There's a lot of interest surrounding electric vehicle (EV) stocks right now, thanks to the rapid adoption by consumers of EVs and expanding model lineups from manufacturers. In fact, nearly 60% of all new vehicles sold globally by 2030 will be EVs, according to IEA estimates. 

Rising electric vehicle sales are unsurprisingly creating a lot of demand for EV charging stations in the U.S. and abroad, and that's making investors take a closer look at EV charging companies, including ChargePoint Holdings (CHPT 13.40%)

I'm a little skeptical that the company is a good investment right now, but let's take a closer look to find out what's going on with ChargePoint. 

A person charging their car.

Image source: Getty Images.

What's going right for ChargePoint right now 

ChargePoint sells the hardware and software for charging stations. The company has a lot of businesses as customers, which pay to have the charging stations installed for customers or employees.

Individuals can also pay for a subscription service to use ChargePoint's charging network. And it's the combination of selling hardware and software that makes ChargePoint's business model different from some of its competitors', which usually don't offer both. 

The company has the largest EV charging network in the U.S. and in the fiscal third quarter (ended Oct. 31), ChargePoint had more than 210,000 charging ports across the U.S. and Europe, up 30% from the year-ago quarter. 

Additionally, ChargePoint's revenue soared 93% in the quarter to $125.3 million. And sales have climbed 95% in the first nine months of 2022 to $315.3 million. 

And finally, the Investment and Jobs Act passed last year -- which included $5 billion for EV charging infrastructure -- could help the company continue to expand its fast-charging DC stations in the U.S., though it's still unclear how much impact it will have on ChargePoint's business. 

What's going wrong for ChargePoint

While all of the above is good news for ChargePoint and a reason for some optimism about the company, there are some real concerns that investors should be aware of. 

First, it's worth mentioning that while the EV industry is in the midst of a lot of growth right now EV stocks aren't doing particularly well. Companies in this space are high-risk investments, with ChargePoint's 53% drop over the past 12 months proof of the industry's volatility. 

More importantly, ChargePoint is unprofitable right now -- and things aren't exactly moving in the right direction. 

In the third quarter, ChargePoint's net loss widened to $84.5 million, from a loss of $69.4 million in the year-ago quarter, despite the company nearly doubling its revenue over that time. 

The underlying problem for ChargePoint right now is the fact that its gross margin is a bit erratic. Its gross margin under generally accepted accounting principles (GAAP) improved by 1% in the third quarter to 18% -- but that was down significantly from 25% in the year-ago quarter. 

Management said that the margin declines are due primarily to "supply chain disruptions, which affected both cost and supply availability, and increased new product introduction and transition costs." 

While a lot of young companies are unprofitable -- and some of them end up being good long-term investments -- ChargePoint's falling margin could be a potential red flag for investors.

ChargePoint stock is not a buy 

Could ChargePoint's margins turn around? Sure. But for now, the company's widening losses should give investors pause. The EV industry is still suffering from rising costs, inflation pressures, and supply chain issues and it's still unclear how long these problems will persist. 

With its profit margin issues right now combined with the high risk in the electric vehicle industry, I don't think ChargePoint's stock is a buy.  The company could certainly turn things around in the future, but I think there's too much uncertainty with ChargePoint's stock.