Our latest Fireside Chat is a scintillating conversation with Andrew Fox, Founder and CEO of Charge Enterprises (OTCMKTS:CRGE). With a market capitalization of $300 million and operations in 19 countries, Charge Enterprises is building a network of electric charging, storage and service stations for electric vehicles (EVs) and micromobility applications (e-scooters and e-bikes). The company generated $111 million in revenues last quarter and is on track to achieve a $500 million annual run rate.
Charge provides turnkey engineering, furnishing and installation (EF&I) and project management services for its customers. Its customers include retailers, independent EV charging infrastructure providers, scooter networks and more.
The company is also building personal charging docking stations, called powerbanks, which are situated in bars, restaurants, transit hubs and sporting arenas.
Charge stations are powered from the existing electrical grid and require no battery swapping. Charge’s docking stations are housed in parking lots, garages, gas stations and other off-street locations. Users can locate docking stations through a map on the Charge app, which would also identify available vehicles and their level of charge.
With the number of EVs on U.S. roads projected to reach 18.7 million in 2030, up from 1.7 million at the end of 2020, charging infrastructure is a limiting factor to the universal deployment of electric vehicles.
Here’s what Andrew had to say about the micromobility and electric vehicle markets, today’s lofty equity valuations, what he’s watching on Netflix (NASDAQ:NFLX) and more.
I would love to understand the micromobility business model and how it works from a cost perspective.
So, for starters, I was an early investor in Lime scooters. Post the investment I made in Lime, I saw the Achilles heel of their business model … [and] the entire EV business model world … a lack of supporting infrastructure. I sold some of my Lime stock and started Charge in 2019.
My thesis is very simple. I’m kind of doing the work that other people don’t really think about or do. And the infrastructure space, especially the EV space, is a very, very interesting space. The reason why is because people don’t understand … you can’t sell the level of electric vehicles that you want to sell without upgrading the electrical around it.
…on the equity capital markets and recent IPO valuations
We used debt obviously to grow, but we didn’t vaporize a billion dollars to create this type of revenue. And if you look at some of our peers who have multi-billion dollar market caps with little or no revenue … [we’re] kinda the under dog blue collar story that nobody’s heard of. And there’s all these big boys and we’re sitting around the table … and I’m looking around the table and thinking you guys are losing a lot of money.
[We’re] in a space where … the equity markets have been really good to people right now. So they’ve been able to raise tremendous amounts of capital … but look at the revenue that’s being created.
How much of your business is based in micromobility versus EVs?
Well, micromobility [companies] still haven’t really gotten their act together. I mean, it’s still kids out there burning hundred dollar bills. 90% of my business today is telco service. 10% is EV service. Micromobility is still [in] its infancy, and I’m not even sure about the form factor of those kick scooters. I just think it’s, you know, it’s a really tough business because … [of the clutter issue].
There’s a bit of a blight on these cities’ front door. Even Paris, which is one of Europe’s largest markets … is considering banning [scooters] altogether. And so our focus is really on the EV side … [because that] side of the business I am as certain as I am that the sun’s coming up tomorrow … it’s still going to be a business tomorrow.
What do you think of micromobility as a long-term business? Companies like Bird and Lime aren’t yet profitable.
I kind of scratch my head sometimes on micromobility, because every dollar [these companies] earn, they burn three or four. You’ll never make it up in volume. [Bird (Switchback II (NYSE:SWBK) and Lime] have raised a billion dollars and … every month they burn substantial money … the jury is still out on those kick scooters. You’ve seen companies like Lime shuffle their C-suite a couple of times already since they started. And even though they’ve raised … a billion dollars or so, which is no easy feat … they haven’t yet proven that they can sustain their business 12 months out of a year.
What you see [is] a lot of seasonality to it. In the warm weather months, business is very good, but then the rest of the year, it’s okay … or a loss. And so they really have to transform their business models into, you know, more than just providing transportation services. Uber (NYSE:UBER) is a perfect example of a company that’s done that with Uber Eats. Micromobility companies have to figure out where they fit in the ecosystem of door dashers and and things like that, because you can’t just expect that, you know, four months out of the year when the weather [is] good, you can make enough money to justify [the] business for 12 months a year.
What do you think about Tesla’s competitors?
Until there’s more infrastructure… it’s going to be really, really hard to convince people to buy EVs. Tesla (NASDAQ:TSLA) built a great following. You’ve gotta give Elon credit where credit is due. I mean, he really jump-started this entire industry.
[Meanwhile,] these new robber barons of today are thinking about exploration of space and all these other things … there are a lot of really big problems to solve here at home as well. And so by [Musk] solving the problem the way he did and opening up the market the way he did, I think it was … a huge positive. And, I think that’s where companies like ours are here to help those guys sell more and more cars.
On a more fun note … What are you watching these days?
I just watched the funniest thing on Netflix called My Unorthodox Life … about Julia Haart. You should watch it. It was eye-opening and hilarious … and refreshing … I’m all about the girl power.
Do you own an electric vehicle?
I have a Tesla, but it’s sad to say it’s three years old and it has less than 2,000 miles on it.
Your comments and feedback are always welcome. Let’s continue the discussion. Email me at email@example.com.
On the date of publication, Joanna Makris did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joanna Makris is a Market Analyst at InvestorPlace.com. A strategic thinker and fundamental public equity investor, Joanna leverages over 20 years of experience on Wall Street covering various segments of the Technology, Media, and Telecom sectors at several global investment banks, including Mizuho Securities and Canaccord Genuity.
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