ChargePoint Goes Public – How Long Until ROI?
By Edward A. Sanchez – March 1, 2021
Today marks the day when Switchback Energy (SBE), the SPAC for ChargePoint, officially changes over to an actual public listing. ChargePoint, under the symbol of CHPT, begins trading on the New York Stock Exchange. In the spirit of full disclosure, I own shares of SBE which will soon be converting to CHPT. Will my investment bring me unfathomable riches, or anguish and remorse? Time will tell.
ChargePoint EV chargers are not hard to find. And now ChargePoint can even be found on the New York Stock Exchange. (Image courtesy Phil Royle)
In the early days of EVs, it was all about fringe activists trying to make a social/political statement. Aside from the GM EV1, arguably the first “modern” EV, early EV conversions and niche models were often unusually styled, underpowered, expensive, short-range, and impractical. You had to be really dedicated to the “cause” to drive one, with all of the sacrifices it entailed.
Even in the case of the EV1, it was only sold in limited quantities in California and a handful of other markets, had a proprietary inductive paddle charging system, and although it had a relatively peppy 0-60 time of around 8 seconds flat, the initial models with lead-acid batteries only had an effective range of 60 miles. Later models with NiMH batteries had a reasonably long range of 105 miles but lacked a comprehensive charging infrastructure. As soon as the California Air Resources Board relented on their EV mandate, GM promptly reclaimed and crushed the remaining EV1s. An entire film, Who Killed the Electric Car? was made about the injustice of GM taking such a heavy-handed approach in dealing with its pioneering EV model.
Aside from the high cost and short range of early modern EVs, the other major obstacle for widespread public adoption was the charging network. Simply put, compatible chargers for the EV1 and other early EV efforts such as the Ford Ranger Electric were few and far between. You either had one installed at home or at a designated location. If you think public EV charging stations today are inconvenient and hard to find, in the 1990s and early 2000s, multiply that by a factor of 1,000.
GM’s EV1 was a wonderful attempt at an EV in the mid-to-late-1990s, but with almost no charging infrastructure to speak of, driving one was only for the committed. (Image courtesy GM)
We find ourselves today with dozens of EV models on the market, with dozens more coming in the years ahead. In certain markets, brands such as Tesla have gone mainstream, with both the cars and charging stations relatively common sights. We’re starting to see other networks like Electrify America, EVgo and ChargePoint pop up in retail and commercial locations.
I cannot overemphasize the importance of companies like ChargePoint and others in breaking the Catch-22 of EV adoption. If you’re methodical and borderline OCD, owning an EV currently is not a huge inconvenience. Then again, I have my own OCD collection of EV plug adapters. But I know I’m not like most people. To get the public to have greater confidence in the EV ownership experience, EV charging stations will need to be as commonplace as gas stations, and at almost every supermarket, shopping center, coffee shop, office building, and parking garage. I know there are some EV advocates that dispute this and claim that a more measured approach to installation of charging stations will suffice for adoption to reach critical mass.
But if there’s one thing I’ve learned about human nature, it’s that people hate being told what to do – myself included. If EVs are seen as a burden, and you have to buy all these weird adapters and pre-plan every trip down to the last mile, you’re going to see EV adoption flatline. If, on the other hand, charging stations pop up at the local Shell, Starbucks, Walmart, Target, urban power poles, and parking meters, yes, and even race tracks, soon people’s mentality will shift from “Where am I going to charge it?” to “No problem, there are chargers everywhere.”
ChargePoint’s network has been built out to include more than 100,000 stations in the United States. (Image courtesy ChargePoint and Google)
The challenge for the charging networks will be utilization. In the early days, it’s entirely possible that new installations of charging stations could go hours, days, weeks, or months with only limited use. From a short-sighted, quarter-to-quarter perspective, they’re not a great investment right now. However, when the shift to electrification finally takes place, which I believe is an eventual inevitability, there will be lines to use the chargers. In some places, this is already happening. I experienced it myself driving from the Bay Area back to Southern California after the Thanksgiving holiday, where the Tesla Supercharger at Kettleman City had parking lot attendants to guide vehicles in and out of the lot and charging stations.
Back to the point, while there may be a short-term spike in interest and investment in CHPT and other EV charging stocks, the short-term will likely be a volatile roller-coaster ride. The time horizon for electrification is years, if not decades. If you’re in it for the long haul, get in now, but be prepared for some dramatic ups and downs.
(Main image courtesy Phil Royle)
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