Electric-Vehicle-Charging Company ionity announced an investment by a consortium consisting of several auto manufacturers. Ionity is a privately held firm based in Munich, but investors should have good reason to heed Wednesday’s announcement.
Ionity is receiving approximately 700 million euros, or $780 million, from BlackRock (ticker: BLK) as well as its existing shareholders including Ford Motor (F), BMW (BMW.Germany), Volkswagen (VOW3.Germany), and others. to expand its rapid-EV-charging network across Europe.
“BlackRock’s entry as a shareholder and the commitment of our existing shareholders underscores Ionity’s attractiveness to investors and reaffirms the strength of our strategy,” said Ionity CEO Michael Hajesh in the company’s news release. “The trust and investment of all shareholders will accelerate Ionity’s growth, the expansion of our high-power charging network across Europe and, more broadly, the decarbonization of the mobility sector.”
The company plans to set up around 7,000 fast-charging ports in Europe by 2025, up from about 1,500 charging ports today. In addition, Ionity projects that EV sales will represent about 80% of new car sales in Europe by 2030, up from about 12% in 2020.
The investment shows that interest in EV-charging infrastructure extends beyond publicly traded names such as ChargePoint (CHPT), EVGO (EVGO) and Volta (VLTA). It also shows that there will be a lot of competition.
Wall Street, of course, feels it when writing about publicly traded charging players. Baird analyst Ben Callow recently launched coverage of Wallbox (WBX) with a buy rating and a $22 price target. Still, he took note of the competition when discussing how he values the stock.
“We are quite positive not only on the growth prospects of the EV-charging market, but also on Wallbox’s ability to operate effectively,” Kallo wrote Monday. “However, the EV-charging market is highly competitive. As a result, we use discount [sales] Multi.” He values Wallbox stock at about 4 times projected 2025 sales, even though peers are trading as high as 8 times projected 2025 sales.
The competition is something to watch. Long-term winners in the EV-charging race will likely have some competitive edge in terms of capital access, or strategy, or technology. It is the same for any business.
Four publicly traded EV-charging stocks didn’t react much to the Ionity funding news, and they’re down about 0.5% on average in Wednesday’s trading. The Nasdaq Composite Index and the S&P 500 are both down about 0.2%.
Write to Al Root at [email protected]