EV Charging Stocks Surge on Plug Standardization

Investors are still grappling to understand the implications of EV (electric vehicle) charging in the aftermath of Tesla’s recent decision to open up its network. The move effectively ended the North American standards war, settling the type of plug that will charge U.S. EVs in the future.

While it’s true that “there is more technology in an EV plug than a gas pump,” according to Wallbox CEO Enric Asuncion, it’s similarly simple: “It’s as simple as changing a plug.” Despite this, investors have had a harder time seeing it that way. Wallbox (ticker: WBX) stock has dipped about 13% since Tesla’s announcement in May, and shares of fellow EV charging company ChargePoint are down around 8%. That is in contrast to the Nasdaq Composite index, which has risen by approximately 5%.

However, recent announcements have helped this trend to change. ChargePoint recently revealed its “NACS solutions for new and existing EV-charging deployments, enabling customers to continue to serve any EV in any parking space.” This move reflects how quickly the industry can adapt.

As a result, Wallbox and ChargePoint stocks both rallied on Tuesday, up by 2.5% and 2.4%, respectively, in pre-market trading.

The broader market also assisted this trend, with S&P 500 and Nasdaq futures up 0.2% and 0.4%, respectively. Meanwhile, since the Tesla-Ford deal in May, Tesla’s stock has risen by 31%, or approximately $51 per share, adding an exceptional $180 billion in market value.

The Role of AI and Charging in Tesla’s Stock Gains

Tesla’s recent stock gains cannot be simply attributed to charging and artificial intelligence developments, though these factors have certainly played a role. Nvidia’s success with AI chips has also contributed to the rise in Tesla’s stocks. With the NACS plug becoming standard, Tesla could make up to $12 billion annually from its charging network by 2030. This revenue alone would produce $1 billion in additional earnings before interest, taxes, depreciation, and amortization. Taking recent valuation multiples, this value could be as much as $20 billion.

But, according to Bernstein analyst Toni Sacconaghi, this is not enough to sway his bearish view of Tesla. Despite this, better charging infrastructure would lead to increased EV sales that wouldn’t just benefit Tesla, but the entire industry. Although Tesla has about 50% of fast chargers in the US, it remains possible that the market has yet to fully work out the value changes stemming from developments in AI and charging technology.

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