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The City of San Antonio last week awarded a contract for electric vehicle charging stations to Blink Charging, a company that has drawn scrutiny in recent weeks from skeptical short-sellers and financial media.

“It’s never posted an annual profit in its 11-year history; it warned last year it could go bankrupt; it’s losing market share, pulls in anemic revenue and has churned through management in recent years,” Bloomberg reported in a Monday article on Blink Charging.

The city’s contract makes Blink Charging a provider for electric vehicle (EV) charging equipment and would initially add up to 140 Blink-owned charging ports and three fast-charging stations throughout San Antonio. The contract was written to be cost-neutral for the city, with the possibility of San Antonio splitting revenue with the company if the stations become profitable.

Blink’s bid for the one-year contract won out over four other proposals. Scorecards comparing the bids show city staffers gave Blink – a public company based in Miami Beach, Florida, and traded on the Nasdaq exchange – a higher rating than competitors on price, qualifications, and its proposed plan.

“The City of San Antonio is looking forward to working with Blink on this project,” a city spokesman, Carlos Valenzuela, said in a prepared statement. “Through our analyses, we know that large sections of our city are without EV charging infrastructure or have limited charging options. We hope that additional charging infrastructure that is publicly accessible will relieve range anxiety and communicate that San Antonio is an EV-friendly city.”

Under the agreement, Blink is responsible for expenses related to the site installation and maintenance. Ownership of the infrastructure would revert to the city in the event of a contract default.

City Council voted to approve the contract Feb. 4 as part of the consent agenda, meaning its vote was not discussed during the council session.

A vote on the contract was originally slated for December but was delayed after some council members expressed concerns about a pair of investor lawsuits filed against Blink. The suits accused the company of exaggerating the size and scope of its charging network in order to drive up its stock price.

In addition to the suits, Councilman Manny Pelaez (D8) referred to a report from an analyst firm, Culper Research, that claimed Blink stations were under-utilized and not well maintained. The investor lawsuits also cited this report.  

The company has called that report “false, defamatory, and anonymous” and claimed Culper Research was intentionally trying to drive down Blink’s stock price and make a profit.  Culper Research had shorted against the firm – a kind of investor move that gambles on a stock doing worse.

After the council’s vote to delay, city staff reiterated their approval for the company’s proposal at a presentation for the council’s Audit and Accountability Committee.

A slideshow from the session says city staffers met with the company’s executive leadership to discuss the lawsuits, allegations of improper maintenance, and “other public perception issues related to the company.” Company executives at the meeting assured staffers that they expected a “favorable resolution” given the “nature of the claimant and lack of substance on the claims.”

The staffers’ slideshow also cited Blink’s presence on Forbes 2021 top 100 “America’s Best Small Companies” list. Click here to download the slideshow.

Council’s initial hesitation to approve the contract in December surprised Blink’s CEO, Michael Farkas, according to the San Antonio Business Journal.

“We thought this was just a formality,” Farkas said about the City Council session. “We were completely and utterly blindsided.”

Mayor Ron Nirenberg also voiced disappointment over the delay. “One of the challenges of the EV industry is that there are very few companies that have any sort of track record,” the mayor said at the session. “So the level of volatility with stocks … is not a surprise in my mind.”

Blink’s share price has skyrocketed 3,000% over the last eight months, making it one of the fastest-rising stocks on the market in that period. The gulf between its market valuation – $2.2 billion as of Wednesday – and its comparatively small revenue stream have prompted some analysts to slam on the brakes.   

“There’s a substantial question about the viability of its very business,” Jason Hall, a host of financial podcast “The Wrap,” said on a recent episode. He and other analysts, like the authors of the Bloomberg article, have attributed Blink’s stock rally to a broader enthusiasm among investors for green energy companies, but which has outpaced these companies’ actual promise.

Blink did not respond to a request for comment.

Media critics and short-sellers have also seized upon Blink’s executive turnover. Three out of five board members of the company departed between November 2018 and November 2019. The company has cycled through two chief financial officers and three chief operating officers in the past four years. One former COO, James Christodoulou, sued the company after he was fired. In the lawsuit, he accused it of potential securities violations before reaching a $400,000 settlement with Blink, which denied any wrongdoing.

Blink warned investors in an SEC filing last year that it could be forced to shutter soon, a required disclosure when a company doesn’t have enough cash on hand for 18 months of operations. The filing from last May said Blink’s finances “raise substantial doubt about the Company’s ability to continue as a going concern within a year.”

Blink’s revenue totaled an estimated $5.5 million in 2020 – a trickle compared to other EV charging firms. By comparison, ChargePoint Inc. generated $144.5 million in revenue, according to a January filing. EVgo Services LLC garnered an estimated $14 million in 2020, with double the number of sales as Blink but a smaller charging network. Neither company submitted a proposal to the city.

Blink’s revenue model depends in part on the active use of its charging stations. Unlike many of its competitors, it owns and operates its own stations. But many remain underused.

“We don’t yet generate significant revenue from charging,” Farkas said during a November earnings call, owing to use rates remaining in the “low single digits.” He continued that he expected usage to rise as electric vehicles become more popular.

For additional revenue, Blink said in its press release this week that it also plans to apply for state grant funds from the Texas Volkswagen Environmental Mitigation Program, which has a $10.4 million fund for charging stations in Texas.

CPS Energy estimates there will be 50,000 electric vehicles in San Antonio by 2030. The latest figures from July show at least 4,440 electric vehicles already in the city.

Waylon Cunningham

Waylon Cunningham writes about business and technology. Contact him at waylon@sareport.org.