Shares of Blink Charging (NASDAQ: BLNK) dropped 10.8% through 11 a.m. ET on Wednesday, probably in response to investors finally getting around to reading a report in The Wall Street Journal yesterday that detailed the troubles afflicting electric car charging stocks in the U.S. -- troubles that have cost Blink nearly 60% of its market cap over the last 52 weeks.
What did "The Wall Street Journal" say?
In a long report, WSJ explained why investors are no longer interested in paying "lofty valuations" for charging stocks like Blink, which are losing money and may be losing business to Tesla's (NASDAQ: TSLA) Supercharger network of car chargers as well.
Charging companies "don't expect to turn profitable for about a year," says the Journal. (And actually, according to data from S&P Global Market Intelligence, most analysts don't expect Blink to turn profitable until 2026.) Slowing growth of electric car sales is one thing keeping charging companies away from profitability. The high cost of building out charging networks is another.
But a third factor may be of greater concern to Blink shareholders in particular.
Beware of Tesla
The Journal notes that as more and more automakers design their EVs to work with Tesla Superchargers, charging companies like Blink are facing more competition.
What's more, according to an August report by J.D. Power, Tesla is currently car owners' No. 1 choice for "DC Fast Charger" charging services out of four companies, and its No. 2 choice among (slower) "Level 2 Charging" stations. Worse, Blink placed dead last in this latter survey, with an overall customer satisfaction index rating of 535, versus 661 for Tesla Superchargers. (The average rating across the industry was 617.)
With only $250 million in market capitalization, $212 million in losses per year, and a bad reputation for service quality -- in an industry where, already, one out of four times, EV owners report they've been unable to charge their cars when they need power, because the charging stations are broken (Tesla's record of reliability is closer to 97%, by the way) -- things aren't looking great for Blink right now.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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