What happened
Shares of Volta (VLTA) were down 12.4% as of 12:52 p.m. ET on Thursday. The electric charging station provider announced new measures yesterday to cut costs amid deteriorating conditions in the marketplace. Management also withdrew its previous full-year revenue outlook. The sell-off today brings the stock's year-to-date drop to more than 81%.
So what
Volta reported strong revenue growth in the previous quarter. Revenue more than doubled year over year to more than $15 million, but worsening conditions for the industry caused management to lower its third-quarter revenue guidance to between $13.5 million and $14.5 million. This is down from the range of $17 million to $18 million provided in the last earnings report.
The weakening economic conditions come after Volta already reported a $276 million loss over the last four quarters. To save money and shore up the bottom line, the company is reducing its workforce by 10%, which comes on top of an 18% cut since June 1. It's also looking to consolidate marketing and administrative costs, limit the use of outside consultants, and tighten up business processes.
Now what
Volta's announcement echoes similar news from top car manufacturers. Tesla and Honda Motors are reportedly holding production at limited capacity levels. This comes as interest rates continue to climb, which is making the purchase of new vehicles more expensive in the near term.
While Volta has a long-term opportunity to take advantage of the $7.5 billion of government funding toward electric vehicle charging infrastructure, the company's mounting losses on the bottom line are concerning. Investors should use caution when putting money to work in electric vehicle stocks right now.