Joe Biden was seeing red after an EV charging company he touted saw its stock take a dive

Dec 27, 2023

The Biden administration’s race to promote electric vehicles just received another yellow flag.

And the once fast-paced race to an all EV market has slowed to a crawl as new problems crop up daily.

That’s why Joe Biden was seeing red after an EV charging company he touted saw its stock take a dive.

The Biden administration promoted ChargePoint, the electric vehicle (EV) charging company, in support of Joe Biden’s climate agenda repeatedly over the last year.

A major crash

But now, the company is facing massive economic and legal troubles and appears to be another EV company on the brink of a short circuit.

Back in February, Biden’s White House highlighted ChargePoint’s deals with auto companies as proof the Biden administration’s “actions on EVs have spurred network operators to accelerate the buildout of coast-to-coast EV charging networks.” 

But in the ten months since promoting ChargePoint, the company’s stock price has taken a steep dive, losing significant value.

In response, ChargePoint CEO Pasquale Romano has stepped down from his post and the company is facing a class action lawsuit.

The White House promoted ChargePoint’s partnership with Mercedes-Benz as well as the company’s partnership with Volvo and Starbucks to deploy thousands of charging stations around the country.

Biden also praised ChargePoint’s agreement with SMTC Corporation to expand its charger manufacturing capacity in California.

Investing in an equitable and diverse pipeline of workers  

Of course, the Biden administration also applauded ChargePoint for “[investing] in equitable workforce development and [training] a diverse pipeline of skilled workers to build our nation’s infrastructure” in a November 2022 press release.

And in August 2022, Biden even appointed Romano to the National Infrastructure Advisory Council, a group of private sector and state or local government officials tasked with advising Biden on how to best reduce risks to the nation’s critical infrastructure. 

Despite the appointment, and his favor within the Biden administration, Romano stepped down as CEO on November 16, and so did company CFO Rex Jackson.

In the 24-hour period between the announcement Romano was leaving and the day after, the company’s stock lost a whopping 40% of its value.

The company’s stock price reached a high of $46.10 per share on December 24, 2020, and had dropped to $13.38 per share by February 15, 2023.

It is now trading at around $2.24 per share, down nearly 75% year-to-date.

From bad to worse

But the news for ChargePoint, and the Biden administration, gets even worse.

There is a class action lawsuit against the company, alleging that the company and some of its top executives violated the Securities Exchange Act of 1934. 

Specifically, the suit alleges the company’s share price was artificially inflated because of false and misleading statements made by company executives. 

ChargePoint’s story is very similar to that of other EV companies like Li-Cycle, a battery recycling company with which Biden reached a deal for a $375 million loan package in February. 

Li-Cycle had cleared the Department of Energy’s (DOE) due diligence process even as it was accused of defrauding its investors, and that company’s stock price has also since tanked.

Charging infrastructure remains one of the key obstacles to the Biden administration’s EV agenda, which has a goal that 50% of all new car sales be EVs by 2030. 

The Biden administration has set aside billions of taxpayer dollars to help the EV industry build a nationwide charging network. 

This is in addition to billions to subsidize EV manufacturing by automakers.                       

But auto manufacturers are losing massive amounts of money on their EV product lines, as consumer demand is not even close to what was hoped. 

Hot Take Politics will keep you up-to-date on any developments to this ongoing story. 

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