ChargePoint (NYSE: CHPT) stands as a pivotal player in the electric vehicle (EV) market. While it doesn’t manufacture cars, it supplies essential charging products and services crucial for the adoption of EVs. The company’s journey is captivating, yet potential investors must recognize a significant concern: ChargePoint is currently operating at a loss with no immediate signs of recovery.
Understanding ChargePoint’s Role
ChargePoint specializes in creating EV charging solutions and offering associated services. This positions the company as a “picks-and-shovels” investment within the electric vehicle landscape—crucial because EVs need charging systems to operate. While not as glamorous as Tesla (NASDAQ: TSLA), which produces both electric vehicles and charging infrastructure, ChargePoint caters to a more comprehensive range of the EV ecosystem, accommodating vehicles from numerous major automotive manufacturers.
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With the global shift away from fossil fuels and governmental regulations on emissions, ChargePoint is poised to thrive in a growing market. For instance, the company noted that its top 25 customers’ spending surged from $5 million in early 2017 to $83 million by early 2023—an impressive increase of 16 times. However, EVs currently comprise less than 10% of the U.S. vehicle market; thus, substantial growth potential remains.
ChargePoint’s Commitment to Technology
In September 2024, ChargePoint emphasized the critical role of technological advancements in EV charging. Their document states, “ChargePoint is working across all market segments and all classifications of electric vehicles to remain the leader in charging innovation, developing products now for the future charging ecosystem.” While specific technologies may vary, this commitment to innovation is essential for maintaining a competitive edge.
However, this focus on R&D contributes significantly to ChargePoint’s financial losses. In the fiscal second quarter of 2025, the company generated a gross profit of approximately $25.6 million. Comparatively, expenses mounted to $51.8 million for sales, marketing, and administration combined, while R&D costs alone reached $36.5 million—exceeding gross profits. Consequently, ChargePoint faces a challenge: it needs to grow quickly to cover these costs while continuing its investment in future technologies.
Evaluating ChargePoint as a High-Risk Investment
ChargePoint has made considerable strides in a short timeframe, but this stock is best suited for aggressive investors. The potential rewards are great, yet achieving a future dominated by EVs will require significant capital. ChargePoint’s current leadership in the charging sector does not guarantee future success, particularly if the company struggles to secure funding for ongoing R&D and operational expenses. The prospect of continued financial losses looms unless it can manage to become profitable.
Is Now the Right Time to Invest in ChargePoint?
Before considering an investment in ChargePoint, it is crucial to evaluate the following:
The Motley Fool Stock Advisor analyst team has pinpointed what they believe are the 10 best stocks to invest in right now—ChargePoint is notably absent from this list. The recommended stocks could yield significant returns in the near future.
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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
