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June 25, 2021, 1:47 p.m. EDT

Riches await whoever can solve this EV conundrum

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By Paul Brandus

Here’s an important metric concerning America’s electric car industry: The ratio of EVs to recharging stations. There obviously have to be enough to make easy to recharge a vehicle. Depending on what state —and what kind of home—you live in, this could be a problem. 

It’s not a big issue in Mississippi, where there are only 4.4 electric vehicles for every charger (everything from commercial charging sites to plug-ins at home). This isn’t because there are tons of charging stations in the Magnolia State (there are 275). It’s because so few people there own EVs. 

But it is a problem in states where EVs are taking off. In New Jersey, for instance, there are 35.5 electric vehicles for every charging station (1,385 total), again counting both public and private sites.  One reason for this: the state introduced tax incentives of up to $5,000 per vehicle in 2020, which has sparked sale of EVs. But the buildout of charging infrastructure hasn’t kept pace.

The data, supplied to MarketWatch by Loren McDonald, chief executive officer of EVAdoption, an electric vehicle consulting and market analysis firm, highlights one of the biggest problems facing the growing U.S. EV industry: Lack of infrastructure. 

General Motors /zigman2/quotes/205226835/composite GM +1.65% plans to completely phase out the combustion engine by 2035; it’s the same year that California plans to ban the sale of all new gasoline-powered vehicles.

But will there be enough charging stations by then? McDonald says many people have the wrong idea here, starting with President Joe Biden’s idea of building 500,000 charging stations across the country. The roughly $1 trillion infrastructure plan agreed to by Biden and a bipartisan group of senators allocates $7.5 billion for EV infrastructure , according to the White House.

McDonald appreciates that the president wants to beef up EV infrastructure, but calls the half-million charging station plan “annoying.” Why? Because it implies that EV owners will recharge their vehicles like owners of gasoline-powered cars do: By going to a recharging station on the corner. 

Here’s where the housing market—and some intriguing new investment opportunities—come into play. 

“If you own an EV and a house, your refueling station is in your garage,” McDonald says. “You plug in every night and recharge.” 

But what if you live in an apartment building or some other kind of multi-family housing? It’s much harder to recharge. Real-estate developers are taking this into account with new apartment complexes, but for older buildings, this barrier to EV growth is a problem waiting to be solved.

Here’s the problem/opportunity in a nutshell: Older apartment complexes probably need modifications to support the kind of fast, power-sucking chargers that many individual home owners and newer buildings have (more on this in a minute). But it can cost “a couple thousand dollars or more” to install additional wiring and infrastructure—per outlet—at an older building, McDonald says. 

And who pays? Let’s say the building’s owners do initially, but then tries to spread the cost out among tenants. There could be tenants who don’t want electric cars and might balk at being asked to pay for something they don’t want.

Companies in the EV/multifamily housing space include  ChargePoint Holdings Inc. /zigman2/quotes/214140886/composite CHPT -0.52% ; the Campbell, Calif.-based company went public in March. There’s also  EverCharge , which points out a good reason for landlords to install recharging facilities: It “adds value and desirability” to their buildings. The Oakland, Calif.-firm remains, for now, privately held. 

Meanwhile, I asked McDonald how investors can make money in the EV sector. He used the California gold rush (1848–1855) as an example. “It’s the old picks and shovels analogy. You can chase the Teslas if you want, but I would look at smaller companies that are building and supplying automakers and charging companies with what they need.” 

One thing charging companies want and need? Faster, more efficient charging for their customers. Current products just aren’t fast enough. Here’s an example: Many homeowners use so-called “Level 1” chargers (L1), standard 120-volt devices that plug into any outlet. The problem? They charge slowly—adding anywhere from three to five miles of range to your EV per hour. Plug in at night and by morning, you’ll be able to go a few dozen miles. Not so hot. 

“Level 2” chargers (L2s) could also be better. L2s are 240-volt devices that can give your EV about 18-28 miles of range per hour. An average EV can be fully charged in 8 hours or less. L2 chargers are typically found in public areas—like corner charging stations that are springing up. But, as New Jersey’s EV-to-charger ratio indicates, there aren’t enough of them. 

There’s plenty of room for improvement in both the L1 and L2 space. You can fill up a gas tank in two or three minutes. Whoever can figure out how to recharge an EV that quickly—a breakthrough that’s probably years away—is going to be Wealthy with a capital W. 

Now read: I’m an EV expert, and I’m skeptical about how quickly electric cars will go mainstream in the U.S.

Barron’s: Ford Is Buying an EV Charging Firm. The Electric Grid Is the Next Big Thing.

/zigman2/quotes/205226835/composite
US : U.S.: NYSE
$ 57.79
+0.94 +1.65%
Volume: 6.88M
Oct. 20, 2021 11:34a
P/E Ratio
6.70
Dividend Yield
0.00%
Market Cap
$82.53 billion
Rev. per Employee
$790,226
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/zigman2/quotes/214140886/composite
US : U.S.: NYSE
$ 21.08
-0.11 -0.52%
Volume: 3.22M
Oct. 20, 2021 11:34a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$6.88 billion
Rev. per Employee
N/A
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