CarCharging 2015 Results: $2 Lost For Every $1 Earned

AUG 14 2016 BY MARK KANE 31

charging...

charging…

CarCharging surprised us a little bit with its 10-K report for 2015, that not only showed a lessening of losses, but that was also filed on time…that is about as much positivity as we can muster however.

One of the largest charging station operators in the U.S. is still far from profitability, but revenues did increase in 2015 to $3,957,795 from $2,791,644 (up 41.8%), while net loss fell to $8,244,924 from $23,229,319 (~65% less) – good numbers if you deal only in percentages

Still, losing more than $8 million off of $4 million of revenue isn’t good business at all, but who knows whether more improvements are possible in the future. We still have fingers crossed for a company somewhere to show that it is possible to turn a profit in the EV charging network business.

CarCharging states that it has about 11,600 charging stations installed, and the number of full-time and part-time employees stands at 30 and 7 respectively (as of July 27).

“We currently have approximately 11,600 charging stations deployed of which 4,880 are Level 2 public charging units, 130 DC Fast Charging EV chargers and 2,800 residential charging units in service on the Blink Network. Additionally, we currently have approximately 370 Level 2 charging units on other networks and there are also approximately an additional 3,400 non-networked, residential Blink EV charging stations.”

There is not much we could add to the above CarCharging statement, which is struggling with market realities, although we should note that 29% of revenues comes from government grants.

Also check out the unbridled optimism (/sarc) contained in the below statement:

“We have a history of significant losses, and if we do not achieve and sustain profitability, our financial condition could suffer.

We have experienced significant net losses, and we expect to continue to incur losses for the foreseeable future. We incurred net losses of $8.2 million and $23.2 million the years ended December 31, 2015 and 2014, respectively, and as of December 31, 2015 our accumulated deficit was $73.4 million. Our prior losses, combined with expected future losses, have had and will continue to have, for the foreseeable future, an adverse effect on our stockholders’ equity and working capital. If our revenue grows more slowly than we anticipate, or if our operating expenses are higher than we expect, we may not be able to achieve profitability and our financial condition could suffer. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.”

“Revenue Growth

Revenues for fiscal 2015 and 2014, were $3,957,795 and $2,791,644, respectively, representing year over year growth of approximately 42% for fiscal 2015. Revenues derived from network and transaction fees earned from our hosts increased 886%, charging service revenues increased 36%, equipment sales increased 42%, and grant revenues increased 23%.

Our demonstrated growth reflects, we believe, our ability to manage through flat EV market conditions and improve in our key areas, including EV charging equipment sales, EV charging fees, and cost reductions in the Company’s general and administrative expenses, including consolidating redundant facilities, restructuring and optimizing the call center, as well as optimizing other overhead and personnel costs. As a result of selling Blink EV charging equipment to new customers, we were also able to reduce existing first generation equipment inventory and provide future recurring service fees. Additionally, we secured commitments from new strategic customers for the next generation of commercial EV charging stations ahead of product launch and expanded relationships with marquee customers and strategic EV charging station hosts to retain market share and improve overall customer satisfaction.

We believe that the continued short-term and long-term growth of the Company is dependent on various factors, including overall EV adoption, infrastructure incentives, grant requirements, and expanding the Company’s sales channels. We believe that EV adoption is still dependent on mass scale EV charging infrastructure, which requires capital and support from the auto manufacturers to meet national and global target adoption rates. We do believe that there continues to be market demand for charging infrastructure to support the accelerated growth of EVs in future years and that there are significant growth opportunities. However, there are also inherent risks and challenges.

In order to prepare for future growth, the Company must continue to expand its charging equipment offerings and its cloud-based charging network, and control its operating and administrative costs. If these challenges and factors are not managed effectively, then our business and its operating results could be adversely affected.”

CarCharging Financial Results – For 2015

CarCharging Financial Results – For 2015

Categories: Charging

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31 Comments on "CarCharging 2015 Results: $2 Lost For Every $1 Earned"

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Compensation (payroll?) $8,200,246. 30 full time and 7 part time employees. So that averages $221,628 per employee. Not hard to see why there are losing money. I make between $30-$40k a year and have managed to buy a Leaf and a Zero and also a deposit on a Model 3 And i have my own home. What does someone do that deserves a quarter million a year? Sounds like too many chiefs and no indians to me. Are they hiring? I’ll work for $50k a year and probably get more done than anyone else there.

I am not an accountant either but could payroll be under “general and admistrative expensives”??
Where does maintance, loans for equipment, land leases fall under??

Yeah, it blows me away that upper management can continue to collect millions while the company they are managing is loosing millions. Basically a bunch of crooks. I once owned shares in a company that the management drove into bankruptcy and they sold off all the equipment before closing the doors. The CEO collected a bonus of $500k “for doing a good job of closing out the business”.

They will say that they need smart people to run the company, and smart people are expensive. When you then ask about the losses, they will blame the taxes they have to pay… yeah. You will then get frustrated and stop asking.

Yep, they’ve got two problems:
Incompetent, overpaid execs and unreliable hardware.

Fixing both problems would go a long ways towards sustainability.

Their revenues have no place to go but up and up…
A start up technology for cars whose production numbers will ramp up signifaicantly in the next couple of years…

Someone is making money……

I would imagine the problem is simply lack of customers. But if Tesla’s model-III helps us move into an era where EV’s suddenly become popular and cool, then there will be plenty of customers to use the stations. I also wonder about something else. They have stations all over the place. But I wonder if there are any specific pockets, particularly in areas where EVs are very popular, if they can say that those particular stations are profitable. If so, then that should be an indicator for the future once more EVs are on the roads.

does 200-300mile range EVs help or hinder DC fast charging?

if DC fast charges are only needed for away from home state travel, then revenue will be stifled.

I think it is the opposite. DC-Fast needs to be away from home to succeed, and that 200-300 mile range cars won’t be charging up 200-300 miles, when they visit them.

DC-Fast is for topping up, on those times you’re going >250+ miles. At 300, you’d only need ~50, etc. Nobody likes waiting.

I was at my first Greenlots charger, yesterday. A 25kw unit. It croaked after 25 miles. So, 0 for 1 (Signet) Greenlots, and 0 for 1 Nissan units, for me. I believe shoddy reliability may stop other long-range BEV sales in their tracks. Another place Tesla were very smart.

Tesla
-More than one, or two chargers per station
-2-3 times the power and charge speed
-Infinitely more reliable. (~3 dozen visits, a dozen different SCs, never a problem)

How can make money, if you can’t service your client? That is the first order problem, here.

Under Pushmi-Pullyu’s convoluted reasoning, Tesla is a profitable company because it has a 22% gross profit margin, and Tesla’s operating expenses and negative operating profit margin are completely ignored/disregarded. Does that mean that CarCharging is a profitable company because it has a 28% gross profit margin despite its whopping operating expenses and huge negative operating profit margin? I look forward to Pushmi-Pullyu weighing in on whether CarCharging is a profitable company. 😀

Are they plowing all their revenue back into the company for long term strategic initiatives?

No?

Nothing like Tesla.

That was easy! Next question? 😀

No. That affects cash flow and the balance sheet, not the income statement. The most basic accounting principle is to match revenue with expenses. Those billions of dollars spent building the Gigafactory are NOT deducted as construction expenses on the income statement in the year that they are incurred. Those construction expenses are converted into depreciable assets (Property, Plant, and Equipment) and placed on the balance sheet. A depreciation expense is then taken on the PPE assets every year for 30 years to match the revenue that the PPE assets produce over their use life.

sven wrote: “Under Pushmi-Pullyu’s convoluted reasoning, Tesla is a profitable company because it has a 22% gross profit margin, and Tesla’s operating expenses and negative operating profit margin are completely ignored/disregarded.” As usual when it comes to Tesla, sven, what you say makes no sense at all. I’m not a “financial guy”, but even I know that the gross profit margin is supposed to include operating expenses. And my understanding is that, regarding the difference between GAAP accounting and the non-GAAP accounting that Tesla was using, most of that difference has disappeared now that Tesla is no longer guaranteeing the resale value of its cars. So really, your Tesla bashing here amounts to little more than whining about something that’s in large part no longer true. “Does that mean that CarCharging is a profitable company because it has a 28% gross profit margin despite its whopping operating expenses and huge negative operating profit margin? I look forward to Pushmi-Pullyu weighing in on whether CarCharging is a profitable company.” Since I don’t have an informed opinion on the subject, I’ll stay out of it. But it seems pretty clear that if what Ken posted above is correct, then we hardly need… Read more »

SG&A are “below the line”, right? If the charging co’s had excessive corporate salaries, they’d be coming out after the gross margin. -to evaporate/bankrupt it. I didn’t look at the masterfully pasted 10-k.

Sven could argue Tesla is shifting operating expenses below the line, to help make a >20% Gross margin company look viable, yet unprofitable. SG&A (below the line) aren’t separated into gigafactory and car manufacture salaries, for instance. It is on the premise of Tesla expensing some of what has yet to come, that any of what they are currently doing would have (share price) value.

Pushmi-Pullyu said:
“Since I don’t have an informed opinion on the subject, I’ll stay out of it.”

So in other words you can’t reconcile calling Tesla a profitable company based solely on Tesla having a 22% gross profit margin while completely disregarding/ignoring its whopping operating expenses and negative operating profit margin, and calling CarCharging a profitable company based solely on CarCharging having a 28% gross profitf while completely disregarding/ignoring its huge operating expenses and negative operative profit margin.

Thanks for clearing that up.

If you read this the way Tesla fanbois read Teslas results you’d claim they are profitable. With a gross profit of a bit more than one million on revenues of nearly four million their gross profit margin is over 25%…

We need more electric cars out there. In Sweden there are a total of 20k electrics. On the roads i think there are 2 milion cars. That is around 1 %. For charging companies in Sweden to be able to be profitable easily there would need to be at least 200k electric cars I think. We’ll probably be there around 2018 I think. We just need ONE GOOD ELECTRIC CAR (model s is too expensive).

I think this ( once again ) proves how genius it is to own an EREV, EVer or PHEV – whichever you decide to call them.

Overall, there isn’t a huge demand for large charging stations, and a company that is building out a large level 2 infrastructure now seems set to fail eventually if the ramp up to electrified cars doesn’t increase dramatically. If Tesla begins selling 150,000+ EVs/yr. , there will be back ups and lines – to each charger, especially fast chargers.

I’ll have to go back to the early part of the 20th century when private business weighed whether or not to install gas tanks and pumps or not. At first, it was to lure motorists to their business establishments. Later, when motorcars were not a niche item, and became like cellphones or personal computers today, it made business sense for the oil companies themselves to franchise out fueling stations.

Fueling stations looked a lot different than they do today. No mini mart and self serve. Those stations – oh, those nostalgic days when an attendant checked your oil, your tires and pumped your gas! – Perhaps the evolution of the charging station will go along the same path. Two issues occur that will beg the addition of charging station attendants: First, and most obviously the length of time required to receive an adequate charge. Since you’ll be there for at least a half hour, backups will become normal. This is already happening t the busiest Superchargers. Some have already used valets to switch out cars that have already filled up with those waiting in line. Charging attendants would unplug your car and go park it, then grab the next car and plug it in. During this time when you’re at the coffee shop, shopping, at the movies, eating or getting your hair cut, the attendant checks and fills your TMS and brake fluids, tops up the air in your tires and/or even washes and waxes your car! Believe me, I’d opt for that from time to time. Not only return to a clean car – but not have to… Read more »

There are less than 1% EVs on the road, you should expect to make a loss at this point. The numbers are moving in the right direction though, with a couple of years worth of Bolts, next gen LEAFs and more this company could very well be in the black.

I see the real problem as inefficiency of commercial charging schemes. It started with the adoption of the very expensive J1772 standard which resulted in commercial stations costing $10k+. With a commercial charge, you are typically paying ~$.50/kwh for $.10 electricity. Commercial charging companies need to figure out how to reduce their overhead costs.

but nothing is really that expensive with J1772 standard itself – a fully networked, sturdy, and fully capable J1772 station can be profitable sold at $600 – ask me how I know 😉 It’s the installation, power delivery (underground conduit, etc), and greediness of some charging companies that drive the cost…

In our area PG&E has under built the wire drops from the poles to the buildings (esp commercial) and attempts to charge the EVSE installing customer for conductor an d transformer upgrades at $6K to $45K a site when it should have been delivering the power already. (E.g. the Service panel has plenty of capacity but the PG&E wires are too small to serve the panel…) The utility is the problem in this scenario.

Their business model is not geared for mass market acceptance, when they’re charging the equivalent of $9 gasoline at many stations, and also several of their stations are inoperable (at least in my area).

Precisely, what do you expect when they charge an arm and a leg per kWh!

If they were more reasonable I would have considered a pure BEV and would probably use them from time to time but as they aren’t I got a Volt.

The healthy employee compensation packages are exactly what Blink previously. They win no matter what happens to the company. There was a key employee recently on these websites from Blink / Car Charging telling us how wonderful it would be if they would get yet another contract from government, auto manufacturers, or anybody for that matter. Yes, I’m sure it would be. With all the contracts they’ve had in the past, they couldn’t even file government required forms on time until now, apparently. They still can’t deploy dependable charging equipment now five years into their existence. Every industry has a cockroach, and Blink is the cockroach in the public charging business. Giving them money just prolongs the agony of the day when I finally shut it down. Years ago before their first bankruptcy Nissan through millions and millions of dollars at them because they were almost the only game in town. Unfortunately, they didn’t know how stupid they were at the time. Of course, they took that money along with over $100 million of public funds and another hundred million dollars of private investor money, they liquidated the business and ran off to their yachts and high priced cars, laughing… Read more »

>>>> Giving them money just prolongs the agony of the day when I finally shut it down <<<<

There are a number of miss fillings and errors in the above post but this one is clearly wrong.

"I" won't be shutting down anything…. it should read:

"when IT finally shuts down"

If I’m reading it right, they could have saved another $2 million just by filing their SEC paperwork on time. (I’m looking at the “Non-compliance penalty” items under “Other”)

*sigh*…

I even tried to help them by paying the high rate at empty public charging stations with my Volt at $0.29/kWh… That is $0.10/mile which my Volt would have been cheaper at $2.40/gallon or $0.064/mile on gas.

I guess that is why GM aren’t building more infrastructure since it just doesn’t make money.

As I’ve said many times: unless you are selling $90,000 cars, commercial charging networks are not financially sustainable.

Gas prices would need to triple from where they are now for commercial charging to be reasonably viable for consumers. The entire (unsubsidized) economic rationale for EVs is cheap charging at home; if you can’t do that, driving an EV is a financial penalty, not a benefit.