Analysts at investment bank TD Cowen have emphasized the importance of public electric vehicle (EV) charging infrastructure in driving further adoption of EVs. According to TD Cowen’s analysis, the number of public charging ports in the US must increase to 1.7 million by 2030 in order to keep up with the growing EV fleet. However, questions remain regarding funding and installation of these charging ports.
The bank asserts that a reliable and widespread network of public EV charging infrastructure is critical in curbing CO2 emissions in the transportation sector. TD Cowen believes that with the installation of 1.7 million public chargers, the EV industry would thrive with multiple winners.
TD Cowen’s analysis also suggests that there will be a massive and rapid buildout of charging infrastructure, which would require an estimated total investment of $104 billion in the US by 2030. The bank identifies several areas that would drive this investment opportunity, as well as stocks that could benefit from the growth of EV charging infrastructure.
Passenger EV Charging Hardware
TD Cowen estimates that $91 billion will be needed for publicly available EV charging hardware and installations for passenger vehicles, while an additional $14 billion will be required for commercial vehicles by 2030. Charging providers such as ChargePoint Holdings, Wallbox, Blink Charging, Tritium, and ABB will be vying for these funds in the US market. By 2030, the bank expects 83% of the projected 20.8 million passenger charging ports to be home chargers, with the remaining 17% being public ports.
Heavy-Duty Fleets
The bank highlights the need for an extensive network of public charging infrastructure for heavy-duty trucks, as these fleets will create intense energy spikes that current power grids are unable to handle. TD Cowen predicts that commercial heavy-duty vehicles will account for 6% of total charging demand by 2030. The bank identifies Gage Zero, WattEV, TeraWatt, Voltera, and Greenlane as companies that could benefit from this sector.
Software
TD Cowen estimates that the market for charging software and warranty could reach approximately $6.6 billion in the US by 2030. This growth will be driven by increasing demand for remote monitoring and maintenance services. Charging software can track charging throughput, usage, connectivity issues, and payments. The bank expects charging demand to grow at a compounded annual growth rate of 41% in the same period.
Passenger Electricity Sales
The market for selling electricity to passenger EV drivers is projected to reach $18.2 billion by 2030, with 73% of the revenue coming from public fast charging ports. Companies such as EVgo, Blink, and Electrify America will be competing for this market share, along with Tesla, which has the largest DC fast charging network in the US.
Top Picks
TD Cowen is optimistic about ChargePoint, citing its hardware and subscription-based model, first-mover advantage, and impressive customer list. The bank has given ChargePoint an outperform rating and a price target of $11, representing around 95% potential upside. EVgo is also favored as charging trends improve, with TD Cowen giving it an outperform rating and a price target of $6, indicating over 50% potential upside.
Sources: TD Cowen, CNBC’s Michael Bloom