{"id":345167,"date":"2024-10-03T17:55:37","date_gmt":"2024-10-03T15:55:37","guid":{"rendered":"https:\/\/climatescience.press\/?p=345167"},"modified":"2024-10-03T17:55:40","modified_gmt":"2024-10-03T15:55:40","slug":"investors-beware-green-equipment-companies","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=345167","title":{"rendered":"Investors Beware Green Equipment\u00a0Companies"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

From Science Matters <\/a><\/p>\n\n\n\n

By\u00a0Ron Clutz<\/a><\/p>\n\n\n

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Steve Goreham explains in his Heartland article Why Are Renewable Equipment Companies Such Poor Investments?<\/strong> <\/a>Excerpts in italics with my bolds and added images.<\/p>\n\n\n\n

Headlines promote renewable energy equipment companies<\/strong> as part of efforts to transition to Net Zero<\/strong> carbon dioxide emissions by 2050. Wind and solar system providers, electric vehicle manufacturers, green hydrogen producers, and other green equipment firms form a growing share of world industry. But renewable equipment firms suffer poor market returns, so investors should beware.<\/strong><\/em><\/p>\n\n\n\n

The Renewable Energy Industrial Index (RENIXX)<\/strong> is a global stock index<\/a> of the 30 largest renewable energy industrial companies<\/strong> in the world by stock market capitalization. Current RENIXX companies include Enphase Energy, First Solar, Orsted, Plug Power, Tesla, and Vestas.<\/strong><\/em><\/p>\n\n\n\n

IWR of Germany established the RENIXX on May 1, 2006, with an initial value of 1,000 points. This month, the RENIXX stood<\/a> at 1,013 points, essentially zero value growth over the last 18 years.<\/strong> In comparison, the S&P 500 Index<\/a> more than quadrupled over the same period. The RENIXX is down three years in a row from 2021, losing about half its value.<\/strong><\/em><\/p>\n\n\n\n

Wind turbine manufacturers<\/strong> faced serious financial challenges<\/strong> over the last three years, even with rising sales. Rising costs, high interest rates, and project delays continue to impact the profitability of wind projects and equipment suppliers. The stock of Denmark-based Vestas<\/strong> Wind Systems, the world\u2019s largest supplier, rose only 7% over the last 16 years, and its stock price<\/a> has fallen 58%<\/strong> from a high in 2021. Vestas struggled<\/a> to make a profit in 2022 and 2023 and suspended dividends to shareholders<\/strong>.<\/em><\/p>\n\n\n\n

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Other major wind suppliers have also been poor investments<\/strong>\u00a0for shareholders. The\u00a0stock<\/a>\u00a0of\u00a0Siemens Gamesa<\/strong>, the number two turbine maker, is down 65% since a peak in 2021. Gamesa reported a loss of \u20ac4.4 billion in 2023 and\u00a0received<\/a>\u00a0a\u00a0\u20ac7.5 billion bailout from the German government<\/strong>\u00a0that same year. Other\u00a0top wind suppliers suffered<\/strong>\u00a0major stock price declines since 2021, including Goldwind of China (down 77%) and Nordex of Germany (-36%).<\/em><\/p>\n\n\n

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Some 80% of the world\u2019s solar panels<\/a> <\/strong>are manufactured in China and the top six suppliers reside in China<\/strong>. The solar panel industry is beset by overcapacity and severe competition. Stock prices<\/a> of the top seven suppliers have all declined by more than 50% since 2021.<\/strong> The stock of U.S. firm First Solar has risen since 2021 but remains below its all-time high price reached in 2008.<\/em><\/p>\n\n\n\n

Tesla, which was founded in 2003, remained the only pure-play, publicly traded EV stock until 2018. By the end of 2021, Tesla\u2019s value had soared to over $1 Trillion,<\/strong> boasting a market value<\/a> more than Toyota, Volkswagen, Mercedes-Benz, General Motors, Ford, BMW, and Honda combined. But Tesla is the exception.<\/strong><\/em><\/p>\n\n\n

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\"\"<\/figure>\n<\/div>\n\n\n

But in most<\/strong> cases, electric vehicle (EV) companies have been very poor investments.<\/strong> Between 2020 and 2024, 31 EV companies went<\/a> public on U.S. stock exchanges. Only one of these 31<\/strong> companies, the Chinese firm Li Auto, saw its price rise<\/strong> since the initial public offering (IPO). Thirty EV firms saw their stock prices fall, most precipitously.<\/em><\/p>\n\n\n\n

EV company price declines<\/a> from the IPO price include<\/strong> Fisker (-99%), Nikola (-94%), NIO (-50%), Lucid Group (-75%), and Rivian (-88%). Six others of the 31 companies went bankrupt<\/strong>. Tesla and Chinese firms BYD and Li Auto are the only EV firms profitable<\/a> today.<\/em><\/p>\n\n\n\n

ChargePoint<\/strong> is the world\u2019s largest dedicated EV charger company<\/strong> (behind EV manufacturer Tesla), with over 25,000 charging stations<\/a> in the U.S. and Canada. ChargePoint went public in 2021 by merging<\/a> with Switchback Energy Acquisition Corporation, valued at $2.4 billion. The firm\u2019s value today is about $585 million, down 76% since 2021.<\/strong>  For fiscal year 2024, ChargePoint lost<\/a> $458 million on revenue of $507 million.<\/em><\/p>\n\n\n\n

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It\u2019s not clear that any charging company can make money.<\/strong>\u00a0High-speed, 50-kilowatt EV chargers cost about five times as much as traditional gasoline pumps. Around 80% of EV charging is done at home, reducing the demand for public charging. ChargePoint, EVgo, Wallbox, Allego, and Blink Charging are all valued today at small fractions of their original IPO price.\u00a0No EV charger firm is profitable, even after continuing to receive large government subsidies.<\/strong><\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Plug Power is a leading supplier<\/a> of hydrogen energy systems,<\/strong> including battery-cells for hydrogen vehicles and electrolyzers to produce green hydrogen fuel. Founded in 1997, the company went public in October 1999 at a split-adjusted price of about $160 per share.<\/em><\/p>\n\n\n\n

But during its 27-year history, Plug Power has never turned a profit.<\/strong> According to financial reports<\/a>, the firm lost $1.45 billion in 2024,<\/strong> up from a loss of $43.8 million in 2018. Its current stock price is under two dollars per share.<\/em><\/p>\n\n\n\n

Traditional established firms are finding that renewable equipment can be poor business.<\/strong> In 2023, Ford <\/strong>lost<\/a> $4.7 billion on sales of 116,000 electric vehicles, or over $40,000 per vehicle. General Electric<\/strong>\u2019s wind turbine business lost<\/a> $1.1 billion in 2023.<\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The\u00a0U.S. federal government provided subsidies<\/strong>\u00a0to renewable equipment companies of\u00a0between $7 billion and $16 billion per year between 2010 and 2022.<\/strong>\u00a0But the Cato Institute\u00a0estimates<\/a>\u00a0that because of the passage of the Inflation Reduction Act in 2022, subsidies\u00a0will skyrocket to about $80 billion in fiscal year 2025.<\/strong><\/em><\/p>\n\n\n

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\"\"<\/figure>\n<\/div>\n\n\n

Without the fear of human-caused climate change and
a rising level of government subsidies and mandates,
many of these green companies would not exist.<\/strong><\/em><\/p>\n\n\n\n

It\u2019s doubtful<\/strong> that carbon dioxide pipelines, heavy electric trucks, offshore wind systems, green hydrogen fuel equipment, and EV charging stations would be viable businesses in unsubsidized capital markets.<\/strong><\/em><\/p>\n\n\n\n

During this last year, leading financial firms pulled<\/a> back on their climate change pledges.<\/strong> Bank of America, JP Morgan, State Street, and Pimco withdrew from Climate Action<\/a> 100+, which seeks to force companies and investment funds to address climate issues<\/strong> and adopt environmental, social, and governance (ESG) policies.<\/em><\/p>\n\n\n\n

But it\u2019s difficult to invest in renewable equipment companies
when they are losing money.<\/strong><\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

<\/a><\/strong><\/em><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Headlines promote renewable energy equipment companies as part of efforts to transition to Net Zero carbon dioxide emissions by 2050. Wind and solar system providers, electric vehicle manufacturers, green hydrogen producers, and other green equipment firms form a growing share of world industry. But renewable equipment firms suffer poor market returns, so investors should beware.<\/p>\n","protected":false},"author":121246920,"featured_media":345183,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691830779,691830781,691830778,691830780],"class_list":{"0":"post-345167","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-poor-investments","9":"tag-renewable-energy-industrial-index-renixx","10":"tag-renewable-equipment-companies","11":"tag-wind-and-solar-system-providers","13":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/10\/0electric-car-charging-at-the-charger-at-house-solar-panels-wind-turbines-in-background-vector.jpg?fit=1920%2C995&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1rNd","jetpack-related-posts":[{"id":343648,"url":"https:\/\/climatescience.press\/?p=343648","url_meta":{"origin":345167,"position":0},"title":"Why Are Renewable Equipment Companies Such Poor Investments?","author":"uwe.roland.gross","date":"09\/18\/2024","format":false,"excerpt":"Headlines promote renewable energy equipment companies as part of efforts to transition to Net Zero carbon dioxide emissions by 2050. 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Green energy backers attack capacity market proposal, saying we \u2018shouldn\u2019t be paying to keep coal and gas\u2019 By energy reporter\u00a0Daniel MercerPosted\u00a0Thu 21\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/07\/image-299.png?fit=869%2C507&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/07\/image-299.png?fit=869%2C507&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/07\/image-299.png?fit=869%2C507&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/07\/image-299.png?fit=869%2C507&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":257821,"url":"https:\/\/climatescience.press\/?p=257821","url_meta":{"origin":345167,"position":5},"title":"Gridlock: renewable energy projects worth billions stuck on\u00a0hold","author":"uwe.roland.gross","date":"05\/17\/2023","format":false,"excerpt":"Quote: \u2018The system was built when just a few fossil fuel power plants were requesting a connection each year, but now there are 1,100 projects in the queue\u2019. 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