Company: Nuvve Corp
Listing : Nasdaq
Ticker: NVVE (formerly NBAC)
Market cap at time of publication: $241 MUSD
Stock price at time of publication: $12.95 USD
Business: Global leader in vehicle-to-grid (V2G) technology offering high-powered charging and grid services that optimize unused and renewable energy.
Comparable peers: Chargepoint Market cap $ 7,4 Billion USD, Blink Charging Market cap $1,7 Billion USD
Website: https://nuvve.com/
Nuvve Corp is currently the only electric charge station company in the ESGFIREAT40 portfolio. The reasons for this choice is quite simple and obvious. Nuvve is THE leading company in what is known as vehicle-to-grid (V2G) technology and have many patents protecting their technology. The company is well funded since they received close to 75 million USD in the recent SPAC merger including PIPE investors. The company is also very attractively valued compared to its peers as of 4/1 2021 ( see summary below):
EV/Sales comparison based on 2021 projections :
Blink charging – 170
Chargepoint – 37
Nuvve Corp – 7,5
EV/Sales peer comparison based on 2022 projections:
Blink charging- 68
Chargepoint – 21
Nuvve corp – 2,6
Background
Nuvve corp is a post SPAC (Special Purpose Acquisition Company) that merged with Newborn Acquisition Corp at the end of 2020 and started trading as Nuvve Corp (NVVE) on 23/3 of 2021. ESGFIREAT40 has been holding and adding to the position in Nuvve Corp even before the SPAC deal was announced and the company has continously been mentioned by ESGFIREAT40 on Twitter as an interesting EV charge station company.
Nuvve ,the leader in vehicle-to-grid (V2G) technology, has been shown very little love by the stock market despite the fact that the company solves a real and pressing issue : How will the power grids globally be able to bear the burden of the power surge when ,in a not too distant future, several million electrical vehicles worldwide will need to charge their batteries at the same time ? Nuvve’s proprietary vehicle-to-grid (V2G) technology enables the linking of multiple electric vehicle (EV) batteries through EV charging stations into a virtual power plant (VPP) providing bi-directional services to the electrical grid in a qualified and secure manner thereby stabilizing the power grid!
The original idea for vehicle-to-grid (V2G) technology was developed by Professor Kempton (a co founder of Nuvve) in 1996 and in 2010 Nuvve incorporated and acquired V2G international tech license. In 2017 Nuvve bought the entire IP rights to the V2G technology. Nuvve has offices in Denmark, France, The United Kingdom and in several locations in the United States.
Picture above explains the issue Nuvve Corp solves, Large numbers of EVs cars can
increase strain on the power grid if the grid is mostly supplied by renewable energy which is difficult to store
Total Adressable Market (TAM)
The TAM for Nuvve’s services is enormous. Independent reports are said to estimate that Vehicle to grid ( V2G) technology will become a $17 billion market by 2027. Nuvve themselves as stated by the picture below think the total adressable market is closer to 296 billion USD. Nuvve is well positioned to grab a leading share of the V2G market. A big indication that Nuvve’s technology can be successful is the fact that it’s been operating in a 4 year trial in Denmark.
Business model
Nuvve’s aggregation platform allows it’s user to offset their electricity bills by optimizing charging times. With compatible V2G vehicles linked to Nuvve’s GIVeTM platform electricity from the EV battery may be sold to earn revenue in energy markets. In other words the company generates revenues for its customers from bidding onto energy markets and at the same time creates energy savings / power grid stabilization . Nuvve’s technology and ecosystem has proven to successfully lower the cost of electric vehicle ownership, while supporting the integration of renewable energy for a scalable and sustainable green society. This makes it possible for any vehicles operating with Nuvve’s charging system to make money while standing still by offering excess power to the power grid when the vehicle is not in use. As you can see in the picture below, Nuvve was able to generate revenue of nearly $3.2 k per year per car during their trial in Denmark. Each school bus and regular bus on the other hand uses a lot more energy than a car and hence provides proportionally a lot more revenue to Nuvve at around $10-20k instead of $1-2k for a car(management estimates). There are also very high upfront revenues for Nuvve because of the installation of the Nuvve solution. School buses are estimated to contribute about $20mil of the $30 MUSD revenue guidance. The rest coming from grid services that is already underway and from partnerships.
Competitive advantage
As previously stated Nuvve owns the key patents to vehicle-to-grid (V2G) technology and has first mover advantage with 10 years experience of market participation and stake-holder interaction including with car OEMs. It will be very difficult for competitors to execute V2G
functions without violating Nuvve`s intellectual property. Nuvve has over the years accumulated a massive amount of data which provides both safety and reliability when it comes to performance of electric vehicles. Nuvve is already qualified by multiple TSOs(Transmission system operators) which makes it easier to expand in other areas. Its a long and time consuming path to become quailified by TSO (usually 12-36 months).
Strong partners
Nuvve corp have two strong partners/shareholders in EDF and Toyota Tsusho. EDF is a $40 billion dollar French Utility company and Toyota is one of the largest automakers in the world. Their backing of Nuvve really gives credibility to Nuvve corps technology and also gives Nuvve the huge opportunity to partner with these big corporations rolling out V2G technology in both Europe and Asia. Both EDF and Toyota have representation in the board of Nuvve Corp showing their commitment to the company.
Strategy moving forward
Nuvve is currently partnering with EDF in a joint venture by the name of Dreev to launch V2G technology in parts of France. Dreev has already installed V2G terminals in Hotravail, France, and is working to install terminals in the Civaux Nuclear Site.
Nuvve’s current strategy is to enter the electric school bus market in the US. School buses are ideal choices for Nuvve since they stay idle for many days during the summer season and for many hours during both night and day time in between school rides. Nuvve has also partnered with Lion Electric and BlueBird, of which both are among the leading school bus companies in the United States. It’s also not unlikely that the company will look to expand into the refuse truck and transit bus market.
Risks
The company expects its revenues for 2021 to increase by 550% increase compared to 2020. This very aggressive revenue projection depends on the deployment of the company’s solutions across soon to be electrified school bus fleets in the United States, a very likely scenario with the new Biden administration. Nuvve has a very high gross profit margin according to their own numbes. The gross profit of $3.5 million expected to be generated in 2020 is at a wooping 70% margin to revenue during the same fiscal year.
Another risk that needs to be taken into consideration is if car manufacturers such as for example Tesla configure their cars so that car owners are only able to use vehicle-to-grid (V2G) technology provided by Tesla.
The company is counting on the fast adoption of electric vehicles to support its rollout and its strong leadership and competitive advantage in bi-directional charging solutions that hopefully will provide a strong advantage to maintain its revenue growth and gross margins.
However the company is still unprofitable and it does not foresee generating any sort of net income until earliest in i its fiscal year of 2021. This is something to be taken into consideration . There is also a risk , although unlikely, that competitors could work around Nuvve’s patents and create an equal product. Finally , there is also a big risk with basing an investments on company projections.
Spac merger lockup terms
Existing Nuvve stockholders have agreed to a one-year lock-up from merger close, subject to a partial release if after the 6 month anniversary of the merger close the VWAP of the Nuvve Holding shares is at or above $12.50 for 20 out of any 30 consecutive trading days. Existing Nuvve stockholders will also be entitled to receive an earnout of 4 million newly issued Nuvve Holding shares if Nuvve’s 2021 revenue exceeds $30 million as reported in its 2021 audited financial statements.
Conclusion
The company is well funded with approximately 70-75 million USD in the bank post SPAC merger to be put into relation with the market cap at 241 MUSD . With the latest infrastructure bill from President Biden that includes expanding the total current EV charging station network by 100% from the 2021 numbers in the United States every year for 10 years straight and the end goal to build 500 000 ev charging stations this is a BIG bull sign for the EV charging market. The bill also intends to upgrade the power grid and to replace at least 100 000 school buses to electric ones. Nuvve benefits from all of these actions.
Last but not least the infrastructure bill suggests a simplified rebate system where a buyer of an EV vehicle would immediately get a $7500 USD rebate instead of waiting until the following tax year. Nuvve recently (23/3 2021) delivered its first charging station in North America in cooperation with one of the United States leading EV bus producers Blue Bird Corp ( also mentioned by ESGFIREAT40 in previous blog posts).
Nuvve has not seen the anywhere near type of hype that some of the other companies in the EV space have experienced. The company does not have any high-resolution images of CGI scenes with cars/buses yet to be built or any unrealistic revenue projections . I believe Nuvve offers a very good risk to reward profile in the EV charge sector. The future prospects certainly looks bright for Nuvve Corp!
I own shares in this company personally and this is not to be considered financial advice, always do your own research!
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