Another SPAC-Aided EV Charging Network Joins Fray

Volta Charging, a developer of electric-vehicle charging stations, is set to begin trading on Friday after its merger with a SPAC received shareholder approval, a move that adds to the proliferation of EV stocks on U.S. exchanges.




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Tortoise Acquisition (SNPR), the SPAC — or special-purpose acquisition company — said Wednesday that its shareholders voted to approve the tie-up. The deal is expected to close Thursday.

Once the deal closes, Tortoise will change its name to Volta Inc. Its shares would trade on the New York Stock Exchange under the ticker “VLTA.”

Volta runs a network with more than 1,700 electric-vehicle chargers across multiple U.S. states. The two companies announced the merger deal in February.

Volta will join other EV stocks like ChargePoint (CHPT), EVgo (EVGO) and Blink Charging (BLNK) that are trying to build out charging networks to handle demand from a growing number of younger, more environmentally conscious electric-vehicle owners.

“We expect an acceleration in our business as EV penetration increases and economies in our key markets reopen,” ChargePoint CEO Pasquale Romano said in the company’s earnings news release in June.

EV Stocks, Sales Growth

But those companies are still losing money, even as sales grow from low levels. IBD’s EPS Ratings for those EV stocks are also weak.

ChargePoint fell 2.9% in the stock market today. EVgo dipped 0.2%. Blink Charging lost 2.8%.

The future Volta, current SNPR, stock sank 4.3%.

Jefferies’ EV stocks analysts, in a research note in June, said they expected U.S. EV charging stations would exceed 1 million locations by 2030, and surpass 2.4 million by 2035. Support from businesses, auto-equipment manufacturers and the government would likely help that rollout, they said.

But they noted that most EV charging in the U.S. takes place at home. And they said much of the EV charging infrastructure sits on the nation’s coasts, and the economics of vehicle charging are complex and often expensive.

They said that “costs related to electrical grid updates, electrical installation and upgrades, and charging network subscription fees can quickly compound investment (costs) while grid load limits opportunity to achieve economies of scale.”

Later in the note, the analysts said, “Development costs can vary, although they also tend to skew higher with increased charging power. Construction, engineering, and labor costs often fluctuate with site location, state regulations and permitting, as well as risks of delays.”

In addition, SPACS — the quicker, and preferred, vehicle to go public for many EV stocks — and the companies they have taken public have come under greater scrutiny. Electric-vehicle makers like Lordstown Motors (RIDE) and Nikola (NKLA) have been accused of misleading investors and faced investigations from regulators.

Still, large automakers like General Motors (GM) and Ford (F) are shifting toward electric vehicles. Hopes for a broad U.S. infrastructure package have occasionally jolted EV stocks higher. IHS Markit in January said it expected global EV sales to increase by roughly 70% this year.

General Motors fell 1.9%. Ford lost 1.6%.

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William Murphy

William Murphy

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