22 Nov 5 Reasons to include VOLTA on your investment Watchlist!
Volta Inc. (NYSE: VLTA) entered into a business combination agreement with Tortoise Acquisition Corp II, a special purpose acquisition company and started trading on the NYSE on August 27,2021. The transaction brought in $400 million in gross proceeds, which will be utilised to accelerate Volta’s buildout of its charging network. We take a look at the Company’s prospects today.
Volta Inc. (NYSE: VLTA)
Market Cap: $1.78B; Current Share Price: 10.96 USD
Data by YCharts
Forging New Partnerships and Strengthening Existing Ones!
Volta Inc, a premier commerce-centric EV charging network, announced a partnership with CBL properties, to offer EV charging at select CBL properties, which will be offered as an additional amenity to tenants and customers at its properties. The new charging stations will be opened in locations such as Arbor Place in Atlanta, Georgia, Pearland Town Centre in Houston, Texas, and Laurel Park Place in Detroit, Michigan, and will be in addition to the existing 72 EV charging stations that are currently part of its properties.
Stephen D. Lebovitz, chief executive officer at CBL Properties, commented
“We’re thrilled to announce this new partnership with Volta to add EV charging stations at our properties. We have seen increased interest in EV charging stations as sales of electric vehicles have increased. This is an additional amenity that we can offer our tenants and customers and is another example of our focus on sustainability across our portfolio.”
The Company has also extended its partnership with Cinemark Theatres for providing EV charging stations at select movie theatre locations across the U.S. The first EV charging station was installed in 2018, a count which now stands at 100 charging stations at Cinemark locations, and has powered nearly 1.2 million electric miles for Cinemark customers.
Furthermore, the digital screens that form an integral part of the Volta charging stations are being used by Cinemark to advertise upcoming films, concessions and other onsite events.
Scott Mercer, Founder and CEO of Volta, opined,
“This is an opportunity to provide a meaningful charging experience to EV drivers at locations where they already plan to spend a substantial amount of time, which ultimately translates to customers understanding that charging infrastructure can be a convenient, accessible and reliable service that is part of everyday life.”
Volta has also launched the “Volta Media Network” a platform that offers advertisers an opportunity to engage customers with the help of high-impact digital screens that are part of its EV charging stations and are located at places where they shop, which can influence their behaviour before walking in to a retail establishment to make a purchase.
The Company claims that advertising with Volta Media has resulted in a 44% lift in awareness, a 66% lift in consideration, and a 59% increase in purchase intent as per a third-party brand study benchmark commissioned by Volta.
Volta has also entered into a partnership with Six Flags Entertainment Corporation, touted to be the world’s largest regional theme park to install EV charging at their parks across the United States. In addition, the Company has also entered into an agreement with Bloomberg Media for a one-of-its-kind “Air Pollution Scoreboard”, which will feature climate change-focused editorial content in all of Volta’s existing network.
The Company has launched a machine learning and artificial intelligence driven infrastructure planning tool, namely PredictEV, and has received a multi-year commitment from Southern Company, the second largest utility company in the United States, to deploy the product in its transportation electrification programs.
Impetus from the Infrastructure Bill
With the passing of the $1 trillion infrastructure bill, the whole EV charging industry is likely to benefit from measures such as EV tax credits that are proposed in the Build Back Better Act, which will now go to the senate and may face possible revisions. The law aims to create impetus for American-made, union-made clean vehicles and components such as batteries, materials and parts through new loans and tax credits.
The proposed incentives include a current $7,500 tax credit for plug-in electric vehicles, with an additional $500 for batteries made in the U.S. In addition, there is a $4,500 tax credit for a vehicle assembled domestically with union labor.
Individual taxpayers with adjusted gross incomes of $250,000 or $500,000 for joint filers will be eligible to receive the tax credit. The tax credit will be limited to vehicles priced below $55,000 and trucks and SUVs up to $80,000.
However, the $7.5 billion is only about 15% of the $50 billion needed to achieve the goal of a nationwide network of 500,000 chargers by 2030, as proposed by the Biden administration, according to consulting firm AlixPartners. The bill will provide an incentive for EV adoption and provide impetus for growth for ancillary industries as well.
A Multi-Billion Dollar Opportunity
The Global Electric Vehicle Charging Market is poised to reach USD 63.9 billion by 2025, growing at a CAGR of 32.6 percent, according to a report by Grand View Research, Inc. The growth of this industry is a result of the initiatives by governments around the world, in the form of tax rebates, grants, and subsidies for adoption of renewable and more environment friendly options for transportation. Unlike conventional vehicles which can only replenish their fuel at specific public locations, Electric vehicles can be charged at home or commercial charging stations.
Most recently the Joe Biden government accorded utmost priority to climate change and has made clear its commitment to improve fuel economy standards, encourage rebate programs for vehicle trade-ins, provide tax credits, stimulus programs and a $400 billion investment in clean energy.
However, the limitation of sufficient charging capacity to cover long distances discourages the use of these vehicles. There is an increased focus on research and development activities, especially in the passenger car sector, to improve infrastructure and supply equipment and establish EV chargers at easily accessible public places, to allow long distance travel as well. Range anxiety, which acts as the biggest impediment for the market at present, will soon be a thing of the past, with Companies racing to develop connectivity modules.
A report by McKinsey estimates that by 2025, there will be more than 350 EV models introduced into the market, with ranges of 200 miles. However, a lack of charging infrastructure could hamper the growth in the market. The report also highlights the fact that besides price and driving range, lack of access to charging stations is the third most serious barrier to EV. However there have been a gradual decline in prices and improvement in driving range and companies are making a concerted effort to provide the requisite charging infrastructure. Furthermore, the total energy demand for electric vehicles in China, the United States and European Union alone will reach 280 billion kilowatt-hours by 2030.
Image Source: Mckinsey
There has been an increasing interest in EV’s owing to environmental concerns, which has prompted leading automobile makers such as BMW, Daimler, Ford, and Volkswagen to announce an investment plan for deployment of 400 charging sites across Europe. China and Japan are at the forefront of adopting this technology owing to increased awareness and emerging technology.
Advertising Revenue
The Company’s charging stations also function as Digital OOH media with the ability to engage customers right before they enter a retail or business location. The charging station can deliver interactive content and enjoys premium placement in some of the busiest business locations. Volta boasts of 35 designated market areas in 23 states with more than 3600 digital ad screens garnering over 500 million impressions a month.
The Company is leveraging technology to offer cutting-edge features to advertisers such as dynamic weather that can match content to the local weather, Mobile content unlock that enables customer engagement directly with expanded offers or content and some other interesting features like Volta Wave, Motion Sense and Vehicle Sense.
As per its latest earnings report, the Company derived 87% of its total revenue of $8.5 million from its “behaviour and commerce” segment. Revenue for the third quarter 2021 stood at $8.5 million and grew by 77 percent YoY compared to $4.8 million in the prior-year period. The revenue from Behavior and Commerce rose to $7.4 million from $2.2 million owing to increased media campaigns with national brands.
A Promising Future Outlook
The Company is upbeat about its 2021 outlook and expects the revenues for the full year ending December 31, 2021, to be in the range of $32 million to $36 million, while total signings to be in the range of 600 sites to 700 sites. In addition, Volta expects the Total operational stalls in the range of 2,300 to 2,500, with 1,300 plus stalls in its construction queue, as per the Company’s third quarter 2021 financial results.
Conclusion
In an extremely competitive EV Charging space, the Company is set out to make a difference with its three-pronged focus on network growth, EV adoption and brand awareness. The Company has built strategic partnerships with entities ranging from stores, REITS, OEM’s, national brands and government organizations. The favourable environment aimed at improving EV adoption, climate change awareness and push for decarbonization, the growth of digital media and big data will help the Company achieve its objective of becoming a major player in the EV charging market.
Volta is quickly working on expanding its network and had added 168 charging stalls in Q3,2021, taking the number of its total stations to 2,137 stalls as of Sept. 30. The Company is projecting 2,300 and 2,500 more stalls installed by the end of the year, with over 1300 more under construction.
The Company has crossed a milestone of delivering 100 million electric miles to EV drivers in the U.S and is poised to benefit from the infrastructure bill and the Build Back Better spending plan. Volta has built a strong advertising opportunity through its strategically placed EV stations and is all set to leverage it to create multiple revenue streams in the coming days.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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References
https://voltacharging.com/press/volta-formally-launches-volta-media-network/
https://investors.voltacharging.com/events-and-presentations/default.aspx
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