What happened
Shares of electric vehicle charging company Blink Charging (BLNK 4.76%) fell by as much as 13.5% on Tuesday as traders bid down the entire EV space. Shares were down by 12.4% as of 1:30 p.m. EST.
So what
It's worth taking a step back and looking at where Blink Charging stock has traded over the last few days. Shares jumped sharply on Monday after Congress passed President Biden's $1.2 trillion infrastructure bill, which included $7.5 billion to help build a network of 500,000 electric vehicle chargers across the U.S.
That federal support is great news, but it's not clear that Blink Charging will be a big beneficiary. The company makes chargers, which are effectively a commodity, and it doesn't have an impenetrable network in any sense. Much of the funding for chargers, especially along highways, may just flow into existing gas station real estate that's conveniently located.
Image source: Getty Images.
Now what
For more than a year, investors have been enamored with Blink Charging as a way to play the growing market for EV charging infrastructure, but it's not clear the company can actually make money long term. In the second quarter, it only generated $586,173 in revenue from charging services at stations it owns (out of $4.4 million in revenue overall) and reported a $12.3 million loss from operations.
Increasing the nationwide accessibility of chargers will be a big help to the EV industry, but those chargers are largely interchangeable commodities. So, the upside for Blink may not be as big as investors were thinking initially, which is likely why the stock is giving back a big piece of Monday's pop on Tuesday.
