The current operating environment has proven to be challenging for start-up companies that are not yet profitable, particularly in the face of higher interest rates and a slowing economy. However, electric-vehicle (EV) charging companies have found ways to adapt by exploring various strategies, with a focus on cost control.
Beam’s Third-Quarter Results
Recently, EV-charging company Beam (ticker: BEEM) released its third-quarter results. The company reported a loss of $3.6 million, generated from sales amounting to $16.5 million. Although Wall Street had anticipated figures of $3.9 million and $16.5 million, respectively, Beam’s loss was slightly smaller than expected.
Expanding Through Acquisition
Notably, Beam placed particular emphasis in its announcement on the recent acquisition of Europe-based Amiga DOO. Amiga DOO specializes in developing infrastructure equipment such as light poles. This acquisition signifies a form of vertical integration for Beam, distinguishing it from other EV charging companies. Beam’s core business involves providing solar equipment, thereby reducing dependency on traditional power grids and eliminating the need for expensive infrastructure modifications. With the acquisition of Amiga DOO, Beam can now offer a broader range of electrical infrastructure solutions to its potential customers.
Wallbox’s Market Moves
Beam is not the only EV charging company looking to expand its reach through strategic moves. Wallbox (WBX) recently acquired ABL, a German company known for its commercial charging solutions. This acquisition significantly broadens Wallbox’s product offerings in the market.
However, Wallbox reported third-quarter sales lower than expected on November 9th. In light of this, CEO Enric Asuncion stated during the conference call that higher interest rates have had an impact on EV demand. Consequently, Asuncion’s primary focus moving forward will be on cost control and expanding the company’s product line, both of which are areas within his control.
In summary, start-up EV charging companies are persevering in a challenging operating environment by adopting various strategies, including mergers and acquisitions, as well as a strong emphasis on cost control. These steps are essential for surviving and thriving in an industry impacted by higher interest rates and an overall slowing economy.
Economic Downturn Hits Stocks
The challenging economic landscape has had a significant impact on the stock market. Wallbox stock has experienced a substantial decline of approximately 77% over the course of the past 12 months, while Beam stock is down about 62%. Similarly, ChargePoint, the leading provider of electric vehicle (EV) charging solutions in the United States, has seen its shares drop by nearly 80% over the same period.
Customer Acquisition Focus for ChargePoint
During a fourth-quarter conference call in March, ChargePoint CEO Pat Romano emphasized the company’s approach to mergers and acquisitions (M&A). Romano stated that their primary consideration is the acquisition of customer bases with low liabilities and practical integration potential. The technology itself is not the main criteria for evaluation.
Romano expressed satisfaction with ChargePoint’s technology lineup, but he acknowledged the possibility of M&A opportunities. Investors will have their eyes on ChargePoint’s upcoming third-quarter report. As a note, ChargePoint operates on a fiscal quarter that ends in October, differing from the more common September-end quarter. This report will provide insights into Romano’s perspective on industry consolidation and cost control.
Beam Global Conference Call
Beam Global, another player in the EV charging industry, is hosting a conference call to discuss their latest results at 8:30 a.m. Eastern time.
Following the release of these results, Beam Global shares saw a 3.6% increase in premarket trading. S&P 500 futures remained flat, while Nasdaq Composite futures experienced a slight uptick of 0.1%.