Key facts
- Gasoline prices in the U.S. exceeded $4.40 a gallon in September.
- Brent crude oil has traded above $100 a barrel since early September.
- Honda's U.S. hybrid sales reached a record 106,000 units in the third quarter.
- ChargePoint's revenue increased 18% to $116.1 million in its latest reported quarter.
- SolarEdge's European revenue more than doubled year-over-year in the second quarter.
- Eaton Corp. reported record second-quarter sales of $8.5 billion.
- VinFast Auto Ltd. delivered 286,039 e-scooters and e-bikes in the second quarter.
High gasoline prices are prompting a shift in consumer behavior toward electric and hybrid vehicles, but the financial benefits are not evenly distributed across the energy transition sector.
In September, U.S. gasoline prices surpassed $4.40 a gallon, while Brent crude oil has consistently traded above $100 a barrel since early September, a significant increase from around $60 before the start of the Iran war. This has led to a 24% rise in U.S. hybrid sales and a 52% jump in European battery-electric vehicle registrations in August, with the International Energy Agency forecasting EVs to account for nearly 30% of global car sales this year.
Despite this trend, a Bloomberg gauge tracking 104 EV-linked companies has fallen 1% for the year, weighed down by major players like Tesla and BYD, and lithium producer Albemarle. Instead, some traditional automakers and less obvious electrification plays are seeing gains.
Honda Motor Co. has benefited significantly from its focus on hybrids. After incurring substantial costs to scale back its EV plans and posting its first annual loss in nearly 70 years, the company pivoted to hybrids, planning 15 new models by 2030. This strategy proved timely, with U.S. hybrid sales hitting a record 106,000 units in the third quarter. CFO Masao Kawaguchi noted that rising North American fuel prices were driving demand for its hybrids and fuel-efficient gasoline models. Honda's operating profit more than doubled to a record ¥530.8 billion in the April-June quarter, leading the company to raise its full-year operating profit forecast by 30%. While a weaker yen and lower tariffs also contributed, investors responded positively, boosting Honda's ADRs by over 7% in May after its guidance beat estimates.
ChargePoint Holdings Inc., an EV charging company, saw its stock surge over 70% on September 2 following its earnings report. Revenue rose 18% to $116.1 million, and its adjusted EBITDA loss narrowed significantly. CEO Rick Wilmer attributed this to consumers reacting to U.S. gas prices around $4.10 a gallon. However, CFO Mansi Khetani cautioned that home charger sales were lumpy, and the company guided for slower revenue growth in the third quarter, still reporting a net loss and limited cash reserves. The stock later slid in early October as traders rotated to competitors.
SolarEdge Technologies Inc., a maker of inverters and home batteries, has experienced significant stock volatility. While its European revenue doubled in the second quarter due to demand for solar and battery storage ahead of anticipated electricity price hikes and net metering phase-outs, the company's overall third-quarter revenue guidance fell short of Wall Street expectations. Soft U.S. residential demand and shareholder class-action investigations have also impacted its stock, which closed at $32.47 on Oct. 8, less than half its spring high.
Eaton Corp., a power management company, is seen as a safer play, providing essential electrical infrastructure for electrified systems. Its second-quarter sales reached a record $8.5 billion, up 21%, with strong order growth in its Electrical Americas business. While much of this growth is driven by AI data centers, Eaton also co-engineers charging platforms with ChargePoint and holds a stake in smart electrical panel maker SPAN.
In Vietnam, VinFast Auto Ltd. is experiencing strong demand for its electric scooters and e-bikes, with sales up 311% year-over-year in the second quarter, driven by fuel shortages linked to the Middle East conflict. The company also delivered 70,085 electric cars. However, VinFast's stock has underperformed, and the company continues to incur significant losses. A substantial portion of its car deliveries are to related parties, raising questions about the sustainability of its growth outside the Vingroup ecosystem.