Needham downgrade EV charging operators citing low visibility on growth

Investing.com - Needham has downgraded two EV charging operators Blink Charging Co (NASDAQ:BLNK) and ChargePoint Holdings Inc (NYSE:CHPT) to Hold, citing low visibility into a recovery in charging equipment demand and persistent end-market challenges.

“We continue to see an eventual tailwind for charging equipment given the delta between the growth in EVs on US roads and installed equipment, but the timing of any tailwind is now more uncertain given the change in White House leadership, lowering our confidence in a durable equipment ordering cycle that would benefit both companies,” analyst added.

Both charging operators have been struggling to capitalize on the rapid growth in EV adoption. Despite triple-digit revenue growth for Blink in 2023, its revenue 2024 has faltered. Both companies recently lowered revenue guidance due to volatile demand.

Blink in August lowered its full year 2024 revenue guide to fall between $145 million and $155 million, down from its prior forecast of between $165 million and $175 million. ChargePoint issues forecast its Q3 revenue of $85 million to $95 million in Sept. 

The incoming U.S. administration’s plans to remove the $7,500 EV tax credit could dampen long-term EV adoption, further straining demand for charging equipment. The lack of clear federal support undermines confidence in a sustained growth cycle for charging infrastructure.

Needham noted that though EV adoption has surged, charger installations have lagged, leading to increased utilization of existing infrastructure. However, this dynamic has yet to translate into a significant boost in equipment sales.