If you're looking for info on how to invest in EV charging stations, you're in luck because there is still time to invest in the early stages of EV technology. Read on to learn more about electric vehicles, the many types of companies that make up the industry and how you can invest in the future of power for U.S. vehicles.
Why Invest in EV Charging Stations?
The White House has made electric vehicles a top priority for 2023. Eventually, the goal is for at least 50% of all vehicle sales in the U.S. to be electric by 2030. To help achieve this goal, lawmakers have committed significant resources to build an infrastructure system to charge the thousands of vehicles for sale in the coming years.
How significant are these resources? Lawmakers have already devoted $7.5 billion toward EV charging alone, which they hope will further develop the industry. Ideally, the Biden-Harris administration aims to create an infrastructure that includes more than 500,000 EV charging stations using these funds. This $7.5 million figure doesn't include the $10 billion toward clean transportation and $7 billion toward EV battery components.
This injection of capital and the tax benefits that accompany purchasing an electric vehicle makes it easy to see how the number of EVs on American roads could soon multiply. Powering these cars will be a massive undertaking, and the opportunity to invest in EV charging stations could benefit people looking to take advantage of this new market.
Overview of EV Charging Stations in the U.S.
The U.S. Department of Energy offers a useful tool for finding electric charging stations nationwide. Per the current count, there are nearly 52,000 locations where you can charge an EV in the U.S. as of March 2023.
Even now, as the EV market is on the rise, you can find companies who exclusively create electric cars or are moving to make their whole fleet electric in the list of best automotive stocks on MarketBeat. As these cars become more common, it's natural to expect EV charging stocks to become more mainstream. Capitalizing on this growing demand and government funding can put investors in a great position to profit from the clean energy wave.
Market Forecast of EV Charging Stations in the U.S.
If you're considering investing in electric charging stations, you can take some comfort in knowing these stations will be in demand for the next several years in the US. The White House's ambitious goal of 500,000 stations across the country by 2030 assures that a myriad of charging station stocks will form to meet this massive demand.
Keeping an eye on related industries will allow investors to stay on top of potential fluctuations in these electric charging station stocks and make informed trading decisions. A general overview of stock sectors will show how other industries are performing and more in-depth lists. For example, following the top-performing auto/truck and tire stocks can help investors hone in on which EV charging station stocks to add to their watchlists.
Ways to Invest in EV Charging Stations
You may see the massive need for EV infrastructure as an opportunity but wonder how to invest in electric charging stations. In that case, there are several options with their upside and risk.
Since this is a disruptive technology change, it's important to look at every angle when considering investing in electric car charging stations. Some great options are out there now, but innovation will be necessary to meet the country's EV charging demand. Some of the best options are not out there yet or are in their infancy.
We'll look at some established ways to invest and some opportunities that might also be on the horizon.
Traditional Charging Networks
The most direct way to invest in EV charging is to purchase or be part of a group that buys the physical end product and profits on the sale of electricity.
If you own vacant land or land that houses commercial real estate (retail, multifamily, office, etc.), installing electric charging stations can create an instant revenue stream. This can be especially true if you own land in a high-traffic area. Installing these devices on commercial property may qualify you for significant tax advantages and set your space apart from your competitors.
Whether you install and maintain the stations on your own or partner with a third party who uses the space, installing charging stations readies your property for the future wave of vehicles to come. However, this investment also represents a massive upfront expense, which all property owners may be unable to afford. Investing in EV stocks that operate charging infrastructure can provide a more affordable way to invest directly in power stations.
Companies that Sell Charging Equipment
If you don't own property to install EV chargers, there are EV charging station stocks that you can invest in. This method of investing still allows you to be on the leading edge of the EV movement without spending thousands of dollars upfront.
EV charging equipment manufacturers like ChargePoint Holdings Inc. NYSE: CHPT and EVGo Inc. NYSE: EVGO make, distribute and install charging stations used by retail customers. There are several options for buying EV charging company stock, including manufacturers of equipment only and actual EV manufacturers.
Unless you own an EV or are very interested in the sector, you might not know that major EV companies like Lucid Group Inc. NASDAQ: LCID and Tesla Inc. NASDAQ: TSLA are large providers of charging stations as well. If you want to invest in EVs and EV charging, this list of the best EV stocks might be helpful for your research.
Emerging Technologies
As charging capabilities, battery range and the auto industry all evolve, new technology will offer opportunities to make the charging process more efficient. Battery efficiency can greatly impact EV charging stocks, so it's a good idea to keep an eye on this list of the best lithium stocks to buy when researching.
There are companies today that are working to improve energy consumption for EV charging stations, the time it takes to charge a lithium vehicle battery and a long list of other hurdles to turn to a majority-electric vehicle society. Some examples of EV companies investing heavily in emergent technologies include Tesla Inc. NASDAQ: TSLA and Rivian Automotive NASDAQ: RIVN.
How to Invest in EV Charging Stations
Interested in buying into EV charging stations or EV charging companies’ stock? These basic steps will help you get started.
Step 1: Open a brokerage account.
A brokerage account is an online account you can use to buy and sell shares of stock through a broker. Open a brokerage account with a major broker like E*TRADE or Charles Schwab and add funds to your account.
Step 2: Place a buy order.
After you fund your account, search for the ticker of the stock you want to buy. Place a buy order using your broker's platform. Most beginner investors use limit orders to place an upper limit on the price they pay for each share when placing their first orders.
Step 3: Monitor your investment.
Using your broker's account, monitor your investments and how they change over time. If you're taking a long-term investing timeline, checking your portfolio once a week or less may help you avoid panic selling.
Pros and Cons of Investing in EV Charging Stations
Like any investment opportunity, risks and rewards occur in pursuing investments in EV charging. It's always important to research any potential investment to ensure you are comfortable with the company's direction or the installation cost if you install actual hardware rather than investing in a stock.
Pros
With ambitious goals for EV ownership in the U.S. and worldwide, the EV charging market seems primed for success.
- Support from regulators: The EV industry has seen huge government and private companies investments. This may lead to increased demand for both vehicles and charging equipment.
- Potential for high returns: Many exciting companies in the EV sector invest heavily in growth, research and development opportunities. This allows investors to enter a growing industry early.
- Multiple ways to invest in EV charging: The EV industry is evolving, and investors have direct and indirect options to see returns from consumer interest in clean motor vehicles.
Cons
While it seems like EV charging is the wave of the future, there is no such thing as guaranteed success in investing or technology. As new innovation happens, there are opportunities for success but risks because it's an uncharted path.
- Limited current infrastructure: The current power grid and EV charging infrastructure is insufficient to meet growing consumer demand. Power grid and other infrastructure issues could slow EV growth, leading to a slower return on investment.
- Shifting battery usage: The EV industry has been plagued by supply chain issues, which may impact how batteries are produced in the future. Investors creating a direct EV charging station investment risk that battery technology will become outdated quickly, which could affect the usage of stations.
Future of EV Charging
Today, auto manufacturers and the government are going full speed ahead on EVs, incentivizing their ownership and putting massive amounts of money into their development. With so many new cars on the road, EV charging has the potential to become an enormous part of the American economy, both in homes and via charging stations across the country.
The industry is undergoing constant innovation, and improvements to the range and life-expectancy of car batteries will likely improve. Breakthroughs in infrastructure are necessary for the goal of EVs to become a reality, as improvements to the power grid and accessibility will occur to serve the number of cars projected by the federal government.
Summing Up EV Charging
Significant change is coming to the automotive industry, and the impact of the switch to EVs in the next five to ten years has the potential to change the auto industry substantially. With billions of dollars flowing to EV production and the creation of EV charging stations across the nation, there is an obvious opportunity for capital gain through investment in electric vehicle charging stations.
Whether through investment into actual EV station equipment or in stocks that produce or support EV charging, these new industries present attractive options for people looking to get in on the leading edge of innovation. However, it's important to diversify your investments to avoid concentrated losses by a single sector or company. Consider investing in multiple sectors of the EV industry through individual stock purchases or an ETF.
FAQs
Look at a few lingering questions you still might have about EV charging investments.
Is an EV charging station a good investment?
Many EV charging stations advertise a consistent revenue stream for people who install them on their property. In addition, if you own a commercial space such as a shopping mall, apartment community, etc., installing charging stations gives you an advantage over comparable businesses. However, each station may cost upwards of $2,600 to install.
Are EV charging stations profitable?
The amount of revenue investors will see will depend on which EV charging company you partner with and the traffic your property receives. Aside from the profit you receive from the station, you will likely see an increase in traffic to your location, especially if there are no charging stations nearby.
What is the best EV charging station stock to buy?
On the surface, it might seem like you have limited options for EV charging stocks, but there are several to choose from. The best one for your portfolio will depend on your investment goals and which companies you believe are at the forefront of innovation in the EV charging space. Popular options include ChargePoint Holdings and Tesla.
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