ChargePoint Holdings Inc., a well-known electric-vehicle (EV) charging company, faced a setback as its shares experienced a sharp decline in early trading following the release of disappointing quarterly revenue figures. The company reported a revenue drop to a range between $108 million and $113 million for the recently concluded quarter, falling short of both its previous year’s performance and its guidance, which had projected a minimum of $150 million in revenue.
In response to the challenging financial results, ChargePoint announced a leadership shake-up by replacing two of its top executives. Pasquale Romano, who had held the position of chief executive officer since 2011, and Chief Financial Officer Rex Jackson were both replaced, with their exits becoming effective immediately.
The unexpected changes and financial challenges faced by ChargePoint reflect broader difficulties within the EV charging industry. Gabe Daoud, an equity analyst at TD Cowen, expressed surprise at the developments, noting that the EV charging space has encountered substantial headwinds throughout the year. Daoud acknowledged that despite ChargePoint’s leadership position in the industry, it has not been immune to the challenges faced by other hardware and network providers.
ChargePoint’s shares, already having lost more than two thirds of their value over the course of the year, plummeted by as much as 34% before regular trading began on Friday. The company’s market capitalization, once reaching a peak of $11.2 billion in June 2021, is now on track to fall below $1 billion.
One notable factor contributing to the struggles of EV charging companies, including ChargePoint, is the intense competition posed by Tesla Inc. Tesla’s extensive network of charging plugs, coupled with a different connector design, has given the company a competitive edge. The superior charging experience offered by Tesla has led major automakers to adopt its connector as the new standard for North America, leaving other charging companies grappling with the challenge of differentiation.
ChargePoint initially went public in 2021 through a merger with a special purpose acquisition company, joining a wave of EV-related deals that included companies like Lordstown Motors Corp. and Lucid Group Inc. However, investor sentiment has soured on many of these companies, particularly those perceived as risky early-stage ventures burning through substantial amounts of cash.
To address the leadership vacuum created by the departures of Romano and Jackson, ChargePoint promoted Rick Wilmer, who had assumed the role of chief operating officer in July of the previous year, to the position of CEO. Romano will stay on as an adviser to the company. In addition, Mansi Khetani, the senior vice president of financial planning and analysis, will serve as the interim replacement for CFO Rex Jackson. The changes signal an attempt by ChargePoint to navigate a challenging landscape and regain investor confidence in the increasingly competitive EV charging sector.