Source: BMW Group, General Motors, Honda, Hyundai, Kia, Mercedes-Benz Group, Stellantis.
  • Seven global automakers will create a new North American EV charging network that will stiffen competition for Canadian ventures in the space
  • The network will house at least 30,000 high-powered charging stations spread across metropolitan areas and major highways
  • Canadian participants in the EV charging space, such as Datametrex and Hypercharge, may find growth opportunities limited to specialized sectors over the next few years as the continental network unfolds

Seven global automakers will create a new North American EV charging network that will stiffen competition for Canadian ventures in the space.

The automakers – BMW Group, General Motors, Honda, Hyundai, Kia, Mercedes-Benz and Stellantis – will establish a joint venture for the network later this year, with the first charging stations slated to open in the United States in summer 2024, followed by Canada soon after.

The as-of-yet unnamed network will house at least 30,000 high-powered charging stations spread across metropolitan areas and major highways. Station specs break down as follows:

The automakers also plan to equip their electric vehicle charging network with each of their in-vehicle and in-app offerings, covering everything from route planning to payments to energy management.

Further details, including the network’s name, will be released later this year.

A thorn in the side of Canadian EV charging station providers

With seven leading global automakers joining forces in EV charging, pooling their established supply chains, billions in revenue, as well as industry and government relationships, it appears that young Canadian entrants into the space are at risk of falling behind.

The stark contrast between their respective resources is at the root of the problem.

The automakers’ vast enterprises allow them to plan to build charging stations “wherever people may choose to live, work and travel,” according to a press release about the joint venture.

Conversely, leading small and micro-cap companies building Canadian EV charging networks simply do not have the size or track record for such high aspirations.

Datametrex Electric Vehicle Solutions

Datametrex Electric Vehicle Solutions (EVS), a subsidiary of Datametrex (TSXV:DM) a diversified technology company, recently announced the expansion of its EV charging infrastructure into Toronto.

Installation and permitting are underway at an initial location, allowing the subsidiary to take advantage of Toronto’s EV Station Fund, which refunds up to 50 per cent of installation costs for up to 20 EV charging stations (maximum C$5,000 per Level 2 charger, C$15,000 per DC fast charger and C$50,000 per DC faster+ charger).

While the refunds will stabilize cash flows toward DM EVS’s long-term growth, the subsidiary may find itself forced to settle for smaller niche contracts to achieve it, given how the seven automakers’ large scale requires commensurate ventures to move the needle on profitability.

DM EVS’s Toronto expansion coincides with new strides in Vancouver, where numerous charging locations are in the final stages of permitting amid a growing sales pipeline. Its recent five-year deal with Holiday Inn Vancouver is another example of the hyper-local contracts new Canadian EV charging companies may find most accretive to shareholder value.

Datametrex (TSXV:DM) is down by 45.83 per cent over the past year but has gained 550 per cent since inception. The C$25 million market cap company’s ventures in AI, EVs, healthcare and cybersecurity have generated considerable buzz among TMH readers, who see a bright future for the stock in spite of intermittent profitability.

Join the discussion: Find out what everybody’s saying about this stock on the Datametrex Bullboard, and check out the rest of Stockhouse’s stock forums and message boards.

Hypercharge Networks

We encounter a similar situation with Hypercharge Networks (NEO:HC), a smart EV charging solution provider for multi-unit residential and commercial buildings, fleet operations and other high-growth sectors.

The company’s focus on seamless and simple solutions within specific sectors has allowed it to steadily accumulate market share, as evidenced by recent contracts.

These include a deal with ParkCo to supply 58 Level 2 charging stations to The Gaslight Condominiums development in Cambridge, Ontario. Installation is slated for completion by Q3 2023, marking the company’s fourth project with ParkCo since their partnership agreement in December 2022.

This deal was followed by a collaboration with Brilliant Lighting Solutions to install 135 Level 2 charging stations across 16 multi-unit residential buildings in Vancouver, Burnaby, New Westminster, Port Coquitlam, Surrey and Langley, British Columbia. Installation is slated for completion by the end of 2024.

Other Hypercharge partners, such as Hyatt Regency, Sheraton and TargetPark, also further our thesis about smaller EV charging players having an advantage when it comes to serving the needs of specialized market segments, whereas larger players, and their more substantial shareholder bases, could not justify the limited benefit of selling 10s or 100s of chargers at a time.

The takeaway here is for potential investors to be wary of burgeoning EV charging station providers trying to compete with household names and biting off more than they can chew. With North American charging installations expected to grow 932 per cent by 2027, according to Markets and Markets, carefully allocated growth capital seems like the only path forward for new ventures to survive over the long term.

Hypercharge Networks stock (NEO:HC) is down by 86.25 per cent since its all-time-high in April 2023, suggesting an undervaluation of the C$37 million market cap company’s 23 partners, almost 1,500 ports sold, and the numerous tailwinds supporting the EV industry as a whole.

Join the discussion: Find out what everybody’s saying about this stock on the Hypercharge Networks Bullboard, and check out the rest of Stockhouse’s stock forums and message boards.

The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.


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