Why Are EV Charging Stocks Down Today?

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Electric vehicle (EV) charging stocks are well in the red today following a new deal between General Motors (NYSE:GM) and EV king, Tesla (NASDAQ:TSLA), that would allow GM EV owners to use Tesla’s broad supercharger network.

Today’s deal represents the second of its kind, sort to speak. Just last month, Ford (NYSE:F) signed a similar deal with Tesla, allowing their EV models to be compatible with Tesla’s supercharger network. It seems Elon Musk’s brainchild is on something of a campaign to partner with car makers to expand the users of its well-established charging system.

Analysts loved the “win-win” deal between Ford and Tesla last month, and it seems today’s deal clearly has a similar inflection. Musk himself claimed the agreement “is going to be a fundamentally great thing for the advancement of E.V. adoption.”

Reasonably so, Tesla’s supercharger network is both broad and increasingly efficient. GM customers are essentially gaining “almost double access to chargers,” said GM Chief Executive Mary T. Barra.

That said, according to some analysts, the growing number of potential Tesla supercharger customers may sour current Tesla customers, who will likely be forced to endure higher competition for the heralded EV slots. “I don’t think Tesla owners will be pleased to watch a Ford Mustang Mach-E getting charged, while they wait in line,” Ben Rose, president of Battle Road Research, told the New York Times.

As you may imagine, this isn’t promising for EV charging companies in the broader market. Indeed, companies like ChargePoint (NYSE:CHPT), EVgo (NASDAQ:EVGO), and Blink (NASDAQ:BLNK) are each well in the red today, down between 10% and 15% heading into afternoon trading.

EV Charging Stocks Continue Descent as Tesla Carves Out Advantage

Tesla’s increasing support and compatibility between its charging stations and other EV makers are clearly a bearish indicator for many of the other EV charging stocks in the country. Indeed, Tesla already operates the majority of fast chargers in the U.S. By opening its stations to other brands, the company is dramatically growing its chargers’ user base at the expense of many startup-stage charging companies.

In fact, just a few months ago, Tesla announced it would commit to opening as many as 7,500 charging stations to non-Tesla EVs by the end of next year.

Despite this, many EV charging companies have remained stoic in the face of growing competition.

“We support all moves to increase E.V. adoption,” said Brendan Jones, Chief Executive of Blink Charging. “We are monitoring the market closely and will adjust if we think necessary.”

Even aside from today’s drop, EV chargers are in the midst of an unfortunate year. BLNK stock is down 45% year-to-date, while EVGO is down 32% in just the past six months.

On the date of publication, Shrey Dua did not hold (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.

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.

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