Consumers (and investors) frustrated by a lack of electric vehicle (EV) chargers are hoping companies like Charge Enterprises (CRGE) can keep up the momentum.
The newly-public EV-charging infrastructure company reported first quarter revenue of $163.0 million, a jump of nearly 47% from a year ago. The company’s net loss did expand in Q1 however to $13.1 million versus $1.6 million last year, most of which was due to compensation costs related to the company’s expansion, as the sector appears to be in mega-growth mode.
“Well, I think it's continuing to go up nicely,” Charge's CEO and chair Andrew Fox said about the company’s growth in an interview with Yahoo Finance. “I think the reality is that given some of the demands in the global supply chain, it probably would take a little longer than a lot of the OEMs (original equipment manufacturers) had anticipated to reach their goals, but we're the enablers and the infrastructure has to come before the auto sales come, so I think what you're seeing from us is the execution of a business plan.”
Not surprisingly, Fox is bullish on the EV infrastructure build out, which is a priority of the Biden administration, whose Bipartisan Infrastructure Law aims to add 500,000 EV chargers by 2030. Auto manufacturers are also on board, looking to assuage the “range anxiety" of prospective EV buyers.
Fox believes his company is in the driver’s seat as this build out is just in the early stages.
“I think over the next 25 to 30 years, though, and it's like being at the dawn of the telecommunications for wireless, we're just at the very first inning now on infrastructure for EVs, and so i'm super excited by the tailwinds in our business and certainly you're seeing it in terms of the acceleration of our infrastructure revenue,” Fox says.
Unlike companies like EVgo (EVGO) or ChargePoint (CHPT), who exclusively build EV charging equipment and networks, Charge works with these providers to build out EV charging locations across both private sector and government locations. A big area for Charge is building out its services at car dealerships, which number around 18,000 across the country.
“The real infrastructure spends are first going to be what you see inside of the auto dealers, because they need to build the facilities in order to sell electric vehicles … Once they upgrade their facilities to be able to sell, then the next category we see are the fleets, the people they're selling to,” Fox said. “So it's in a little bit of a race right now and there are a lot of people focusing on retail, and i'm not saying we're not identifying retail, but really in order to enable the EV industry to jump-start you really need infrastructure inside of the auto dealers, so that's predominantly why we start there.”
While that’s all fine and good for Charge’s business, the big problem for the industry and the federal and local governments looking for more EVs on the road is the infrastructure buildout needed for new chargers is so massive, and there still needs much to be done.
A new McKinsey & Company report from April predicts the U.S. will need 1.2 million new chargers by 2030 to meet demand, more than double what the Biden Administration is targeting.
Fox believes the country can’t rely on government spending alone to get this done, and in fact Charge does not want its growth to be connected to government spending alone. But, Fox says the Biden EV infrastructure plan is a great starting point for the next big phase of the nation’s EV charging buildout, especially for his company.
“My biggest concern is not making our business completely contingent on what happens with the federal government spend, “ he says. “In a best case scenario, we start building the 500,000 EV charging stations that the Biden administration would love to see built, and I think we'll be a huge beneficiary when that happens.”