Shares of EV infrastructure companies including ChargePoint Holdings (CHPT), EVgo (EVGO), and Blink Charging Co. (BLNK) were down in pre-market trading at the time of publishing on Friday after these companies got a bolt out of the blue following General Motors (GM)’s deal with EV major Tesla (TSLA) that would allow GM EV drivers to use Tesla’s supercharger network.
Last month, Ford Motor Co. (F) also inked a similar deal with Tesla. Following the GM and Tesla deal, Bank of America analyst Alex Vrabel viewed the collaboration as cautious for EVgo but unlikely to make much impact for CHPT.
Vrabel commented, “While GM expressly identified ongoing commitment to EVgo’s eXtend business in the release we expect investors will be uneasy about competition as it now has another major partner.”
The analyst added that with this deal, EVGO is likely to compete more directly with TSLA for the utilization of its charging network. The analyst reiterated a Sell rating on the stock in view of the new uncertainties due to this partnership which could hinder EVGO’s positive cash flow generation.
Overall, analysts are cautiously optimistic about EVGO stock with a Moderate Buy consensus rating based on four Buys, three Holds, and one Sell.
When it comes to ChargePoint Holdings, Vrabel noted that utilization of CHPT’s charging network is likely to be unaffected by this move as its DC Fast network is largely fleet focused. The analyst added that a long-time market opportunity lies in its DC Fast charging network, which is the focal point of the Supercharger partnerships.
The analyst is bullish about CHPT with a price target of $14, implying an upside of 45.7% at current levels. Overall, analysts are upbeat about CHPT stock with a Strong Buy consensus rating based on 10 Buys and three Holds.
Investors can get exposure to the EV sector through the KARS ETF. Overall, the KraneShares Electric Vehicles & Future Mobility Index ETF (KARS) is down by around 15% in the past year.