The electric vehicle (EV) industry is still in its early stages in the U.S., and its near-term outlook isn't exactly rosy. While automakers still say they're committed to EVs, many have scaled back production goals or paused some investments.
Meanwhile, consumers have turned their attention to hybrids, which are often cheaper than their all-electric counterparts. And the U.S. government is backing away from previous commitments to invest in EV charging infrastructure.
Around this time last year, shares of ChargePoint Holdings (CHPT +0.92%), which sells EV chargers, reached a 52-week high of $2.44. But its share price has cratered since then, and investors are trying to determine if now is a good time to buy this EV stock. Here are two reasons it's probably a bad idea.
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The electric vehicle market is looking a little rough
Sales of EVs are climbing in the U.S. and were up 11% in the first quarter, reaching 300,000. That's a good sign for the industry, but some American consumers appear to be losing their appetite for EVs.
A recent survey found that about 50% are interested in buying an EV, down from 59% this time last year. This sentiment comes at the same time that data shows hybrid vehicles are becoming more in demand than before. Americans often cite a lack of charging infrastructure and the vehicles' high costs as the two main hurdles to buying one.
ChargePoint's expansion helps alleviate the first concern, but it can't do much about the steep cost of EVs. The average transaction price is over $57,700, about $9,000 more than the average transaction price for all vehicles.
That's an expensive premium that many Americans simply aren't willing to pay. Not only do they have the added upfront cost, but they are also often more expensive to insure as well.
EVs could continue to take a while before they reach mass adoption, which isn't good news for ChargePoint.
Its financial performance is pretty bad
Small companies building out their niche in a new market like EVs often experience rapid sales growth because they're able to scale up their businesses quickly. Unfortunately, that hasn't been the case for ChargePoint.
NYSE: CHPT
Key Data Points
In the first quarter of fiscal 2026 (which ended April 30), revenue fell by 9% to just under $98 million. That was more than just a fluke, unfortunately. Sales tumbled 18% in 2025 to $417 million.
That pattern of falling revenue is a red flag for potential investors. Plus, ChargePoint currently has $327 million in debt, compared to its $196 million in cash.
Unsurprisingly, the company isn't profitable right now. It had a loss of $0.12 per share in the first quarter, an improvement from its loss of $0.17 in the year-ago quarter. It's not a deal-breaker that ChargePoint isn't profitable -- most small start-ups aren't -- but against the backdrop of falling sales and its substantial debt, the financial picture doesn't look great.
Verdict: Don't buy ChargePoint stock
I understand the draw some investors might have to ChargePoint and other EV investments. If electric vehicles are the future of automotive transportation, and I believe they are, then why not invest in a company that's helping to build the charging infrastructure needed for the millions of EVs to come?
The problem is that management isn't successfully tapping into this potential. If sales drastically turn around and start growing rapidly, then maybe the stock would be worth considering. But as it stands, ChargePoint doesn't have anything that should entice investors toward its stock.
