What happened
Call it the charge-pocalypse: On Friday morning, shares of three of the biggest publicly traded companies engaged in the business of operating electric car charging networks tumbled in unison. As of 1 p.m. ET, Blink Charging (BLNK +0.40%) stock is down 10.2%, rival ChargePoint Holdings (CHPT 1.15%) is losing 13.5%, and EVgo (EVGO +4.13%) is leading the pack lower with a 13.7% loss.
You can blame Tesla for all of this.
Oh, and Ford, General Motors, and ... potentially Stellantis as well.
NYSE: CHPT
Key Data Points
So what
Ford and Tesla got the ball rolling (downhill for Blink, EVgo, and ChargePoint) late last month, when Ford announced it is tying up with Tesla to make the charging cords on Ford electric vehicles compatible with Tesla's North American Charging Standard (NACS) cables -- and that Tesla will open its Supercharger network of charging stations to owners of Ford EVs.
Last night, GM followed suit, announcing it will make its own EVs compatible with NACS beginning in 2025, and that Tesla's 12,000 Superchargers will be open to GM EV owners in early 2024 (using adapters).
So what does this mean for investors in other companies offering charging services -- specifically, Blink, EVgo and ChargePoint? In a note covered on The Fly this morning, Bank of America analyst Alex Vrabel argues that ChargePoint, at least, should be largely unaffected by Ford and GM joining forces with Tesla. ChargePoint's own DC Fast charging business, says the analyst, focuses on fleet vehicles rather than widely dispersed charging stations servicing individuals.
Morgan Stanley's Adam Jonas isn't as sanguine, however, calling Ford and GM's move "profoundly significant," and implying that it portends Ford and GM outsourcing charging infrastructure to Tesla -- and even preferring Tesla's chargers over those of rival charging firms'.
For what it's worth, RBC's Tom Narayan agrees that Tesla's chargers seem to be the wave of the future and predicts that before too long, Stellantis will announce that it, too, is allying with Tesla on EV charging.
Now what
At the very least, if Ford and GM (and maybe Stellantis) tie up firmly with Tesla, this diminishes the chances that other, pure-play charging companies will succeed in securing similar alliances -- or at least in securing exclusive alliances with the Big Three automakers. That's a big mark against these still-money-losing companies' growth prospects and could postpone the date when they're expected to turn profitable.
When you consider that, according to data from S&P Global Market Intelligence, most analysts weren't expecting to see EVgo or ChargePoint turn a profit before 2027, or Blink to turn profitable before 2028 -- and that these estimates came out before the Big Three started tying up with Tesla -- well, now that they've chosen their favorite partner, investors have to buckle up for the prospect that profits will take even longer to emerge.
Seems to me that's a pretty good reason for investors to be selling these charging stocks today.
