It wasn’t that long ago that investors were willing to pay high prices for companies in the renewable energy sector. Wind turbines, batteries, solar systems, heat pumps and everything that smelled like “green” energy were bought, even if the increasing sales were offset by increasing losses.
Instead, investors bet on a golden future for these industries. However, it is now dawning on many investors that the hoped-for sustainability is not achievable and will remain an illusion without massive government support, energy transition and decarbonization.
The consequence is as simple as it is significant. It was also predictable, because investors who are disappointed in their expectations tend to withdraw their money sooner or later and invest in other sectors that promise higher returns. Capital follows a hard logic at this point. It is the logic of making money, not the ideology of saving the climate.
Investors are looking for profits, not medals for saving the climate
Anyone who shakes their head in surprise is forgetting that in the capital market the question is not whether money is being made or not, but rather how much money is being made. Profit maximization is the magic word to which everything is subordinated. What this means in concrete terms can currently be clearly seen in the stock market prices of some former climate stars.
Large companies in the renewable energy and green transformation sector in particular suffered massive share price losses. Whether it’s ChargePoint, EVgo or Blink Charging, they all suffered a significant decline in their stock prices last year. The Wall Street Journal reported that the share price of ChargePoint, a charging infrastructure provider, fell by 74 percent in 2023. Blink Charging “only” lost 67 percent and EVgo is still doing really well with a share price decline of just 21 percent.
“I think investors have grown weary of the industry’s lack of profitability,” the Wall Street Journal quoted Blink Charging CEO Brendan Jones as saying. In Germany, too, the industry is suffering despite the green traffic light government. The renewable energy sector is “on the edge of the abyss,” say experts, pointing out that prices for raw materials and intermediate products have risen dramatically.