Should You Buy ChargePoint While It's Trading Below $1?

Industry Overview - The electric vehicle (EV) industry is currently facing significant challenges, including tariffs, rising EV prices, and a negative political environment, which are impacting automakers and the broader EV ecosystem [1] - EV sales in the U.S. accounted for 8.1% of total vehicle sales last year, a slight increase from 7.8% in 2023, indicating slow adoption rates due to high prices [4] ChargePoint Company Analysis - ChargePoint's share price has decreased by 60% over the past year, now trading below $1, raising concerns among investors about the stock's potential [2] - The average transaction cost for a new electric vehicle was$59,200 in April, a nearly 4% increase from the previous year, making EVs less accessible to many buyers [4] - ChargePoint's sales fell by 18% in fiscal 2025 to $417 million, with projections for first-quarter 2026 sales at$100 million, reflecting a nearly 7% decline from the same quarter last year [9] - The company reported a non-GAAP net loss of approximately $159 million last year, although this was an improvement from a loss of about$297 million in 2024 [10] - ChargePoint's largest revenue segment, networked charging system sales, decreased by 35%, while subscription sales increased by 20% [10] External Challenges - Tariffs on automotive imports are negatively affecting U.S.-based EV manufacturers, leading to increased production costs [6] - Political uncertainty surrounding tariffs has caused major automakers like Ford, Stellantis, and General Motors to withdraw their 2025 guidance [7] - A recent bill passed by Republicans in the House aims to roll back tax credit incentives for EV purchases, which could further hinder EV adoption [8] Investment Outlook - Despite ChargePoint's low price-to-sales multiple of 0.75, the current market conditions and company-specific challenges suggest that it may not be a good investment opportunity [11] - The company and the broader EV industry are expected to continue facing serious headwinds that could further slow growth, making it difficult for ChargePoint to achieve market-beating returns in the near future [12]