Tesla's Charging Empire Faces Headwinds As EV Market Stumbles

Tesla Inc's TSLA once-dominant grip on the EV charging landscape is slipping and JPMorgan's Bill Peterson sees trouble ahead.

Though the U.S. public charging network expanded 24% year-over-year in February, Tesla's Supercharger market share dipped to 55.9%, below its one-year average of 57.9%.

Meanwhile, competitors like EVgo Inc EVGO are clawing back share, signaling a shift in the fast-charging landscape.

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Charging Growth Steadies, But Sentiment Sours

Despite stable infrastructure growth, EV charging stocks have taken a beating, sinking 16% in the past month—far worse than the S&P 500's 7% slide.

The culprit? Uncertainty over EV incentives, the Inflation Reduction Act's future and potential Department of Energy loan pullbacks.

With recession fears looming, Peterson warns of further downside risk for charging stocks already struggling to regain investor confidence.

Tesla's Sales Slip, Inventory Climbs

U.S. EV and plug-in hybrid sales grew just 3.6% year-over-year in February, with penetration rates flat month-over-month.

Tesla, however, stands out for the wrong reasons. While most EV makers saw declining inventory, Tesla's stockpile grew, with JPMorgan's autos team linking the sales dip to CEO Elon Musk's recent political controversies.

Adding to the pressure, Tesla's incentives jumped 20% month-over-month, raising concerns about demand softness.

Winners & Losers In The Charging Race

EVgo is emerging as a rare bright spot, slowly regaining market share, now at 7.4%, surpassing its one-year average. But its stock has been pummeled, down 61% in three months, as investors fret over potential DOE loan clawbacks.

JPMorgan still sees meaningful upside for EVgo given its improving fundamentals. ChargePoint Holdings Inc CHPT, on the other hand, remains in a tough spot, with demand challenges persisting and policy uncertainty clouding its path to profitability.

The Road Ahead: More Uncertainty, More Volatility

With EV adoption growth slowing and economic concerns mounting, Peterson urges caution.

While Tesla remains a key player, its slipping Supercharger dominance and rising inventory suggest cracks in its EV empire.

Investors will be watching closely as the battle for charging supremacy heats up – and as Tesla tries to recharge its momentum.

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