This Company Just Doubled Its Backlog In ONE WEEK

Hypercharge (HC-NEO / HCNWF-OTC) just had a HUGE increase in  its backlog of confirmed orders, announcing two new contracts totaling over 850 chargers.

Year-to-date, they have announced deals totaling 1,143 chargers. Their goal is orders of 3000+ chargers in orders by YE 23.

So what does that mean? A year ago, EV chargers were worth some US$20,000 each in M&A transactions.  If Hypercharge has 3000 installed chargers, that’s a market cap take out value of some US$60 million, or CAD$78 million, vs their current market cap of CAD$29 million.

I would argue that number should be higher, as recent research shows EV chargers are not keeping up with EV sales.

In a report last week, US brokerage firm TD Cowen said: “Total EV charging ports in the U.S. decreased by 655 ports since last week, resulting in a total of 143,541 ports…
 
“EV charging port growth remains rather subdued particularly relative to y/y growth in xEV sales in ’22 (xEV sales up +50% v. just +13% growth
in ports).
 

“EV Penetration — xEV adoption reached a record 14.6% globally in ’22 vs. 9% in ’21. Global xEV sales totaled 1.31MM in December, +19% m/m vs. 1.1MM sold in November, while xEV sales in ’22 totaled 10.49MM vs. 6.76MM in ’21, +55% y/y …U.S. EV adoption increased to 7.2% in ’22 vs. 4.4% in ’21.
 
“xEV sales totaled 994k in the U.S. in ’22 vs. 662k in ’21, +50.2% y/y”
 
Those are some big growth numbers, though growth is actually down a bit from 2021.  And the number of chargers is just not keeping up.
 
Head of Sales, Chris Koch says they’re beating out the competition for a few reasons

1. because their EV solution is so flexible—customers can buy the chargers up front or get on a low-cost monthly program, get usage data or no data
2. Service culture – they recently had a prospective customer “secret shop” their sales and support lines to test responsiveness – and HyperCharge passed with flying colours.
3. their technology can be easily integrated into other technologies that the customer may be leveraging, collecting usage data that can increase commerce for everyone.

“A very simple example is,” says Koch, “let’s say you’re a major grocery chain, you have a loyalty program, you put chargers in your parking lot and your customers can use their loyalty app to access the charger. 

They can either collect points by spending money on charging their vehicle or redeem their points to charge their vehicle… or even not pay anything but just use their app to charge their vehicle.

“And so the customer comes in, parks their  car, accesses the charger using their loyalty app, and then goes into the store and does a shop and he spends, let’s say, $73 and these are the items he buys on that particular visit.

“47 minutes later the customer unplugs their car and leaves.

“That information set of…they spent 47 minutes parked, which we can probably extrapolate that they spent about 40 minutes in the store, and these are the items they bought.

“The store can ask—’I wonder what they’ll buy next time? Let’s keep an eye on that. And are these the items he’s constantly going to buy? Maybe if we put the slightly higher end version of this item that Keith keeps buying on sale, that’ll bring him up to this basket price or I don’t know…’”

Koch adds that the groundswell for chargers is palpable.

“I think everyone is really catching on to the fact that this is going to be a must have amenity.
 
“I just got an order half an hour ago for a project that we’ve been working on it, and I got the first PO about two weeks ago, which was for over 40 chargers. And since then I’ve got four additional orders for, I need one more, I need five more, I need four more.
 
“Anyway, in this one condo development, and the Installation Partner keeps telling the strata, this is your last chance to raise your hand and then I’ll get a call. Okay, I need five more.
 
“And really what’s unprecedented is they’re going to put a charger in every single residential parking stall, which is amazing saturation.”
 

There is STILL a lot of public money for EV charging, a huge tailwind.  The big order for 748 chargers got support from both federal and local governments.

One of the most important factors for small tech companies like Hypercharge is—channel to market.  Are they selling direct (more profitable but more expensive) or through a VAR—Value Added Reseller.  Hypercharge has a mix of both, and their sales funnel is growing every month.

“Our biggest partner channel is installation partners, electrical contractors,”says Koch. “And they really like working with us for a few reasons.

“Number one, we can move quickly, and we can put product in their hands quickly. We put product in their hand that is pre-configured. So when they power up a charger after installing it in a garage, they power it up, the charger searches for a signal, finds signal and it starts working immediately. They don’t have to go charger by charger sitting on a 1-800 number trying to commission the charger.
 
“What that means at the end of the day is they get out of that job faster and on to the next job, which means more money in their jeans, which is great. It also means fewer trips back and forth, fewer support challenges, and ultimately their customer gets to start using their charger faster. So they really like that. And so we’ve been developing this portfolio of installation partners across the country and now down into the US.”
 
Hypercharge is the type of company I love to bring to my readers.  They’re a small cap stock that’s winning A LOT of new business.  There’s still a big market opportunity in chargers—customers are coming around quickly to the idea they need a charger for every stall—and Hypercharge is filling it.
 
DISCLAIMER—in the last 12 months, Hypercharge has been a paying client of the OGIB Corporate Bulletin.