$NVVE EV Charge analysis
(Spoiler: This is my highest conviction long term play, with a x10 upside for the next 3 years, and x100 for the next 10 years)
Nuvve Corporation develops EV Charging services for V2G Technology. Became public company with NBAC Spac. V2G (Vehicle-to-grid) is a technology that enables energy to be pushed back to the power grid from the battery of an electric car. With vehicle-to-grid technology, a car battery can be charged and discharged based on different signals — such as energy production or consumption nearby. So, you can charge your vehicle at night when demand is low (and price is cheap) and send power back to the grid when demand is high (and the price is high). This is good for consumers, and it's good for energy companies, who must develop an infrastructure with the ability to response on high-demand season. But if V2G can help to reduce this variability, energy companies can reduce expenses to maintain the grid.
I think the best case to understand the usefulness of this it's to imagine the fleet buses of a school or a transportation company. I don't think people will buy a car with v2g technology to take advantage of the energy prices. In other words, this is a B2B bussines, not B2C
Right now the only place where they have this technology full operating is Denmark, but is working hard to develop in USA.
Something that really excited me about NVVE is the fact that Toyota Tsusho (the Venture capital subsidiary of Toyota) bought the 7,8% of the company on Seeds A in 2017.
The University of Delaware has an 8,8% stake because they where the first to evolve the technology in 1990... And guess what? Biden went to UoD... So, connect the points
Fromed a USD 750M joint venture with Stonepeak with $SNMP where NVVE is owner of the 51% and invested zero dollars, just contribute with his technology and know how (https://www.wsj.com/articles/stonepeak-and-charging-company-nuvve-want-to-electrify-school-buses-11621251901)
Partenered with BYD for 5000 battery electric vehicles in five years (Take note, BYD is the only Warren Buffet position in EV)
So, a 228M Market Company with Buffet and Biden connections and just 375M in one joint venture
NVVE is practically a pre-rev company with a 230M market cap at 12,28 per share and 58M restricted cash and only 1,5M in liabilities
Regarding his competitors, valuation is ridiculous cheap. Let me show you a chart that I took from DJohnson_CPA (twitter user)
You can see the valuation of other companies of the sector, like BLNK with 1.6B market cap at $39,28
So, NVVE has a 7.18 REV(2021projected)/MarketCap ratio while the average in this sector is 47,2
I know the DJohnson chart shows us 6,53 for this ratio, but I'm doing the maths with the todays close, and his chart is from 2th June
And this is before the Joint Venture with Stonepeak (wich add equity value for 375M)
-Volkswagen annonunced in March that its new models will incorpore V2G technology from 2022
-Nissan is already selling cars with V2G batteries
-Hyundai, Kia and Lucid said his cars will be manufactured with V2G batteries (but they didn't say anything about dates)
-Biggest electric-buses developers ($BLBD and $LEV) are selling their vehicles with V2G batteries. BLBD already sold 150k buses and LEV is working on the production of 20k buses per year
Everybody knows Biden's infrastructure plan is betting heavy in EV sector
Government look to spend 174B exclusively in EV with the next distribution:
-25B Transit Buses
-20B School Buses
-15B for 500K Charging Stations
-20B Community Revitalization, Grants for high-capacity battery facilities, Tax credits & POS consumer incentives
We don't know yet if the hardware is profitable and how many years they will need to recover the investments. It's the best alternative from a scientific point of view, but we dont know if it's that good from an economic side. Same problem that TSLA had 10 years ago
This is a long term play, that will experience a big upside as the Biden Infrastructure Plan advance. Im really very confident that is the best company to take advantage of the EV revolution. Im not joking, I think NVVE can reach USD 100 in the next 3 years. I will not sell any single share until we reach the 3 digits. If NVVE goes to 40 next week, I will not sell either.
This is long term, it's an investment strategy, not swing trading. And I dont expect a huge upside in the short term, because you need a lot of time to develop an electric grid. But I'm really sure at some point the market will discover this company and the ride will be crazy, like we have seen in the other electric charge stocks
People are scared since MuddyWaters have released some Short Reports on EV Spacs like XL and RIDE. But this is high quality IMO.
DISCLOSURE: Long here for the next 3 years with 5600 shares, looking for a 900% upside in the next 3 years