What happened
There has been a lot of news surrounding the topic of electric-vehicle (EV) charging infrastructure this week, but that hasn't helped the stock of ChargePoint Holdings (CHPT 3.94%). In fact, the recent news has investors concerned with negative effects on the charging network company. As of Friday morning, ChargePoint shares have declined by 16% since last week's market close, according to data provided by S&P Global Market Intelligence.
So what
The evolution of EV charging has effectively occurred on parallel paths as the adoption of EVs has grown. Sector leader Tesla has built out its own network of fast-charging Superchargers using its North American Charging Standard (NACS) connectors. Non-Tesla EVs in the U.S. used the Combined Charging System (CCS) as the standard. Other charging systems also exist, including one used by Japan.
Now, several EV makers in the U.S. are adopting Tesla's format. Ford, General Motors, and most recently Rivian Automotive have agreed to add Tesla's NACS adaptor and make the NACS charge ports standard on future vehicles. That has investors running from charging companies like ChargePoint that hadn't included NACS ports at its charging stations.
Image source: ChargePoint Holdings.
Now what
But an assumption that ChargePoint and other charging infrastructure companies will become irrelevant is premature. The company announced that it will soon include the NACS connector option. It added that its charging stations had already been available for multiple connectors and that it had already been working on adding NACS before the recent news of other automakers gaining access to Tesla's network.
Fast charging will also only be used for a portion of EV powering needs. Chargers at commercial buildings, retail shopping areas, residential parking, and truck and bus fleet lots will not need fast chargers.
ChargePoint has been growing revenue quickly, but it still hasn't generated profits. It remains a very risky investment, but the recent decline simply from the Supercharger network news seems disconnected. A bet on ChargePoint is still a bet on mass adoption of EVs, which still looks likely at some level.
