ChargePoint Holdings Stock has a ‘filling station’ issue

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For Charging points (NYSE:CHPT), and indeed for all companies involved in electric car charging, a key question remains unanswered. What will an electric “gas” station look like? Will you still be able to “trust your car to the man who wears the star?

Source: JL IMAGES / Shutterstock.com

We know how gasoline engines fill up. This will take only few minutes. You can find stations everywhere. The imagination of resort owners like Wawa and Buc-ee’s is determined to extend that time, stop after a full tank, and enter the store.

Electric cars take half an hour to fully charge, even with something like ChargePoint’s 480-volt “DC Fast”. With a 240 volt charger, the type of power your dryer can use, it still takes overnight. Everything you do with household power is recharge.

So, “Range anxiety”, the fear that your electric may not go on the open road. This is perhaps the biggest obstacle to a mass market for electricity.

The optimal answer for the electric car market is a station like Buc-ee, or a high-end truck stop like Pilot Steering Wheel J, a chain owned in part by Berkshire Hathaway (NYSE:BRK.A). You need a place where you will spend half an hour. Such a store should also alert drivers when their cars are ready, so that the outlets can be used optimally.

Fill ‘Er Up

Same You’re here (NASDAQ:TSLA) did not quite understand. Most Tesla outlets are “destination chargers,” those 240-volt units suitable for recharging, often placed near hotels. “Compressor” stations are usually placed in shopping malls. It is still suboptimal.

I insisted on this in my writing on ChargePoint. Until an electric charger becomes like a gas pump, you are not going to be adopted en masse.

ChargePoint increases “Billing as a service” in hotel chains. It promotes its network around automotive brands such as Mercedes-Benz.

But ChargePoint does not manage electric charging stations. It sells hardware and offers software from a cloud-based platform. Its acquisition, on July 20, of must be, a European charging software company, demonstrates this. Most ChargePoint sales go to commercial fleets and new car owners. A fleet owner can recharge overnight or between shifts. An owner too. But they don’t go far from their charger. They are attached.

Analysts always beat the table

ChargePoint only generated $ 40 million in revenue during the quarter ending in April. Cash flow from operations for the period was a negative $ 2.1 billion. No wonder that since the start of 2021 the stock is down 35%. Yet it still has a market cap of $ 8.35 billion.

Analysts continue to beat the table for ChargePoint stocks. It is too early to write off, they say. Income is expected to grow by almost 50% per year for the foreseeable future. Are you sure the ground floor. The five analysts who follow CHPT, followed by TipRanks, still see it as a buy. Their course objective is 55% above where it traded on July 20.

Like our Josh Enomoto Remarks, the argument in favor of recharging continues to be based on the plans of automakers to go electric. The problem of chicken and egg anxiety could prevent all of this from happening.

The bottom line

Standard Oil made gasoline the dominant fuel for cars in the early 1900s by subsidizing it. Gasoline was practically worthless in 1911. Oil companies made their money on other fractions, like kerosene and paraffin. By creating networks of ” gas stations “ the oil companies have taken the anxiety out of the lineup.

This is what the electric car industry needs now. It needs a gas station business model that works with today’s hardware. The charging company that sets one up will create a huge business for itself and for other charging companies. Selling such a model to an existing gas station chain, like the one in Buc-ee, would also do the trick.

Our Louis Navellier still loves ChargePoint because it is the largest company in its field. But until he can find his way to the tip of the spear and resolve the business problem created by scope anxiety, it remains speculation.

At the time of publication, Dana Blankenhorn had (directly or indirectly) no position in any of the titles mentioned in this article. The opinions expressed in this article are those of the author, submitted to InvestorPlace.com Publication guidelines.

Dana blankenhorn has been a financial and technology journalist since 1978. He is the author of The Big Bang of Technology: Yesterday, Today and Tomorrow with Moore’s Law, available from the Amazon Kindle store. Write to him at [email protected] or tweet it on @danablankenhorn. He writes a Substack newsletter, Facing the future, which covers technology, markets and politics.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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