ChargePoint, which holds just over a third of the US’ public EV charging infrastructure, announced it has secured USD232 million in funding. The funding comprises of USD175 million raised from the selling of new ordinary shares. The rest includes USD57 million raised under an at-the-market (ATM) facility, over the course of Q3 2023.

A Road to Profitability

This announcement comes after the company secured a significant USD150 million credit facility in July this year. Courtesy of leading financial institutions including JP Morgan, HSBC, Citi, and Goldman Sachs. Furthermore, it comes as ChargePoint battles the challenges of net losses, and liquidity issues. In Q2 this year, the company recorded a net loss of USD125.3 million, up from USD92.7 million in the previous year’s same quarter. Additionally, there have been reports of cash flow constraints. Its operational costs at the end of Q1 2023 were USD104 million, however, it only had USD314 million in cash remaining. This suffices to nine months’ worth of cash left in hand.

ChargePoint CFO Rex Jackson, commenting on the new financing, said: “We are pleased to secure USD232 million in funding this quarter, which supports our stated goal of adjusted EBITDA profitability in the fourth fiscal quarter of next year. These raises and our recently announced USD150 million revolving credit facility are consistent with our announced capital strategy to bolster our balance sheet. We have no further plans to access the ATM.”

Rho’s Evaluation

ChargePoint’s situation is not a unique one, but rather a common trend across multiple players in the industry. The rollout of charging infrastructure has been rapid in recent years, as players aim to gain as much market share as possible and make use of new incentives and subsidies. With high-speed DC chargers growing in popularity, the CapEx requirements for rolling out charge points are significantly higher. This, combined with the fact that utilisation rates remain low, means that balance sheets across the industry are under strain. ChargePoint, like many others in the market, is playing the long game and this latest funding round boosts confidence in this approach.

US charging point operators (CPOs) are also facing several new challenges. The growing popularity of the NACS has put pressure on CPOs to adopt this standard. In November 2022 Tesla opened the NACS to third parties, in March 2023, it then opened its fast-charging network to all EVs. This resulted in a flurry of OEMs announcing a switch to NACS by 2025.

Moreover, this shift has been accompanied by changing regulatory requirements and logistical challenges across different states. This causes delays and increases the complexity of accessing state and federal funding for charging initiatives. Kentucky and Texas announced that both NACS and CCS connectors will be required at any new charging stations if they are to benefit from public funds. It is expected Florida will also follow suit as well as other states in the longer term.

These factors collectively create a challenging environment for CPOs, necessitating careful planning and strategic decision-making to help navigate the evolving electric vehicle charging market.

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Sources: ChargePoint News