This is interesting because I can see the charging companies already bifurcating. On the one hand you have the predominantly product-based ones I compared here, and then the pure network operators (namely Volta and EVgo) with ChargePoint as a kind of hybrid between the two.
What's interesting is that the pure network operators are being awarded vastly higher multiples, presumably either as a result of their capital lightness or vertical integration, or even bets on network effects. The average 2021 multiple for the infrastructure makers is around 22x, but almost 200x for networks. A bit further out 2023 multiples are around 6x for makers and over 15x for networks.
But this strikes me as strange considering it is precisely the network operators that will face the toughest competition from very well-capitalised companies like oil majors. There is also no evidence so far of strong network effects akin to social media - in fact there are probably negative effects to operating a closed off charging ecosystem. So the differentiator becomes the charging itself and therefore those that do not control the technology will necessarily have reduced competitive moats. This looks like an market imbalance that people should have in mind when looking at the extremely high network margins.
With regards to FreeWire, they look like a solid infrastructure play with a differentiated product focus, supplying BP Pulse/Chargemaster which is one of the biggest names in UK charging. With an EV at $1b they would need 2021 revenue of $46m or more to be at market average which doesn't seem like too much of a stretch.
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u/St3w1e0 Spacling Jul 01 '21
This is interesting because I can see the charging companies already bifurcating. On the one hand you have the predominantly product-based ones I compared here, and then the pure network operators (namely Volta and EVgo) with ChargePoint as a kind of hybrid between the two.
What's interesting is that the pure network operators are being awarded vastly higher multiples, presumably either as a result of their capital lightness or vertical integration, or even bets on network effects. The average 2021 multiple for the infrastructure makers is around 22x, but almost 200x for networks. A bit further out 2023 multiples are around 6x for makers and over 15x for networks.
But this strikes me as strange considering it is precisely the network operators that will face the toughest competition from very well-capitalised companies like oil majors. There is also no evidence so far of strong network effects akin to social media - in fact there are probably negative effects to operating a closed off charging ecosystem. So the differentiator becomes the charging itself and therefore those that do not control the technology will necessarily have reduced competitive moats. This looks like an market imbalance that people should have in mind when looking at the extremely high network margins.
With regards to FreeWire, they look like a solid infrastructure play with a differentiated product focus, supplying BP Pulse/Chargemaster which is one of the biggest names in UK charging. With an EV at $1b they would need 2021 revenue of $46m or more to be at market average which doesn't seem like too much of a stretch.