Ford, BMW, and Volkswagen Made Big Bets in EV-Charging Infrastructure
Electric-vehicle-charging company Ionity announced a $780 million investment by a consortium of auto makers. Munich-based Ionity is privately held, but investors should pay attention.
Mark Ralston/AFP via Getty Images
Electric-vehicle-charging company Ionity announced an investment by a consortium that includes many auto makers. Ionity is a privately held firm based in Munich, but investors should have good reason to pay attention to Wednesday’s announcement.
Ionity is getting about 700 million euros, or $780 million, from
BlackRock
(ticker: BLK) as well as its existing shareholders—including
Ford Motor
(F),
BMW
(BMW.Germany),
Volkswagen
(VOW3.Germany), and others—to expand its rapid-EV-charging network across Europe.
“The entry of BlackRock as a shareholder and the commitment of our current shareholders underline Ionity’s attractiveness for investors and confirm the strength of our strategy,” said Ionity CEO Michael Hajesch in the company’s news release. “The trust and investment of all shareholders will accelerate Ionity’s growth, the expansion of our high-power charging network across Europe and more broadly, the decarbonisation of the mobility sector.”
The company plans to have about 7,000 fast-charging ports in Europe by 2025, up from about 1,500 charging ports today. What’s more, Ionity projects that EV sales will represent about 80% of new-car sales in Europe by 2030, up from about 12% in 2020.
The investment shows that interest in EV-charging infrastructure goes beyond publicly traded names such as
ChargePoint
(CHPT),
EVgo
(EVGO) and
Volta
(VLTA). It also shows there will be a lot of competition.
Wall Street, of course, realizes this when writing about the publicly traded charging players. Baird analyst Ben Kallo recently launched coverage of
Wallbox
(WBX) with a Buy rating and $22 price target. Still, he noted competition when discussion how he values the stock.
“We are quite positive not only on the growth prospects of the EV-charging market, but also on Wallbox’s ability to operate effectively,” wrote Kallo on Monday. “However, the EV-charging market is highly competitive. As a result, we use a discounted [sales] multiple.” He values Wallbox stock at about 4 times estimated 2025 sales even though peers are trading as high as 8 times estimated 2025 sales.
Competition is something to watch out for. The long-term winners in the EV-charging race will have some competitive edge—in terms of capital access, or strategy, or technology. It’s the same for any business.
The four publicly trading EV-charging stocks don’t appear to be reacting much to the Ionity funding news, and they are down about 0.5% on average in Wednesday trading. The
S&P 500
are both off about 0.2%.
Write to Al Root at [email protected]
