartisan infrastructure bill, the DoT was among the first Federal agencies to request multiple waivers on the Buy American mandate, including the $5 billion earmarked for building a nationwide network of EV charging stations included in the bill.
Agencies can apply for waivers if the Buy American mandate would increase the overall project costs by 25%, if they are “inconsistent with the public interest,” or if the product is not made in the US in “sufficient and reasonably available quantities.”
EV charges require significant steel and iron, which are used to make the heating and cooling fans, the internal structural frame and the power transformer. Chargers with cabinets that house the entire product require more steel, with the raw material contributing up to 50% of the charger’s overall production cost.
The decline in Chargepoint stock price, and the prices of other EV charging stocks, such as EVgo, indicate that investors are worried the government may impose punitive measures on the DoT if it continues to skit its Buy American mandates, which could affect the future funding of EV charging companies.
*This is not investment advice.
ChargePoint stock price.
The Chargepoint stock price was trading down 0.64% premarket amid concerns about Buy America.
