Volta: Another EV Charging Network With Too Many Questions
- Volta goes public via closing the business combination with the Tortoise Acquisition Corp. II SPAC.
- The company operates an EV charging station network in a competitive space leading to 24 million SPAC shares being redeemed.
- The stock appears to have an EV of only $1.3 billion, but too many questions exist around charging station network moats to buy Volta.
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The SPAC craze has left several sectors crowded with newly public companies including the EV charging station space. Tortoise Acquisition Corp. II (SNPR) just got shareholders to approve their business combination with Volta (NYSE:VLTA) to enter the space. My investment thesis remains negative on the space due to material inefficiencies in the business models.
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Update - Sept. 22
The $15 PT says a lot considering the recent bounce in Volta.
- Needham starts off coverage on Volta Inc. (NYSE:VLTA) with a Buy rating. Volta is called a differentiated EV charging provider focused on locations with high visibility and traffic, which leads to high utilization and charging revenue. The battery charging upstart is also noted to be generating diverse and predominantly recurring revenue streams through digital advertising, software tools and data analytics.
- Analyst Vikram Bagri: "We believe this differentiated strategy allows VLTA to offer a compelling value proposition to everyone involved in the value chain, thus creating a significantly larger target TAM than those of its peers. While others are looking to replicate this model, we find that VLTA's existing relationships, large portfolio of MSAs, strong BS and early mover advantage in content delivery at its stations create a moat around the business in a highly fragmented and competitive market."
- Needham assigns a price target of $15 on VLTA vs. the post-SPAC range of $8.42 to $18.33. The research firm is one of the first with a rating out on Volta.
Update - Sept. 7
Volta rallies on a Six Flags deal, but not a lot of charging will take place at a theme park.
- Volta (NYSE:VLTA) is partnering with Six Flags Entertainment Corporation (NYSE:SIX) to make EV charging accessible to its guests at their parks across the United States.
- The first charging stations will be installed at Six Flags America, just outside of Washington, D.C., with more parks to follow.
- Six Flags is the first theme park company to have Volta charging stations available to its guests.