Blink Charging CEO Michael Farkas joins Yahoo Finance Live to discuss company earnings, building out charging capacity, projected EV sales, vertical integration, and the outlook for EV migration.
- Electric vehicle sales shot up by 65% in 2022, a dramatic increase for the rapidly growing industry. More EVs means more charging stations are needed. And our next guest company contracted, deployed, or sold more than 7,500 of them last quarter.
Joining us now, Blink Charging CEO Michael Farkas. Michael, it's good to see you. It's been a minute. And, obviously, there's been a lot of developments in this industry.
You guys reported your earnings earlier in the week, where you talked about the growth in the charging stations. What is going to be necessary? I mean, we hear automakers like Tesla make big promises about how many cars they're going to be delivering. What's going to be necessary in terms of building out charging capacity?
MICHAEL FARKAS: We're doing it day by day. And it's going to be a big need as more and more EVs are on the road. As you mentioned, globally, we went from 6% on the prior year to 10% of all vehicles sold being EVs. That is a huge jump. Again, it's still a small percentage of global sales.
But, as you see what's going on, the growth is there. And legislatively throughout the world, you're seeing-- making it illegal, pretty much, after 2035, 2040 to even build or buy nonpolluting vehicles. So it's definitely in our favor.
If you look at the industry now and where we see global deployments of charging stations, you're talking about 10, 12, 14 million chargers. Of those that are actually viable, I think the number is much less. And if you look at some of the estimates from some of the largest research shops-- Bloomberg, McKinsey, and others-- you're looking at 3, 4, 5 million charging stations that are necessary by 2040.
So this is an industry that's going to be growing. With us or without us, it's growing. And hopefully we're going to be a big component of it.
- OK, and so what is the component of it that you are right now from what you're seeing in terms of your footprint?
MICHAEL FARKAS: We're one of the largest operators. We've now touched close to 70,000 chargers deployed through our history. That makes us one of the largest global players.
We have a presence in 25 countries. And we're seeing that grow continuously. Every place where you're going to have cars, whether it's the highest-earning countries or the lowest-earning countries, they're going to have to ultimately migrate towards EV.
That's what the manufacturers are going to be building. That's what the manufacturers are investing all their R&D dollars into, is EVs. They're not really spending much money now on developing, spending on R&D for internal combustion engine cars. So that's where the industry is moving.
Where we see ourselves is trying to position ourselves exactly where we've been. We're one of the first players in the areas that we enter. We're one of the largest players, first movers in the Latin and South American market, Middle Eastern markets, Mediterranean markets, Europe across the board. And we're growing either through acquisitions, as we've done in the past, or through organic growth-- and with organic growth.
- And when do you transition from a growth phase, where you're building out all of these- out of these stations into a profit-making phase? Because you guys are still losing money right now. So when does that sort of switch turn, so to speak?
MICHAEL FARKAS: Well, well, we're working on reducing our losses, increasing our revenues. And then soon, hopefully, we're going to see one overtake the other. But right now this is an infrastructure play.
You need to really look at this almost like a cell phone tower company or cell phone company or a cable television system company in their early years. It's about investing. It's about growing the footprint, and while doing that, making sure it's done economically and methodically. And you can see from our history, that's exactly what we've done.
For the first phase of our business, it was all land grab. Let's not think about the technology because it's going to change. Let's focus on just getting more and more clients, more and more acquisitions of locations where we have the rights to go ahead and deploy charging infrastructure. And that was our first phase.
Second phase was then going out there, bringing in the right people to go ahead and develop the technology internally because we knew none of our competitors were building the right piece of equipment at the right prices with the right functionality and features that really took the property owners and those that were investing in the infrastructure into consideration. If you look at all of the other manufacturers out there, they have a very simple model. None of these manufacturers own and operate. We're the only ones who do.
We're the only fully vertically integrated EV charging infrastructure company. We manage we design the hardware. We manufacture it. The network that the charging stations operate on is ours. And we own a substantial amount of the charging stations that we've deployed.
And, again, it gives us a different philosophy in developing hardware because our money is made on the sale of the energy, not necessarily the sale of the equipment.
And our main focus and our model that we developed our business upon, doing certain acquisitions, we were able to go ahead and bring another complementary services, including the manufacturing and the network. And that allowed us really to build a piece of equipment that really is superior to our competitors.
Look at the contracts that we've been winning, the United States Postal Service recently that we announced. We look at the dealerships of groups that we deal with-- General Motors, Audi, Subaru, and Mitsubishi and all these others. These are companies, they're OEMs that manufacture vehicles. They're testing our charging stations and benchmarking them against every other charging station company out there. And we're winning these orders.
And remember, this is not our main focus. Our main focus has always been owning and operating the chargers. But since we built such an amazing piece of equipment for ourselves, we've really been able to open up the market and sell it to others as well. And we see the hardware sales business right now is outpacing our owned-and-operated business because there's a lot of people who want to buy charging stations.
And, again, we're in an amazing position because we actually have the potential customer at heart. OK, we don't walk into our customers and say, hey, this is what we have and this is what we're going to sell you. We actually ask our partners, how do you deploy your capital in your locations?
Property owners are very, very, very different. They deploy capital very differently. If you're a ChargePoint salesperson and you walk into that door and that property owners say, that's a great idea, but I don't do any of these services internally, I don't want to buy equipment. I want a service provider. That's not what they do.
On the other hand, if you go Electrify America, if you like their product or service line and you want to invest in it and put that into your locations and sell those services on your own and make the money off the sale of the energy, that's not what they do. Their salespeople walk out the door.
MICHAEL FARKAS: Our sales people ask the customer--
MICHAEL FARKAS: --the property owner, how do you deploy your capital at your location? And we have the right model and solution for them to deploy that.
- Michael, I got to jump in because we're limited on time here, Mike. We only have a couple of seconds left. But I did want to get to something outside of the expansion of the business.
You're also fighting suspected illegal trading activity up against investigating naked shorts, which is the selling of shorts shares that don't actually exist. So this started in February that you started to investigate it. Have you seen anything come forward from it as of this point in time?
MICHAEL FARKAS: I want to give you some data so you can understand.
- OK, we only have about 45 seconds.
MICHAEL FARKAS: No problem. 65% of the volume yesterday was short sales in our stock. The day before, that 56%, day before for that 66%, 53%, 61%, 71%, 73%, 71%, 62%, 57%. This is the amount of the stock that sold. All orders are pegged, whether they're held long or short.
This is the percentage I just gave you of all shares sold during that day and what percentage of them are short sales. There's naked shorts that we've uncovered so far, 4 or 5 million shares. This is just the beginning. This is one of the most heavily shorted stocks on the exchanges, period. And we're making some tremendous headway. And I will tell you, everyone who has damaged this company for selling the stock illegally short will pay for it in a very big way.
- Have you been able to trace that back to anybody?
MICHAEL FARKAS: Yes. We traced it back to certain prime bankers. And I'll keep it at that for now.
- All right, Michael Farkas, thanks so much for joining us here on the day. Blink Charging CEO, we appreciate the time.