Governments around the world want more electric cars on the roads – but they wouldn’t be able to go far without the infrastructure in place to charge them. Solactive’s head of analysis, Konrad Seibel, says that even if manufacturers love electric cars Tesla Perhaps stealing the spotlight, investors would do well to look at what is needed behind the scenes to drive the industry’s success.
The growing demand for fast charging equipment infrastructure for both long-distance travel with electric vehicle Daily charging in electric vehicle owners’ homes and workplaces has become one of the biggest investment trends so far in 2022.
Konrad Sippel, head of analysis at indicator provider Solactive, explains that the topic has grown as part of a “massive trend shift toward cars with non-fossil fuel engines.” The number of countries that have committed to stopping the sale of these cars in the name of United kingdom And Germany Until 2030 is impressive,” l said optics. “Everyone knows that electric cars will dominate future sales and that more than half of the cars on the road by 2040 will be electric.”
“Everyone knows that electric cars will dominate future sales and that more than half of the cars on the road by 2040 will be electric– Konrad Seibel
Investors who want to take advantage of this trend initially cheered at the launch HANetfs EV Charging Infrastructure ETF [ELEC] At the end of April, raising the fund to an intraday high of $602.57 on May 5 before closing 11.2% lower from its start on May 9. .
The EV Charging Infrastructure ETF tracks the Solactive Electric Vehicle Charging Infrastructure Index, which consists of companies engaged in electric vehicle charging stations and battery chargers. Solactive is also positive about the growth prospects for the electric vehicle charging infrastructure industry, citing the topic in its latest report, Future Trends 2022.
Cars compete against chargers
The auto stocks that electric vehicle maker Tesla have pushed forward in recent years. Tesla shares are up 398% over the past two years and another 1,120% over the past five years. Meanwhile, rival Nio has seen its stock price rise 264% over the past two years.
But electric cars being taken out of factories won’t go far if there aren’t enough places to charge them. As Solactive’s Future Trends report noted, while incentives and technological advances have already increased the number of battery-powered vehicles on the road, the charging infrastructure remains relatively underdeveloped.
The need to develop public charging stations and private wall boxes is essential to facilitate electric vehicles on the roads. “When you ride in your electric car, you have to be sure that you will find a charging point on the road as you do now with gas stations,” Sibel explained. “At present this is not a given. We need more charging infrastructure.”
The Future Trends report also highlighted a study from the European Union for Transport and the Environment which stated that to keep pace with estimated electric cars, 3 million charging points will be needed in the EU by 2030. This compares to about 225,000 today – and only 25,000 of them are suitable for fast charging.
The United States is in a similar position, with a goal of having 26 million electric cars on the road by 2030, which would require 2.6 million charging outlets. To date, the United States has only 113,000. President Joe Biden, as part of his infrastructure bill, promised to spend about $5 billion building 500,000 charging stations for electric cars. “It’s a big step, but it’s only a quarter of what they need,” Seibel says. There is a huge gap there and in Europe.
Share prices bearing EV fees remain unchanged
It is not just a physical or numerical gap, he adds, but in many ways a psychological one. Investor “understand” However, Tesla’s history has not paid much attention or money to the companies building the basic charging infrastructure that will make this vision a reality.
Therefore, the share prices of these companies have “Not well developed”, Refers to Sippel.
charge point [CHPT]a holding company in the Solactive EV Charging Infrastructure Index and operating a network of electric vehicle charging stations in North America and Europe, its share price is down 74% since the end of 2020. Another component, the Fastned group of fast charging stations. [FAST.AS] Its share price has seen a drop of more than 75% since February of last year, although it is up 236% since March 2020.
“These are very small companies, they don’t have many back-tests available. They are growing but they don’t have the size of the user base yet because electric cars still represent a small percentage of total car sales. You also have the cost of creating the software or hardware product,” Sibel explains. “There’s an opportunity here to get into that before values, like manufacturers, go to the ceiling.”
He chose Fastned as captain in his native Netherlands. It develops and operates a rapid charging infrastructure that charges electric vehicles with a range of up to 300 kilometers in 15 minutes.
“A few meters from every motorway petrol station in the Netherlands is a Fastned charging point”, He says. “We talk to people there and they look at you candidly when you mention problems with the electric car charging infrastructure. Because there is a sense of urgency in the Netherlands, they see charging stations everywhere. But we make it clear that it is not the case elsewhere and that electric cars do not take off unless There was no shipping infrastructure, especially for long distances.”
The future of home car charging
Out of the way, Sippel also selects the American company Wallbox [WBX], which manufactures electric vehicle chargers for use in the home and office. The stock has seen a 17% increase in the past 12 months. “You get Airbnb with Wallboxes where you can charge people to use your charger,” He thought.
Although the main focus of the Electric Vehicle Charging Infrastructure Index is on those who manufacture chargers and those who build station networks, there may be another area of interest. “There could be a side issue with innovation in battery technology, which allows them to charge faster or to get bigger batteries in cars,” he said. Note Sippel.
There are challenges ahead, such as the interoperability of charging hardware and software to make life easier and cheaper for electric car drivers, as well as supply chain problems and a lack of chips that are hampering development. Sippel also raises concerns that the push for fossil fuels could pressure governments to delay car bans beyond 2030.
The companies responsible for charging the fees must demonstrate their ability to expand. There is a risk that some may not, He says. But that’s an area in the future electric car ecosystem whose prices haven’t ballooned yet. It may be worth looking for investors. Just as the adoption of personal car use in the 20th century required a network of gas stations, so the use of electric cars will require a massive expansion of the charging infrastructure. The demand for these companies is there.”
HANetf Electric Vehicle Charging Infrastructure UCITS ETF Acc (ELEC ETF) It is a European exchange-traded fund. This fund is traded on many different exchanges, such as Borsa Italiana, Deutsche Boerse Xetra and the London Stock Exchange. For this reason, different acronyms appear on the same ETF.
This means that it is possible to trade units in this ETF through most Swedish banks and online brokers, for example DejeroAnd nordnet And keep it up.