The fly in the ointment of the EV revolution

Dear Retail Investor,

I said it in my last article, and I’ll say it again…

 Diesel-powered vehicles are on their last legs.

 Governments are seeing to that.

 As of the beginning of 2021, 31 cities, states and countries worldwide have diesel bans in place.

 More are sure to follow.

 The main reason – excessive NOx emissions from diesels are polluting our air, making people sick and causing deaths.

Are gas-powered cars on the way out, too?

Big Auto is betting heavily on that.

To that end, they’re shifting massive resources from internal combustion engine (ICE) vehicles to developing EVs and improving their performance.

In fact, it’s estimated that they’ll spend $234 billion on this effort over the next five years.

I believe that bet will pay off…

But not right away.

New EV sales comprised a paltry 1.8% of the total U.S. market for new cars and trucks in 2020.

Why isn’t that number higher?

Because…

American drivers have serious concerns about switching to EVs

And until these concerns are met (and eventually they will be) gas-powered vehicles will continue ruling the roads.

 There are 3 big issues for consumers:

 1.EVs cost a lot more than conventional cars and trucks

 2. There are far few model options with EVs than their gas-powered counterparts

 3. It takes too long to charge most EVs

 

The first two points will definitely improve over the next few years.

Big Auto’s massive EV investments will see to that.

But the third point’s a stickler.

Shortening EV charging time is the key to winning widespread EV acceptance

A big selling point about EVs is that you can charge them at home.

And the simplest (and cheapest) way to do that is through a standard 120-volt outlet.

 But it’s S-L-O-W.

 That’s because a 120-volt outlet only gives you a few miles of range per hour of charging.

 At that rate, it can take a couple of days to fully charge a depleted EV battery.

 I know a guy who uses a 120-volt outlet and says it takes 12 hours to eke out 50 miles of cruising range for his Volkswagen e-Golf.

 That’s fine for him because he only uses his EV for local driving.

 But he’d get about four times more range if he upgraded to a 240-volt, Level-2 charger.

 That would cost him anywhere from a few hundred to a few thousand dollars.

 You see Level 2 chargers in many cities and towns, especially at workplaces and the parking lots of restaurants, grocery stores and shopping centers.

 They’re a big improvement over Level 1 chargers, but…

Level 2 chargers work too slowly for anyone who wants to take a longer trip

For trips that involve going hundreds of miles a day, drivers rely on Level 3 chargers.

They’re much faster than Level 1 or 2 chargers.

The reason is Level 1 and 2 chargers use alternating current (AC).

Level 3 chargers use direct current (DC) instead, which enables them to mainline power directly from the grid.

That allows them to charge an EV much faster.

Great, right?

But there are serious issues with DC chargers.

Not all DC chargers work at the same speed

Some take MUCH longer to charge EV batteries than others.

For example, a 50kW Level 3 charger is on the slow end of the scale.

One of these can take up to six hours to fully charge a depleted battery.

There are also generation Level 3 chargers boasting 250kW or 300kW capabilities.

And they can give an EV battery an 80% charge in about an hour.

Unfortunately, they pump current into EVs faster than most EV batteries can handle.

So they’re useless to many EV drivers.

Tesla S drivers can use Tesla’s nationwide network of 480-volt superchargers, which can charge a battery in about half an hour.

But they currently don’t work on other Tesla models (not to mention all the other EVs out there).

Porsche has an even more powerful charger – an  800-volt monster that can reportedly charge an EV battery in 22.5 minutes.

But it’s only good for one model – the Porsche Taycan

Sigh…

So most of us are stuck with EV chargers that can typically fill a battery to 80% capacity in an hour or so.

That’s still much faster than an at-home system or level-2 charger…

But it’s STILL A FRIGGIN’ HOUR!

Do you think Americans will put up with waiting an hour or so – every few hours, mind you – on thousand-plus mile trips?

Me thinks not.

Bottom line – we’ve got a long way to go before most Americans are driving around in EVs.

But that doesn’t mean you should ignore investing in EV technologies

As I said earlier, the auto industry is transitioning from ICEs to in EVs in a huge way.

And eventually, the problems with EVs I’ve been talking about will be solved.

So how should a retail investor play all of this?

One way is to invest in companies working to improve EV charging times.

I think Blink (Nasdaq: BLNK) is worth a look, as the company makes charging stations for residential and commercial use.

This company is growing revenues fast.

For example, their revenues have shot up 177% year over year (to $4.4 million).

In Q2 2021, Blink contracted, sold or installed 3,264 commercial and residential EV charging stations.

A year earlier, in Q2 2020, that number was 380.

As a result, Blink’s charging revenue was up a whopping 572% year over year for Q2.

Blink continues to rapidly expand, as you can see with these notable 2021 developments…

  • The company acquired Blue Corner, a private European EV charging operator and owner of more than 8,700 charging ports.
  • It reached an agreement with General Motors (NYSE: GM) to offer GM customers access to Blink’s charging sites
  • It installed its first set of Blink HQ 100 chargers for Nissan Motor (OTC: NSANY) Leaf vehicles in Santiago, Chile
  • It reached a 7-year agreement with Israel’s leading hospitality group, Fattal Hotels, to install charging stations at their locations 

Blink also secured grants from the Florida Department of Environmental Protection to install charging stations in 25 state locations.

And it won a grant from the Massachusetts Department of Environmental Protection to install five charging stations.

The bottom line is Blink is positioning itself to piggyback on the EV industry’s inevitable growth.

If you’re a long-term retail investor, I think companies like Blink that are working to solve EV charging problems are worth your consideration – as always, do your own due diligence.

Thanks for reading.

Always charging ahead,

Doug Fogel
Contributing Editor

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