A super-charged bet on electric car boom

ELECTRIC cars have been plagued by a chicken-or-egg situation. no one wants to buy an electric car unless there is a convenient charging point nearby – but no company will invest in car charging points that aren’t going to be used.

This could be coming to an end. Last month, oil supermajor BP announced a £130m deal to buy electric car-charging business Chargemaster.

And this week the Government said it was considering forcing all new houses in suburban areas to be built with a charging point included.

Paul Teuten, of corporate advisory firm Duff & Phelps, said: ‘Investment-wise, this is a good space to be in right now. A lack of charging points is currently one of the main things that’s hampering growth for the wider electric car industry.’

Clearly those businesses creating the charge-point technology will be in their element – and many will undoubtedly find themselves in the money. But with none listed on the public markets, the average investor might find it hard to grab their share of the pie.

For the very wealthy, there are options.

Syndicate Room, founded and led by experienced professional investors, is a business that matches private companies with individuals who want to put their money into their deals.

The firm raised £1.5m last year for Engenie, a rapidcharging business which has a network of outlets across the UK’s on-street parking slots and prime-car park locations.

Part of the reason behind the investment, according to Syndicate Room’s chief executive Goncalo de Vasconcelos, was that Engenie’s business model had strong partnerships with big names.

Since several other nascent charging companies have not yet got their business model fine-tuned, and may not yet be making a profit, he said there was little surprise that there are no listed charging firms. Jeremy Littman, Engenie’s founder, said many of the young charging firms need more time to establish their manufacturing networks before they could think about a listing.

But BP’s acquisition of Chargemaster should act as a catalyst.

Investors could simply invest in oil businesses such as BP and Shell to gain exposure to car-charging technology. Both are slowly infiltrating the electric power sector out of a need to survive, if nothing else.

Richard Stone, chief executive of broker The Share Centre, said: ‘BP has the infrastructure of service stations that could provide charging points, and has the resources to buy into this electric market, as it has done recently.’

But while investors are waiting for a charge-point business to hit the stock market, there are other options.

ComPonEnTS are one. Electric cars, their batteries and charging equipment need an abundance of elements from lithium to copper.

miner BHP Billiton recently announced it was putting more focus on copper, partly because of its importance to electric cars. And Craig Bonthron, who runs the Global Sustainable Equity fund at investment manager Kames, has invested in US lithium producer Albemarle.

Looking to the manufacturing process could be another key. Engineer GKn is increasing its research spending on electric-drive technologies, while German firm Aumann has developed technology that speeds up the motormaking process.

Though investing directly in a charging firm might not be the easiest task, the rise of the charging point should certainly spark some ideas.