Why ChargePoint Stock Plummeted Today

ChargePoint (NYSE: CHPT) stock saw big sell-offs in Tuesday's trading. The electric vehicle (EV) charging specialist's share price closed out the day down 13.6% and had been down as much as 16.5% in the session.

Last Thursday, the Trump administration ordered a halt to state use of $5 billion in funding that had been set aside for the expansion of EV charging networks. States have been adapting to the order today, prompting a significant pullback for ChargePoint stock.

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ChargePoint stock sinks amid political headwinds

In response to the recent order from the Trump administration, some states have been making moves yesterday and today to halt planned expansions of EV charging networks. On the other hand, some state leaders have raised issues with the legality of the order and stated that canceling the previously apportioned funding would have to be legislated by Congress in order to be valid.

Funding for EV charging stations was set aside in the 2021 Bipartisan Infrastructure Law and was scheduled to continue to be dispersed to states through 2026. While the ultimate fate of the funding remains unclear, the dispersal being contested by the Trump administration is a bearish development for ChargePoint.

What comes next for ChargePoint?

ChargePoint continues to be a leading player in the EV charging market, but the company is facing some significant headwinds amid shifting priorities under the new Trump administration. The company's share price is now down roughly 68% over the last year, and its market capitalization has been pushed down to just $302 million.

While ChargePoint is now valued at just over 60% times this year's expected sales, the business will likely continue to post large losses for the foreseeable future. Last quarter, the business posted a net loss of $77.6 million despite efficiency initiatives, cutbacks, and growth projects. With federal support for expanding EV adoption seemingly evaporating, ChargePoint will have a much more difficult time shifting into profitability within the foreseeable future. As a result, the company will likely need to raise funding by selling new stock or taking on debt -- and the stock could continue to struggle as losses mount.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.