ChargePoint today became the world’s first publicly traded EV charging company, CEO Pasquale Romano marking the occasion by ringing the opening bell on the New York Stock Exchange.
The 13-year-old ChargePoint was the latest to take advantage of a so-called reverse merger, or SPAC deal, joining forces with Switchback Energy Acquisition Corp. to begin trading under the ticker symbol CHPT.
The deal generated about $480 million for the company, which is expected to help fund a major expansion program. That should help the company add thousands of public EV chargers in key markets like the U.S. and Europe – while accelerating charger sales to private homeowners and fleet operators.
ChargePoint rides positive wave for EVs
Special Purpose Acquisition Company deals have surged to the forefront lately, helping buoy a number of promising companies in the EV space. Combined with the flood of new battery-electric products coming to market in the next year or two, Romano told TheDetroitBureau.com he’s more confident than ever that plug-based vehicles are set to become part of the mainstream.
TheDetroitBureau.com spoke with Romano, who joined ChargePoint in 2011, about a variety of topics – including the risks and benefits of going public, the growth of the EV market and what the recent weather-related blackouts in Texas mean for renewable energy.
TDB: Getting listed on the stock exchange is big news, and not just for ChargePoint, isn’t it?
Romano: It’s huge news, yeah. We’re sort of like an index fund for electrification because it doesn’t matter what battery tech or automaker wins or loses. It all drives demand for the charging infrastructure.
TDB: What specifically does this do for ChargePoint?
Romano: We’ve been pressure tested and raised over $650 million as a private company. Now that we’re public we have more money on the balance sheet than ever. We get the wherewithal to support our customers … and scale with them. We were already scaling up while private (but) now have access to public capital market. But going public is not a panacea. You don’t want to be public prematurely. If you do you may have (less) access to capital.”
Growing the company
TDB: Up til now, demand for plug-in vehicles has been low, but we’re starting to see some real growth. Is there a point where things really take off?
Romano: The number appears to be 5% (market share). At that point, consumers start to see EVs and say, “Okay, this is safe enough for me to do this. They go from cautious skepticism to accepting. That has to be coupled with one other thing: enough makes and models to cover all the price points and lifestyle choices. Everyone thinks its about have a charging infrastructure. I’m like, it’s all about finding a car I like before I even worry about whether the charging infrastructure is available or not.
TDB: Since you bring up the infrastructure, what should we make of the disaster in Texas where the grid virtually collapsed and some people were without power for days?
Romano: If you had 100% EVs there would have been a lot of flexibility because of (reverse charging, where vehicles can put energy back into the grid). Twenty years from now, we could keep a lot of the lights on, even if they don’t do better weatherization.
But they have recognize there is climate change and 100-year events are happening more often. They’re like five-year events. And (Texas) has to weatherize their grid and interconnect with the broader grid.
TDB: It seems like this is a good time to be looking at broader questions of where our energy comes from and how it is distributed over the grid.
Romano: Yes, I agree. Food for thought: what is the timeframe we have to do this? Right now, 2% of (U.S.) cars are electrified. If that jumps to 5%, I’ve got massive business growth. The natural cycle is 15 million or so car sold in the U.S. each year. And, with 250 million cars on the road, it will take over 16 years to turn over the entire fleet, even if all new cars were electric. So, it’s going to be slow on the front end, faster on the back end. It could take 20 to 30 years, which is plenty of time to reorganize … the grid.
Readying an already taxed infrastructure
TDB: So, we don’t need to make change now?
Romano: Where I’m going with this is that it’s game over for oil because electrification will pass internal combustion in the next four years in terms of being the cheapest way to buy a car, propel it and maintain it. You can’t stop the electrification of transportation. And the dirty little secret is that utilities are enabled to base their rates on the cash (they use) for wires, transformers, concrete and generators. You’ll see rates creep up a little bit to fund the infrastructure. Then the rates will get forced down by the regulators.
TDB: Let’s talk about what will drive the EV market. Most folks are watching the retail market but there seems to be a huge boom in demand for electric delivery trucks, like the 100,000 Amazon ordered from Rivian.
Romano: If I were to have started up a vehicle company I would start by developing fleet pickups. Pickups make up half the fleet vehicles in the U.S. That (market) is going to grow faster because corporate buyers are unemotional and don’t care about fashion items. Their vehicles have higher utilization, so it’s easier to pencil (the savings on) little maintenance, much lower energy costs. They’ll tolerate sticker prices being a bit higher.
TDB: You seemed to downplay concerns about the charging infrastructure before, but I can say it’s one reason I might wait a few years to buy an EV because it would make it more difficult to travel to some rural places up in the northern part of the state.
Romano: No, I understand. I do understand. Coming soon there’ll be a lot of corridor buildouts (for routes like New York to California). Once you get a backbone up you can grow around the hotspots organically. One thing that is really heartening is that a lot of stores, food concessions and other businesses along the long-haul routes will (put in chargers) to try to attract drivers off the highways on long trips. If they can take 15 minutes (drivers) will stop and have a coffee.
If (the Biden administration) takes our advice, they’ll provide subsidies for businesses that naturally deal with long-haul traffic. People aren’t going to change where they go for vacation because they drive an electric vehicle. What we’ve learned from 100 years of mechanized transportation burning fossil fuels is where to stick waypoints to electrify. We have to have less subsidies for (chargers) in high utilization areas and more subsidies for those in low utilization ones.
TDB: And how much will it cost? We’ve all seen astronomical projections.
Romano: This is not like $200 billion of infrastructure investment to get started it A few billion dollars and it gets us started.