What happened
November was a stellar month for electric vehicle (EV) charging stocks, which rallied by double digits across the board. So while EVgo (EVGO +1.44%) ended the month up 34.4%, shares of Blink Charging (BLNK 2.98%) and Volta (VLTA +0.00%) surged 20.8% and 22.7%, respectively, according to data provided by S&P Global Market Intelligence. Fact is, these stocks were reaching for the skies earlier in the month and could have even ended it by doubling investors' money in just November had they maintained momentum. Here's what happened.
So what
It all started with delivery numbers from some of the leading EV manufacturers. The very first day of November, EV charging stocks shot up by double digits as the pace of adoption of electric vehicles continued to gather steam, especially in the world's largest EV market, China. So while XPeng and Li Auto reported stunning 233% and 107% growth in deliveries for the month of October, respectively, the more popular Nio booked record orders in the month.
A week later, the Biden administration gave investors in renewable energy the perfect reason to snap up stocks as fast as they could -- the House of Representatives finally approved President Joe Biden's $1.2 trillion infrastructure bill after months of negotiations, paving the way for Biden to kick off spending worth $7.5 billion on building a network of 500,000 EV chargers across the U.S.
Image source: Getty Images.
Shares of EVgo, Blink Charging, and Volta leaped for the skies, with Blink Charging also vocally welcoming the development and calling the infrastructure legislation the start of growth for the industry.
Quarterly earnings from all three companies in the following days added fuel to the fire, with EVgo stock almost becoming unstoppable after it reported a surprise net income of $6.1 million for the third quarter. To be sure, EVgo's profits were the result of one-time adjustments, but investors paid little heed and pumped the stock, based on EVgo's 73% year-over-year growth in Q3 revenue, outlook upgrade for the full year, and partnership extensions with General Motors and Uber Technologies.
Likewise, the market didn't fail to notice the 87% growth in Volta's Q3 revenue and its strong outlook for the fourth quarter. Volta had installed 2,137 charging stalls as of Sept. 30, and it expected to end the year with 2,300 to 2,500 installed stalls and 1,300 under construction.
Blink Charging, though, beat all with astounding 607% year-over-year growth in third-quarter revenue to $6.4 million, driven by higher charger sales. In just one quarter, the company contracted or sold 3,106 chargers, beating management's own expectations.
In between, Amazon-backed Rivian Automotive's stellar debut on the U.S. stock exchange sent investors in EV stocks into a tizzy. The mania, though, had to stop somewhere given the sky-high valuations some stocks were already commanding. By the third week of November, a flurry of analyst downgrades brought the seemingly unstoppable rally in EV charging stocks to a grinding halt, with most analysts citing valuation as their reason behind the stock downgrades.
Now what
EV charging stocks have had a pretty quiet December so far, partly because of the broader market sell-off. Yet, the fact that EV charging stocks are still holding up pretty well despite panic selling in growth stocks reflects the high expectations running through investors in EVs. Individual companies, meanwhile, are doing what they should -- expanding their footprint to make the most of the boom in the EV space.
Blink Charging, for example, recently opened its first office in India, while Volta just announced plans to expand into Europe, targeting four countries to start. EVgo, meanwhile, just announced that downloads on its PlugShare app that helps drivers locate and select public chargers has crossed 1 million since the start of 2021. In short, there's a lot to like here, and if you can pick your stocks carefully, EV stocks could make you a fortune.
