EV-charging industry is doing everything except making money

US President Joe Biden’s plan to wean US drivers off fossil fuels requires massive investment in public charging stations to power the electric-vehicle (EV) revolution. So far, none of the companies that deploy the equipment has figured out how to make a profit.

The dilemma boils down to demand, and there is a certain chicken-and-egg quality to it: Most electric-vehicle drivers charge their cars at home, so many public charging stations get little use, but lots of people still driving gasoline-powered cars would not consider going electric until they see charging stations widely deployed, for fear that they will run out of juice on the road.

Speculators are piling into the industry, convinced that boom times are around the corner, while short sellers and other skeptics have said that some of these companies would go belly-up long before they figure out how to make money.

Biden’s plan to spend US$15 billion to help create 500,000 more public stations by 2030 is feeding the optimism, with investors flocking to EV charging companies since his election. The risk is that the early movers would get badly burned, potentially souring capital markets on the industry for years to come.

“It’s definitely going to require years of investment before they get any return,” said Chris Nelder, who has studied the economics of charging for the RMI energy research institute.

Nelder is sure that electric-vehicle charging would eventually be profitable.

However, when that tipping point will arrive is one of the biggest questions hanging over charging companies.

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