We recently published a list of 11 Best EV Charging Stocks To Invest In. In this article, we are going to take a look at where EVgo (NASDAQ:EVGO) stands against other best EV charging stocks.
Over the last few years, the electric vehicle (EV) market has experienced significant growth, due to consumer demand, automaker investments, and substantial government support. In the US, the $7.5 billion from the 2021 Infrastructure Investment and Jobs Act and tax credits from the Inflation Reduction Act have also fueled EV growth.
According to the International Energy Agency (IEA), global public charging points are expected to exceed 15 million by 2030 and will increase to nearly 25 million by 2035. In the U.S., the government aims to install 500,000 public charging ports by 2030, with the total number of chargers expected to reach 900,000 in 2030 and 1.7 million by 2035.
Globally, home charging is expected to grow to over 270 million units by 2035, with more than 45% of electricity coming from public or private non-home chargers. Charging infrastructure for heavy-duty vehicles (HDVs) is also expected to grow significantly. By 2035, installed HDV charging capacity is projected to reach 2,000 GW. Policies like the EU’s Alternative Fuels Infrastructure Regulation and U.S. strategies are driving this expansion, alongside private investments.
The Road Ahead for EV Charging: Industry Growth and Challenges
According to PwC’s analysis, the number of charge points in the U.S. must grow from around 4 million today to 35 million by 2030 to meet demand. The PwC report has projected that the number of EVs could reach 27 million by 2030 and 92 million by 2040.
The EV supply equipment (EVSE) market is expected to expand from $7 billion to $100 billion by 2040, at a 15% compound annual growth rate. The market’s primary value pools are hardware, software, installation services, and charge point operators (CPOs). CPOs, which build, operate, and maintain charging stations, are expected to dominate and capture 65% of market revenue by 2040. On the other hand, hardware providers’ share will shrink from 46% today to 20% by 2040.
Despite the clear market opportunities, challenges remain, including educating consumers, financing infrastructure, and ensuring cost-effective solutions across different charging segments. Companies looking to enter or expand in the EVSE market will need to understand evolving customer needs, adopt appropriate business models, and prepare for long-term investments with a focus on strategic partnerships and potential acquisitions.
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A businessman plugging in to a public charging station, symbolizing the services provided by the company.
EVgo, Inc. (NASDAQ:EVGO)
Number of Hedge Fund Holders: 11
EVgo, Inc. (NASDAQ:EVGO) is a significant player in the U.S. EV fast-charging market, with over 1,000 fast charging locations across 35 states. It was established in 2010 as part of a settlement involving NRG Energy and the California Public Utilities Commission, and has evolved significantly over the years. It is one of the best EV charging stocks with over 1 million customers across the US.
In its second quarter, EVgo (NASDAQ:EVGO) reported an EPS of -$0.10, which outperformed the estimates by $0.02 and its revenue of $66.6 million was up 31.6% year-over-year. The company also raised the midpoint of its revenue guidance by $10 million at $240 to $270 million.
On August 6, The Fly reported that Stifel analyst Stephen Gengaro adjusted the price target for EVgo’s (NASDAQ:EVGO) stock to $6 from $7 while maintaining a Buy rating. The update came after the company reported solid second-quarter results, driven by higher utilization of its charging stations and increased operational efficiency. The analyst expects these positive trends to continue, which could help the company in reaching its target of becoming EBITDA positive by 2025. Despite the reduced price target, the firm still views the company as its “favorite charging name.”
In the second quarter, 11 hedge funds held EVgo (NASDAQ:EVGO) shares worth $16.53 million. Israel Englander’s Millennium Management is the company’s most prominent shareholder with 1.8 million shares, worth $4.43 million, as of June 30.
Overall EVGO ranks 7th on our list of the best EV charging stocks. While we acknowledge the potential of EVGO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than EVGO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure. None. This article is originally published at Insider Monkey.
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