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Under the Spotlight Wall St: Blink Charging Co (BLNK)

As combustion engines slowly become museum pieces, petrol stations will have to adapt and turn into electric charging stations. One of the key players driving this transition is an American company called Blink Charging Co. Let’s take it Under the Spotlight.

Achilles' Heel

If you’ve ever looked into buying an electric vehicle, you probably encountered some of the industry’s Achilles’ heels: low driving autonomy, long recharging times and lack of charging spots. Working to fix the two latter pitfalls is Blink Charging Co, an American company reshaping petrol stations (or gas stations, as they’d say) worldwide.

Offering different types of charging products, both for commercial and personal use, Blink Charging has over 53,000 chargers deployed in 21 different countries across the globe, totalling over 423,000 customers. And their chargers are compatible with the infrastructure of another 150 countries, allowing for a somewhat easy expansion.

The rise of EVs has propelled a lot of competition in the industry, be it for car manufacturers, battery makers or charging equipment producers. Blink Charging found a way to differentiate itself in an old-fashioned manner: vertical integration. In an era when every company seems to try to outsource their production, Blink Charging has in-house hardware design and manufacturing; it owns, manages and operates some of its charging facilities, while providing a network for their users and retailers that allows site hosts to download reports, apply flexible pricing, and monitor real-time charge events.

With a little help from my friends

Judging from the partnerships that Blink landed, their end-to-end business model seems to be doing OK: the company has partnered with Ford, GM, Audi and Subaru to provide OEMs,  and with McDonald’s, Marriott and Four Seasons to provide charging facilities on their sites. However, the most important partnership struck by Blink might not be with other private companies, but with the U.S. government.

The Inflation Reduction Act passed by the U.S. Congress on 16 August 2022 will grant over US$7.5b to invest in electric vehicles infrastructure, aiming to deploy over 500,000 EV charging stations in the country until 2030. Blink was awarded a grant of US$32m of the bill to finance its operations. The sum might seem low considering the size of the bill, but at roughly 5% of the company’s market cap, it’s nothing to sneeze at.

Powering Up

2022 will be marked in Blink’s history as the year it went shopping. The company acquired EB Charging, UK’s biggest player in the EV charging industry, and SemaConnect, a leading player in the U.S. market that added over 10,000 charging stations to Blink’s network. Acquisitions and geographical diversification are key if Blink wishes to be the biggest company in what could be an US$8b revenue market by 2027.

Blink’s revenue has been growing steadily: from US$4.3m in Q2 2021 to US$11.5m in Q2 2022. For this year’s third quarter, revenue is expected to reach the US$15.3m range, but the company has yet to turn a profit. Despite revenue numbers skyrocketing, in Q2 2022 the company amassed net losses of over US$22m. So if Blink is to be the future of petrol stations, it might need to either scale up or tighten their budget faster than a Tesla on Ludicrous Mode.