Charge Enterprises: Seizing the EV Charging Revolution

The adoption of Electric Vehicles (EVs) is experiencing a rapid increase as global consumers’ interest in buying EVs has reached a staggering 52%, as reported by the latest EY Mobility Consumer Index. This rise in interest can be attributed to several factors, including concerns about climate change, a focus on sustainability, the escalating cost of gasoline, and the influential Advanced Clean Cars II rule introduced by California. According to this rule, by 2035, all new cars and light trucks sold in California must be zero-emission vehicles, including plug-in hybrid electric vehicles. The United States has already witnessed significant sales of over 3.7 million plug-in hybrid and battery electric vehicles since 2010, and this number is projected to surge in the future as more consumers opt for EVs when purchasing automobiles.

These growing trends present an exciting opportunity for innovative companies like Charge Enterprises, Inc. (NASDAQ: CRGE), a leader in the EV infrastructure sector, to seize upon. Since our previous coverage of the company, Charge has achieved multiple exciting milestones, further establishing itself as a must-watch in the booming EV charging revolution.

About the Company

Charge Enterprises, Inc. is an electrical, broadband, and EV charging infrastructure company that offers comprehensive project management services to its clients. The company operates in two segments: Infrastructure, which primarily focuses on EV charging, broadband, wireless, and electrical contracting services; and Telecommunications, which provides the connection of voice calls, Short Message Services (SMS), and data to global carriers. With a vision to lead the way in enabling the next phase of transportation and connectivity, Charge Enterprises aims to build, design, and operate seamless infrastructure for electric vehicles, fostering a future where transportation is clean, efficient, and connected. The company strives to empower individuals, communities, and businesses to thrive in a more sustainable world. Its strategic approach involves cultivating repeat customers and generating recurring revenue, starting with the nation’s approximately 18,000 franchised auto dealers, where investments in the EV charging revolution are currently taking place.

The Strategy

Charge’s multi-phased strategy presents an exciting opportunity for readers at SmallCaps Daily. By targeting the nation’s approximately 18,000 franchised auto dealerships, which are at the forefront of the EV charging revolution, the company aims to position itself as a trailblazer within a rapidly booming market. Focusing initially on the largest automotive Original Equipment Manufacturers (OEMs), their dealers, and their fleets, Charge plans to strategically capture a significant portion of these retail dealerships. This is an advantageous approach as it establishes a strong presence in these high-traffic locations. This can lead to Charge cultivating a robust dealer ecosystem, leading to repeat customers and recurring revenue, ensuring stability for the company. Beyond this, the acquisition of strategic infrastructure entities further strengthens the overall strategy. By acquiring entities with established assets, cash flow, skilled teams, and industry knowledge, Charge can enhance its buildout of the EV infrastructure strategy. This strategic move not only accelerates the company’s expansion but also mitigates risks associated with infrastructure development, as it leverages existing resources and expertise.

As the adoption of electric vehicles continues to rise around the globe, the demand for reliable and accessible EV charging infrastructure surges with it. By positioning itself as a leader within this evolving market, Charge is in the optimal position to capture a large customer base, creating value for investors as the company expands its operations and further cementing itself as a key player in the EV infrastructure world.

Recent Milestones

Charge recently reported financial results for Q1 2023 with revenues reaching $193.5 million, showing a growth rate of 19% compared to the first quarter of 2022. The Infrastructure and Telecommunications segments experienced significant growth at rates of 40% and 16%, respectively. Gross profit for the quarter rose to $6.7 million, a 9% increase from the same period in the previous year.

Andrew Fox, the Founder, Chairman, and CEO of Charge Enterprises, highlighted the company’s achievements during the first quarter. He mentioned record backlog orders of approximately $107 million and progress towards the company’s goal of engagement with 1,000 major market dealerships, indicating robust growth opportunities for Charge in the coming year. Fox emphasized the supportive environment for EV charging infrastructure, driven by political, economic, and technological factors that are accelerating EV adoption. Charge is well-positioned to execute its infrastructure plans and support the transition to EVs.

A recent exciting milestone had Charge Enterprises and an industry partner collaborate to deliver turnkey EV charging infrastructure solutions. Charge will handle installation, maintenance, and monitoring for the partner’s customers. Together, the companies aim to provide customized software solutions, including “Charging as a Service” (CaaS), to automotive OEMs, retail, commercial, and fleet EV companies. The collaboration further showcases Charge as a trusted advisor in the highly competitive industry, offering comprehensive EV charging solutions.

Addressable Market

The global EV market is experiencing significant growth, with sales projected to reach $823.75 billion by 2030. This growth is driven by three key factors: increasing consumer adoption of EVs, government investments in the EV market, and manufacturers’ policies focusing on EV production. Consumer demand for environmentally friendly transportation has led to a steady rise in EV sales.

Governments worldwide are providing funding to support EV market development, aiming for 50% of all car sales to be electric by 2030. The Bipartisan Infrastructure Law in the U.S. has allocated significant investments, including $10 billion for clean transportation and over $7 billion for EV battery components and materials. Additionally, $2.5 billion of a total $7.5 billion investment is being deployed to establish a nationwide EV charging network. Leading car manufacturers are also embracing EVs, with General Motors investing $35 billion in EVs and autonomous vehicles by 2025 and planning to install 40,000 charging stations at its dealerships. Ford Motor Company has increased its planned investment to $50 billion for EV production by 2026, with a commitment to have half of its new vehicles electric by 2030.

As the EV market expands, the EV charging infrastructure market is projected to reach $121.09 billion by 2030, growing at a CAGR of 25.5%. Charge Enterprises aims to position itself as a leading infrastructure provider in this growing market

Final Thoughts

Charge Enterprises is a leader in making the journey to electrification simple and we find is well equipped to capture the highest and most profitable spend in the EV Charging value chain. With its focus on in-demand EV charging infrastructure and strategic partnerships, the company is well-positioned to capitalize on the growing demand for reliable and accessible EV charging solutions. The company’s recent financial performance, multi-phased strategy initially targeting franchised auto dealerships, and commitment to customer-centric services make it a must-watch company within the EV revolution for readers at SmallCaps Daily. With a clear vision for growth and a track record of success, we think Charge Enterprises is already a key player in the bustling EV market and is a must-watch to have on your list.

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