The switch from carbon-based to electrically powered transport is one of the decade's most significant economic and social trends. Politicians worldwide were pumping tax dollars into establishing an appropriate network of chargers for EVs to utilise but some of this money has dried up.
Consumers are backing the trend, and traditional manufacturers are playing catch-up in an effort to take market share, but this is no longer the sector most sought after, with the recent trend flipping to AI stocks.
Demand for the sector is by no means dead. The numbers being delivered by Tesla, and EV competitors are proof of that. The premium being paid for the sector has reduced, and the infrastructure play is now more considered than it was in the past. Any sector that wants to mature has to trim some of the fat.
What Does The Future Hold For EV Charging?
The folks over at Statista are expecting to see a doubling in the number of EV charging stations from the period of 2022 through to 2028, bringing the total to 3.32 million public charging stations (up from 1.7million in 2022). Staggering growth figures such as these have resulted in a host of firms taking on the challenge, making the task of picking the best EV charging stock more difficult.
In the past, we have looked at some of the top EV charging names to consider, but with the current market trend being firmly bearish for the sector, the bigger question is when will be the right time to reconsider entry rather than which names to choose right now.
We have flagged up some of the top names in the sector from a market cap perspective, but this is not a list of the best opportunities, merely a gathering of some names you might want to pay attention when, or if the sentiment shifts back in favour. Most of the sector remains more than 90% down from highs after so much earlier excitement, so patience is likely to be key.
Top EV Charging Companies
Below are 8 of the top listed EV charging companies, sorted by market cap. Outside of Tesla, the other companies are very small in global terms.
Investing in Electric Vehicle Charging Stocks Now?
Transforming global journey patterns on the scale that the EVs are predicted to do is a massive undertaking. After years of plans and proposals, the EV sector, plus political and economic forces, has passed the tipping point from where it now looks sure to take place.
Investing in EV charging stocks will tap into enormous flows of cash already confirmed, and more are likely to follow. $7.5bn has already been allocated to developing public EV charging stations in the US. To meet the 2030 target, the US will need to build 11,407 new public EV charging stations each quarter. Factor in the demand from domestic producers around the world, and the potential to make significant profits appears very real.
The shakedown in tech stock valuations offers investors who have been suffering from FOMO a chance to get on board with the new schemes, and as the historical performance of the Nasdaq index proves, such dips are few and far between.
The sector is in a semi stable phase at present, but most of the stocks are down at least 90% from all time highs hit just a few years ago, so investing in EV charging right now takes a strong stomach. Now there are a few sayings out there such as “scared money doesn't make money”, and “buy when fear is high” but there is a time and a place. If you truly believe in the sector, the fundamentals of the company you are considering, and can take a long-term view, then it might be a good time for you. For those with shorter time horizons who have less belief, you may well be better off considering sectors that are showing performance now, but retain some elements of growth potential.
What to Know Before Investing in Electric Vehicle Charging Stocks?
The mileage range of EVs continues to increase as new models come onto the market. The Air Dream vehicle produced by the Lucid Company has recorded an official EPA mileage rating of 520 miles on one charge. Such advances in technology supporting the sector are likely to continue. That means elective vehicle charging stocks are vulnerable to the risk of firms building a framework that works now but could become redundant in the near future.
There is also a compatibility problem, as some EV manufacturers are designing vehicles that can only use certain types of chargers.
Until these bumps in the road are navigated, EV charging stocks can be expected to suffer high levels of price volatility. There is also the question of how long EV charging stocks take to come good. Those who want to buy electric vehicle charging stocks may need to buckle up for a long journey to a destination still to be confirmed. Of course, capital tied up in buy-and-hold positions could generate superior returns if invested elsewhere.
