Electric vehicle (EV) sales are booming globally, but a lack of robust infrastructure could put the brakes on their continued growth. This is according to Stephanie Link, chief investment strategist at Hightower Advisors, who recently spoke at the Benzinga AutoRevolution: The Future of Mobility and EVs event.
While Link acknowledges the impressive 35% year-over-year increase in global electric car sales, she warns that the infrastructure needed to support this surge is lagging behind. “We need the grid to be more modernized,” she emphasized, highlighting the insufficient investment in upgrading the aging U.S. power grid.
The challenges extend beyond the lack of charging stations. Consumers face difficulties due to the outdated energy systems, which struggle to handle the increasing demand for electricity. Link stresses the need for significant investment to bring the grid up to date, stating that “We haven’t spent a lot of money on it—in incremental new money.”
Furthermore, affordability remains a barrier for many potential EV buyers. Link points out that only a handful of new EV models in 2024 are priced below $50,000, and none are below $30,000.
To address these challenges, Link highlights companies like Quanta Services and Eaton, which are actively working on modernizing the power infrastructure. These companies are undertaking projects to enhance the capacity required for EV charging and other electrification initiatives. “I just think that the numbers that I’m seeing from these really established companies are just beginning,” she said, noting the increasing workload related to grid modernization.
Link emphasizes that the need for grid improvements extends beyond the automotive industry. Data centers, for example, are heavily reliant on a robust and modern power grid to meet their future energy demands. “We are going to spend four trillion dollars between now and twenty-fifty on this electrification, this whole new energy transition,” she stated, underscoring the immense scale of investment required.
Despite the immense potential of the EV market, Link advises investors to adopt a long-term perspective. “I think you have to have a long time horizon if you’re going to invest in this theme,” she said, emphasizing the gradual pace of necessary infrastructure improvements.
In essence, Link’s message is clear: while electric vehicles are poised for continued growth, the U.S. must prioritize modernizing its power grid to support the rising number of EVs and the broader electrification needs of the future.
