The electric vehicle market is booming around the world, and as a result there's a growing need for electric vehicle chargers. It makes sense then that charging stocks would be highly valued given their large addressable market, right? 

It's easy to see upside in charging, but the reality is that EV charging stocks are one investment I would avoid. Here's why these businesses are facing enormous headwinds long-term. 

Financials are terrible

The business of making EV chargers and selling electricity to drivers is a money loser, and looks like it will be one for years to come. You can see below that Blink Charging (BLNK -2.97%), ChargePoint Holdings (CHPT -1.45%), and EVgo (EVGO -1.70%) are all losing about as much as they're making in revenue right now. 

BLNK Revenue (TTM) Chart

BLNK Revenue (TTM) data by YCharts

These companies are investing in growth, but they're doing so at an unsustainable rate. And it's not clear there will be a profitable market for them when they reach maturity. 

There's no moat in EV charging

Ask yourself why you would choose one charger over another. The plugs are the same, the electricity is the same, there's literally no difference between one charger and the next. 

This makes the charging business a commodity, whether you're selling physical chargers or electricity to customers directly. We've seen that with General Motors' (GM -0.17%) partnership with seven charging networks to service GM vehicles. GM will create the app for vehicles to find chargers and collect payment, and users will essentially be offered white-label charging from companies like Blink, ChargePoint, and EVgo. 

If electricity wasn't readily available and chargers didn't use common plugs, there may be more potential for a moat to form. But the industry is moving toward commodification of almost everything about charging. 

The business model is unclear at best

What's the right business model for EV charging companies? Do they just sell chargers and let manufacturers, retailers, and even gas stations put their own logos on chargers? Do they build out networks in the hopes of attracting customers to charge with them? 

I actually think chargers will become such a commodity that they'll be a feature to draw customers to restaurants, retailers, and malls. Why stop at one fast food spot over another on a road trip? What if one has chargers? The same benefit can be given to shoppers at big-box retailers or malls. 

No matter the business model that succeeds, it's hard to see how charging companies will be able to justify their current valuations. 

A market to stay away from

EV charging stocks continue to have high valuations, but their financials are terrible, they don't have a moat, and it's not even clear what a successful business model will be long-term. That's a bad place to be investing, and is why I will stay away from EV charging stocks.