* Despite renewed pressure on ChargePoint shares, data points to the EV charging pain point
* EV adoption passes the 5% tipping point in more than 20 countries
* EV adoption is faster outside of the US, where ChargePoint collects 25% of its revenue
* Hertz to more than double its EV exposure by the end of 2024
As you know, we are always on the prowl for confirming data points relating to our portfolio holdings. While we enjoy those for our profitable positions, such as United Rentals (URI) , Axon (AXON) , and Costco (COST) among others, the ones for the positions that are underwater are the ones we find especially insightful and helpful. For example, for our shares of Clear Secure (YOU) we continue to check TSA travel checkpoint data, which continues to show US travelers are hitting the airport, driving congestion.
This morning we have two positive data points for Action Alerts PLUS holding ChargePoint (CHPT) , which have been under renewed pressure along with other smaller cap stocks. The first is from Bloomberg Green, which tracks developments regarding green technologies and climate change. Per the collected data, 24 countries now have EVs comprising more than 5% of their new auto sales.
As Bloomberg Green explains, "In the case of fully electric vehicles, 5% seems to be the inflection point. The time it takes to get to that level varies widely by country, but once the universal challenges of car costs, charger availability and driver skepticism are solved for the few, the masses soon follow."
Here's the thing, here in the US, EV sales rose 42% in the June quarter accounting for ~7% of new auto sales, but the rate of growth has been far higher in markets outside the US. This is where we remind you that ~25% of ChargePoint's revenue stream is outside the US. We would also share the data shows EV sales accelerating in India, and it is expected to pass the 5% mark in relatively short order.
The second data point was the news this morning from EV company XPeng (XPEV) and its new partnership with DiDi Global (DIDIY) that will leverage its position in China's shared mobility market. While this doesn't speak directly to ChargePoint, it confirms the adoption of EVs is poised to continue and reminds us about markets outside of individual auto sales.
We would put this announcement in the same basket as the one from Hertz Global (HTZ) , which plans to have 25% of its 500,000-vehicle fleet electric by the end of 2024 vs. 10% as of mid-May.
We have gotten questions about knowing when to "throw in the towel" with CHPT shares. As long as we continue to collect data points like those above, we will remain patient with the position even if it means waiting for the market to catch up to the EV charging opportunity. For newer members, the current share price and the trade off in downside risk vs. the Wall Street consensus price target of $15, which matches our own, is favorable.