Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
week, the quieter half of Tesla Motors (TSLA:Nasdaq) founding team and the company’s chief
technology officer, JB Straubel gave a speech at a solar energy conference in
San Francisco.He is largely responsible
for Tesla’s innovative battery technology, so it should be no surprise that he
thinks that eventually all vehicles will be powered by batteries.As profound a this view might seem, let’s
remember that if hammers could see, the world would look like a nail.
thought it worthwhile to take Straubel at this word.This is a man who is building a factor big
enough to produce a half million batteries per year to charge Tesla
all-electric car.Yet, batteries only provide
a solution to store energy for on-demand use in the vehicle. Once that energy has been depleted, the
battery and the car are stranded alongside the road.
Is there an investment opportunity in electric car
According to the
Electric Driver Transportation Association (EDTA), at the beginning of 2015,
there were approximately 286,000 electric cars on the road.It does not seem like many cars.To bring the total into perspective, it is
important to know that 118,773 electric cars were sold in 2014 alone, and that
was 35% more than the year before.Thus the
private electric car base in the U.S. remains small, but it is growing at a
fairly rapid pace.
represent about 20% of the electric cars on the road in the U.S., based on a
comparison of Tesla’s public filings and the EDTA car census. Tesla provides its customers with a free
charging at its SuperCharger stations
and brags about the freedom Model S drivers have to roam the entire continental
U.S. for free.It is not so simple for the
rest of the drivers sitting behind the steering wheels of a Nissan Leaf (at
least 150,000 on the road) or a Chevrolet Volt (75,000) or Toyota Prius PHEV
(61,000), among others.There are home charging
units available and likely most electric car owners plot out a charging
strategy for home, work and local shopping situations.The trip to the beach or visit to grandma might
still be problematic.
several companies already trying to speed electric car drivers to their
destination. I take a look at three of them here.
operates the largest network of electric vehicle charging stations, with sites
in the U.S., Europe and Australia.The
company claims over 22,300 charging locations in operation.Building this network has been a culmination
of a long list of partnerships with parking facility owners, employers and
municipalities as well as alliances with electric car manufacturers.This large network has required capital.ChargePoint last came to the capital market
in May 2014, when it raised $22.6 million in new funding.The deal brought the company’s total capital
raised to $110 million, which appears to have come from a mix venture capital
firms like Kleiner Perkins Caufield and Rho Ventures as well as from strategic
investors such as BMW.
Car Charging Group (CCGI:OTC) has gobbled up a couple of other companies with car charging
technologies and networks-Blink and Ecototality.The acquisitions have given Car Charging the
beginnings of a nationwide network.While
the company makes much of its cooperative agreements with major retailers and
employers such as IKEA, Walgreens, Walmart and the Mayo Clinic, it has not
disclosed an updated number of charging stations available to the public.A recent partnership with Honeywell
is making Blink EV charging available at Honeywell offices in Phoenix, Arizona.
company Envision Solar
International, Inc. (EVSI:OTC/PK)
is gaining visibility.While not aiming
for the same nationwide web of charging stations across the country, the company
offers a unique and valuable technology to owners of electric vehicles. Their EV ARC charging unit is solar powered,
using a battery pack to enable charging services available around the clock.Envision has been taking orders since the
beginning of 2011, focusing much of its marketing effort on the sunbelt states
of Arizona and California.Nearly 80% of
all electric cars in the U.S. are located in California where strict emission
standards and rebates, drive electric vehicle economics.The company recently won a contract with the
state of California to supply its proprietary portable electric vehicle
charging units for use by state government agencies and employees.The portable units make possible EV charging
in remote locations that are not grid connected.
about these three companies might be grumbling a bit at the lack of investment opportunity.ChargePoint is a private company and
off-limits to most investors.The stocks
of Car Charging Group and Envision Solar both are publicly registered and
available for minority investors.Unfortunately, both stocks trade for pennies per share.Nonetheless, I believe these companies are
worth watching carefully as electric vehicles become a larger component of
First, I expect
considerable consolidation in the EV charging industry.There are numerous companies in the U.S.,
amd PlugShare.In Europe there is Full Charger International,
Charge and Elektromotive Groupas well
as Ecotricity in the U.K.Mergers and acquisitions are likely to be an
economical means to capture technology and market share.Although Car Charging lost out with its bid
on the assets of bankrupt Better Place, it had already proven its capacity to
strike a bargain with the Ecototality and Blink deals.
has been well received in the venture and private capital market.At some time its investors will seek to reap
returns, making a public offering more likely than not.It is worthwhile following ChargePoint in
case this is the path it is traveling.
pricing of Car Charging and Envision as penny stocks, are less intimidating if
the stocks are regarded as options. These
two companies are not direct competitors at this point and offer interesting
footholds in the market for car charging stations.For a few pennies traders will have security linked
to car charging technology and capacity that could fizzle…or flourish.Management will be working toward the latter
outcome, making the stock an option on management execution.
The next post focuses on a large, public company that
has taken significant interest in electric car charging.
Neither the author of the Small Cap Strategist web
log, Crystal Equity Research nor its affiliates have a beneficial interest in
the companies mentioned herein.