EV charging stocks plunge on Tesla/GM partnership; BofA says EVgo most impacted

EV charging stocks, including ChargePoint Holdings, Inc. (NYSE:) and EVgo (NASDAQ:), are both trading down in pre-open trading Friday after General Motors (NYSE:) and Tesla (NASDAQ:) announced a deal to partner on EV charging.

This way, GM will follow rival Ford Motor (NYSE:) in partnering with Tesla to use the latter’s EV charging network. Both Ford and GM will install a charging port used by Tesla known as NACS (North American Charging Standard).

While GM and Tesla shares are both up in pre-market Friday, shares in CHPT and EVGO dropped 4.9% and 8.3%, respectively.

BofA analysts say the news is “somewhat cautious” EVgo and “relatively neutral” for CHPT.

“While GM expressly identified ongoing commitment to EVgo’s “eXtend” business in the release we expect investors will be uneasy about competition as it now has another major partner. In a more direct sense, given it is the site host, EVgo will now compete more directly for utilization against TSLA’s highly reliable network serving a larger piece of the future EV fleet,” they said.

On the other hand, CHPT doesn’t “wear direct risk on utilization” while its DC Fast network is largely fleet focused, the analysts highlight.

“CHPT continues to de-emphasize the long-term market opportunity of DC Fast which is really the focal point of these partnerships. With this context, we reiterate our Buy rating on CHPT,” they concluded.