- ChargePoint(CHPT) rose on hopes for a climate and energy deal.
- ChargePoint leads in the market for 240 volt chargers at homes and in apartment buildings.
- CHPT stock needs a stronger play in the market for chargers that charge a car in 30 minutes.
ChargePoint(NYSE:CHPT) rose 10% in pre-market trading July 28. The maker of electric vehicle (EV) chargers was helped by aSenate compromiseon climate and energy legislation. At about $14.80 per share, CHPT stock has a market cap of $5 billion on 2021 sales of $241 million.
As the Senate deal was being done, ChargePoint signed an agreement that will see it install hundreds of charging stations at apartment complexes and condominiumsacross California. The deal brings $4.25 million to install 240 volt chargers designed forfleetsor asstand-alonecharging stations.
How ChargePoint Stands Against the Competition
Electric car sales are held back by a shortage of fast chargers. Charging equipment companies need a growing car market. Most ChargePoint chargers run at 240 volts and can take all night to recharge a car. They’re designed for use at homes and apartment buildings, like the ones being installed in California.
Tesla(NASDAQ:TSLA) offers faster charging with its 480 volt DC powerSuperchargers. It also has its own standard for plugs. In 15 minutes, these can get most cars charged enough to go 200 miles.
ChargePoint’s competition with Superchargers is called DC Fast, which supportsthree different plugs. The top model delivers 350 kilowatts of power andlooks likea gasoline station fuel pump.
These “public chargers” are expected to help create a$142 billion market by 2030. While ChargePoint has a big share of the current market, it hasfewer 480 volt chargersthan Tesla. I call this ChargePoint’s“filling station”problem.
What Happens to CHPT Stock Now
JPMorgan Chase has an overweight rating on ChargePoint witha price targetof $18. To justify that price, ChargePoint says it will sign deals to charge entire fleets, especially in Europe. My own view is CHPT stock needsa stronger playin the 480 volt market to be worth your investment. Buyers of fast chargers also need to give something for drivers to do with those idle half hours.
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