Let’s face it, you don’t have to be a genius to know that the business of manufacturing, supplying and operating electric vehicle (EV) chargers is poised to see incredible growth. The concept of all-electric cars has quickly evolved from the domain of a few specialized companies to almost every major vehicle manufacturer in the world. Now that the big boys have total investments in the billions, they are committed and have a vested interest in making sure the necessary charging infrastructure is built.
So I’ve been thinking about EV charging inventories for a while now. and it occurred to me that if I am to engage in such a thing, I must go against both my nature and my training. Both make me a trader and this is not really a trading opportunity. It is a long-term investment, and it requires different parameters and a different strategy.
As a trader, when I have a baseline scenario about the economy, an industry or whatever, I start to narrow down the different ways that belief is played until I get to one thing, then I look at the charts to find an entry point to that Stock or whatever, then where I could reasonably put a stop loss, and then I’ll buy as much as I’m willing to put up with. With something like EV charging inventory, however, that’s not a wise approach. The industry is still too young to identify a clear winner and the volatility…
Let’s face it, you don’t have to be a genius to know that the business of manufacturing, supplying and operating electric vehicle (EV) chargers is poised to see incredible growth. The concept of all-electric cars has quickly evolved from the domain of a few specialized companies to almost every major vehicle manufacturer in the world. Now that the big boys have total investments in the billions, they are committed and have a vested interest in making sure the necessary charging infrastructure is built.
So I’ve been thinking about EV charging inventories for a while now. and it occurred to me that if I am to engage in such a thing, I must go against both my nature and my training. Both make me a trader and this is not really a trading opportunity. It is a long-term investment, and it requires different parameters and a different strategy.
As a trader, when I have a baseline scenario about the economy, an industry or whatever, I start to narrow down the different ways that belief is played until I get to one thing, then I look at the charts to find an entry point to that Stock or whatever, then where I could reasonably put a stop loss, and then I’ll buy as much as I’m willing to put up with. With something like EV charging inventory, however, that’s not a wise approach. The industry is still too young to identify a clear winner, and the volatility of the stocks that are out there makes setting levels a matter of guesswork, not study.
In this case, I want to diversify my investment and spread it out over time. That means buying multiple stocks and calculating the average cost of each of them. When doing this, I would typically try to include a small long shot that has the potential to offer massive returns. But try as I might, I couldn’t do it here. I looked at Volta (VLTA) and a few others but the same problem kept popping up. This is an infrastructure game, which means it requires capital, and the small businesses in this space just don’t have strong enough balance sheets for me to believe they can thrive.
That’s how I ended up with the big names in the industry. The biggest of them all is Tesla (TSLA), but they only build chargers for their own vehicles, and this is about general adoption, not a specific EV manufacturer. So the best options appear to be ChargePoint (CHPT), Blink (BLNK), and EVGO (EVGO). All three stocks rose sharply late last year when this kind of long-term potential play was all the rage, but have fallen significantly this year. So far, however, the lows they all made earlier in the year have held, suggesting some support.
However, as this week’s CPI data reiterates that inflation is still a concern and therefore unlikely to slow the pace of rate hikes, it could well fall back to challenge those lows again. Therefore an averaging makes sense. That way I don’t have to worry about choosing a floor. I just need to start and buy all three regularly for a few months based on calendar not price. If the price goes down after my first purchase, great, I’ll buy even cheaper, if it goes up, great, I bought below. At least psychologically it’s a win, a win!
Like it or not, EVS is here to stay, at least for a while. Personally, I wouldn’t buy any right now, but that doesn’t mean I can’t make money off those that do, and the best way to do that right now seems to be with a long-term investment in CHPT, BLNK, and EVGO .
