We recently compiled a list of the 11 Small Cap EV Stocks to Invest In. In this article, we are going to take a look at where ChargePoint Holdings Inc. (NYSE:CHPT) stands against the other small-cap EV stocks.
An Overview of the Global Electric Vehicle Market
The global electric vehicle (EV) market continues to expand, driven by the need for sustainable transportation and advancements in technology.
According to the International Energy Agency (IEA), nearly 14 million electric cars were sold worldwide in 2023, marking a 35% increase from the previous year, with 95% of these sales occurring in China, Europe, and the United States. This surge brought the total number of electric vehicles on the road to 40 million. Electric cars represented about 18% of all car sales in 2023, up from 14% in 2022 and just 2% in 2018. The growth is primarily driven by battery electric vehicles, which made up 70% of the electric car stock in 2023. The electric vehicle market is expected to expand rapidly as consumer demand for cleaner transportation grows.
Electric car sales are expected to rise to about 17 million in 2024, which would be an increase of over 20% compared to 2023. Electric vehicles could make up more than 20% of all car sales in 2024. This forecast is supported by current trends, government policies, and the usual seasonal patterns seen in EV sales.
China remains the largest market for electric vehicles, accounting for nearly 60% of new electric car registrations in 2023. Europe follows with approximately 25%, and the United States accounts for around 10%.
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There is significant potential for growth in emerging markets, where EV adoption is taking off. We could soon see a shift from early adopters to mass-market consumers. The introduction of new models and innovations, such as improved battery technologies and charging solutions, will play a crucial role in this transition.
Additionally, government policies and incentives continue to support the transition to electric mobility, further fueling demand. To compete with China in the EV market, the US is focusing on localizing its EV supply chain and increasing production capacity. Reuters reported on October 22 that US Energy Secretary Jennifer Granholm announced that the Department of Energy is quickly working to finalize $1.7 billion in grants aimed at converting automotive plants for electric vehicle production. This funding will help automakers change their existing facilities to make electric vehicles and their components.
With continued advancements, investments, and increasing acceptance among consumers, the future looks promising for the electric vehicles market.
Methodology
To compile our list of the 11 best small-cap EV stocks to invest in, we reviewed our own rankings and consulted various online resources to compile a list of the best small-cap EV stocks. Please note that we defined small-cap stocks as those with a market capitalization between $500 million and $10 billion.
From an initial pool of more than 20 small-cap EV stocks that met our criteria, we focused on the top 11 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 11 best small-cap EV stocks to invest in are ranked in ascending order based on the number of hedge funds holding stakes in them.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close up of an Electric Vehicle charging station, emphasizing the innovative technology.
ChargePoint Holdings Inc. (NYSE:CHPT)
Market Capitalization: $504.27 Million
Number of Hedge Fund Holders: 12
ChargePoint Holdings Inc. (NYSE:CHPT) is a leading American company in the electric vehicle (EV) infrastructure sector. The company operates one of the largest networks of EV charging stations in North America and Europe. ChargePoint Holdings Inc. (NYSE:CHPT) operates with a capital-light business model, allowing it to grow alongside the increasing demand for EVs.
On December 16, ChargePoint Holdings Inc. (NYSE:CHPT) and the Colorado Energy Office announced the completion of six fast-charging corridors in Colorado. In total, 33 DC fast charging sites with over 80 charging ports are now available along highways across Colorado. This project was supported by $10 million in state funding and contributions from private and local government partners, demonstrating ChargePoint Holdings Inc.’s (NYSE:CHPT) strong community ties and commitment to enhancing EV accessibility.
Additionally, on December 18, 2024, the company announced a partnership with General Motors to install hundreds of ultra-fast charging ports across the US. This initiative aims to enhance access to charging stations and improve the overall EV driving experience, with plans for public availability by the end of 2025. Such collaborations position ChargePoint Holdings Inc. (NYSE:CHPT) as a key player in expanding EV infrastructure.
In October 2024, ChargePoint Holdings Inc. (NYSE:CHPT) introduced the CPF50, an affordable Level 2 charging solution priced at $699. This product lowers the entry barriers for fleet electrification while providing access to advanced fleet management software. Such innovations are essential for businesses looking to transition to electric fleets efficiently. Moreover, ChargePoint Holdings Inc. (NYSE:CHPT) launched the ChargePoint Essential cloud plan, which offers small businesses and multi-family housing access to its software platform at a competitive price. This plan allows station owners to earn revenue from charging fees, making it financially attractive.
CHPT is one of the best small-cap EV stocks to invest in. With its extensive and growing network and ongoing innovations, ChargePoint Holdings Inc. (NYSE:CHPT) is well-positioned for growth as demand for EV infrastructure rises.
Overall, CHPT ranks 7th on our list of the small-cap EV stocks to invest in. While we acknowledge the potential of CHPT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CHPT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.