Blink Charging Co. (BLNK) Earnings Call Transcript & Summary

Good morning, and welcome to Blink's Fireside Chat titled CEO to Future CEO. My name is Vitalie Stelea, I'm the VP of Capital Markets and FP&A at Blink Charging, and we are located at our headquarters in Bowie, Maryland. Today with us, we have Brendan Jones, our President and CEO; and Mike Battaglia, our Chief Operating Officer. Just to remind everyone, this is a live session. We will be recording this session, and we appreciate the questions you've sent us in advance. In addition, keep in mind, you can send us a live question through the webinar interface that you're watching the webcast right now. So with that, let's start our questions.

The first question, we'll go to Brendan and -- Brendan, it's a pretty simple question, I think, maybe not. But how are things going in Blink? Or maybe said differently, what's keeping you up at night these days?

Well, things are going pretty good at Blink. We started out this year with a record year from 2023. We've moved in very optimistically into 2024. The first quarter was very, very, very good. We've seen some stagnation or a bit of a slowdown in the market, although there still is growth. The growth is a little slower than expected. However, as we're moving into the fourth quarter, we're also seeing some pickup in volume and some increase in our bookings, which is our leading indicator of revenue. So overall, still growth. There's some noise in the marketplace that we are working through. It is a big political year as we know. And also -- but we're seeing growth continuing out of China, continuing out of Europe, still growth in the United States. So what we'd say is the future for Blink in the industry as a whole is very optimistic. We're positioning ourselves. The key thing with the company is to make sure that you're doing the things necessary to be sustainable. Are you cutting costs? Are you finding new opportunities for revenue? You've got everybody on the same page with your short-term tactics and your long-term strategy. And all those fundamentals are what we've been working on diligently for the last four years and indeed in a very aggressive way for the last two years, and we're fairly confident that we've got Blink on the right path for sustainable growth and for long-term success.

Makes sense. And we got a few questions about your announced retirement, congratulations by the way.

Well, thank you.

But you've been a leader in Blink since 2020. You've taken the company through a massive transformation. So the question is why retire now?

Well, so the retirement it's been the long term in the planning, and that's what everybody needs to understand, and I've said this to a lot of people, but it is hard to believe. It's hard to believe for me, it's actually here. So when I joined, the plan was to work five years structurally adjust the company and really see what we could build this into and that five years is almost approaching. It's going to hit about the time I'm leaving at the end of January. And also, as it always happens in life, there's some personal issues and some interpersonal things that combined is just a decision. And so it's never one variable. And those have happened as well. There's been some deaths in the family, some transitions or empty nesters now. So all those typical things that happen, they arise at this one point in time, and you're able to make that decision. So we're quite happy about the decision, and we're also -- and what's key is I wouldn't have made this decision if I didn't know that we had a great leadership team and that our transition plan and our development plan had been put in place a long time ago to make sure we position Blink for success. And that's what we've done. And Mike has gotten the pick to be the next CEO. And let me tell you, he's well deserving. I wouldn't -- the Blink wouldn't be where it is today without Mike being part of this great team we built about four years ago.

Congratulations to Mike, but is -- as far as the new CEO, Mike will become the new CEO at the end of January of 2025. And Mike, we have a question here about what should investors but also employees and stakeholders expect from you when you become CEO of Blink Charging?

So yes, thanks, great question. So first of all, there are short-term plans, there's medium-term plans. There's long-term plans. So #1 in the short term is very much a continuation of what Brendan has started and the great path that he's led us on. So first of all, I couldn't be happier with the process and the Board of Directors and the trust that they have put in me along with my colleagues. So as you guys kind of indicated, this is absolutely a team effort. This is not about any one individual. It's about the team that Blink has created over time, and that will take us to the future. So to answer your question, though. Number one, it's going to be a focus on revenue growth. That's no change. I mean, that's our #1 priority as a company. We're going to focus on revenue growth. Number two, we're going to focus on cash management. As it relates especially to cost containment, are we going to cut some costs? Yes. Have we cut some costs? Yes. That's just a healthy company doing what it needs to do to position itself correctly. So we're going to preserve cash through cost cutting, through cost mitigation actions, et cetera. The third thing that we're going to do is we are going to invest in the technologies that are going to propel us into the future. And that's a really, really key point. So while the market right now is temporarily a bit soft, the end game has not changed and the end gain is the same which is the electrification of transportation globally, and Blink is very, very well positioned to do that. Then the final thing I'll just mention is we are going to continue to execute on the strategic plan that the management team developed along with the Board of Directors, and that's important that was in partnership. It was really a great process where we've laid out our long-term strategic plan, and we're going to continue to execute on that plan. We're going to put the right milestones and dates in place and the accountability internally for all of us in order to make sure that we achieve that. So I think generally speaking that's what you can expect.

Great. And who will be the new COO?

Good question. So we actually made the decision not to replace me as CEO -- COO, excuse me, slip of the tongue. But so that was a move that we decided to do really -- we felt it was responsible. It's a cost-saving action. So when you look at, hey, we're going to eliminate the COO position. And basically, what we're going to do is empower more of our leaders to take on more responsibility and look, we have the team that's ready to do that. So in no way, shape or form is that a concern for us.

And I'll add to that, that the way Mike and myself have structured it is that we have two global Vice Presidents of operation, one based in Europe, one based in the United States. We built up staff under them. So we have this really robust operational framework right now. And then we have a Chief Revenue Officer who sales and sales operation reports up to. So we had a long-term vision of structuring, adjust this to meet that. And now it's presented us with that opportunity. And this is great for the bottom line of Blink. But also it's attributed to being nimble and being efficient and driving profitability via cost reduction and revenue growth.

And also having the bench, if you will, among the management team that is ready and can do it. So certainly, we trust them to do it and they're going to take it afterwards.

Thanks for that. So let's shift gears a bit and talk about the industry. We saw the statistics that came out for August for U.S. The EV penetration was about 8.5%, just for battery electric vehicles. If you include the plug in hybrids, it was about 10.6%. It depends on the source and the company that's reporting this, it's moderate growth or relatively flat, right? So the question for Brendan is Brendan, any comments on those statistics and how you think that's impacting Blink in the short term?

So first, let's look at the macro question first because that's what you got to do and then you come back into the details. So on a macro perspective, globally, EVs are growing, that continue to grow. The need for infrastructure is growing. And there's a deep need for more infrastructure right now than for the EVs that are in operation, in fact. If you look at what's going on in the United States, it's still growing. Is there a bit of stagnation? Is there a bit of repositioning in the marketplace? Absolutely. It's an election year. We've got some concerns. Interest rates certainly played a role and whether I'm going to do a massive capital investment. But what we're starting to see on the micro level is we're starting to see people come off the bench now. Get back and we're starting to see charger sales in terms of bookings increase in the fourth quarter, which is a great harbinger for what's going to happen in 2025. So very optimistic. And when you think about it, 8.5% of total industry volume, there is OEMs today, car manufacturers that don't have 8.5% market share, and the EV industry does, that's phenomenal. That represents a tremendous amount of EVs on the road. And I think we're adding 1.5 or might be 1.3 or 2 EVs.

Million?

Million globally every year in the U.S. So there's -- you hear some statements out there, but the reality is we're continuing to see growth, we're continuing to see the need for chargers. And we haven't hit the sweet spot yet. So exponential is still the word we're using for the future in terms of growth. We believe the industry is going to see that, and we also believe that Blink will see that as well.

And from the charging utilization perspective, Mike, how -- what are you seeing out there in the U.S. but also in Europe? I mean, I'm glad Brendan mentioned globally because Europe was up 20% in August where it was actually -- the penetration was 20% in the top 5 European markets and China was over 50%. So we're seeing global still pretty strong penetration. But what are you seeing from a utilization perspective?

Yes. So if you look at Blink's business, we primarily operate in the United States and in Europe. And what's very interesting about the company is the makeup of our revenue in both of those markets. So when you look at the U.S., we are far more heavily weighted towards product sales and less weighted towards the owner-operator model. In Europe, it's exactly the opposite. And part of that is because the electrification market in Europe is further along than it is in the U.S. So we actually have the benefit of seeing into Europe from the U.S. on what is going to come here. So again, to answer your question number one, we see very, very strong utilization rates for our owner-operator assets over in Europe, and we think that's only going to continue. In the U.S., we are seeing really strong growth in the owner-operator assets from -- in terms of both utilization and dollar growth from last year to this year, even quarter-over-quarter. So when you look at 8.5% EV penetration. And as Brendan mentioned, that represents over 1.2 million cars hitting the streets in the U.S. that are battery electrified vehicles, this year alone, it is naturally creating that increased utilization and demand for EV charging infrastructure. So we continue to be super bullish on the owner-operator model. And at the same time, we're going to continue to sell product into the market for customers that want to buy product. So it's a pretty simple equation.

Great. We'll shift gears a little bit more to financials. There's a question here about gross margins. So our first half 2024 gross margin was 34%, that's on a GAAP basis. If we were to adjust it for a non-GAAP basis probably would be higher. But the question is, how is Blink able to maintain that margin, especially when compared to other companies in the sector. And what else can Blink do to increase that margin going forward. Maybe we'll start with Brendan.

Sure. So I'll take it from the big picture perspective. So we've talked about this before. Vertical integration on the product side is key to margin and profitability. As the industry goes through a degree of commoditization, how do you stay above that. And that's what we do by vertically integrating. So we design, manufacture and produce 60% of our hardware. Our plan is that to grow to 80%. We don't think we're going to go above 80% as a specialized hardware that you don't have the scale to really be efficient now. But 80% is a big goal. So right now, when you think of that and then you add the additional equation to that, that we develop our own firmware and software solutions in-house. We don't go to outside companies and pay a margin on that. It gives us this ability to stay very competitive on a product basis in terms of the margins. And we're going to continue to do that now. That doesn't just stand alone by itself and it has to have other elements, and I'll let Mike talk about how you have to be efficient in how you run your operations in order to maintain that margin and indeed at times increase it.

Yes. So one of the things that I just want to touch on the vertical integration is you say why are you vertically integrating? And Brendan mentioned it. Number one, it's the cost side of the equation and it allows us to keep our costs lower. And we have this really great team in India that helps us on the manufacturing side with component level and then what we were able to do is we're able to bring those components to the United States and right around the corner here in our new manufacturing facility we're able to assemble those products with other American-made components to become America-compliant chargers for our L2 line. So that's one aspect of it. The second aspect of it is we want to own the entire technology stack. So that's fundamentally what we mean when we say vertically integrated is we not only manufacture the hardware, we develop and deploy our own software network and we control the firmware on the hardware itself. And that's where the industry can get tripped up. When it comes to reliability and uptime and all those things, right? Because when you don't own those two pieces, you're worried about compatibility and there are compatibility issues. And for Blink, the more we vertically integrate the more we're able to control that technology stack and get better, better and better in terms of uptime across the network. So that's fundamentally why we vertically integrate. And again, in terms of margins, because we have these two pieces of our business where we manufacture the hardware, we're able to sell it at a decent margin. And then we also own and operate these assets, which have the fantastic profile of recurring revenue and high margins. So you put those things together, and that's why we're at 33%, 34% and why our eye is on how do we continue to expand that.

Okay. And actually, this ties very well to the next question. When will Blink launch its single port charger in Bowie? When is that expected to happen?

Well, from my perspective, I hope it's sooner than later, but Mike is leading up that project. So I'll let him give all the comments on it.

Yes, thanks. So our new single port Series 7 is actually going to go into manufacturing in October and be available in volume in November. And so why is it important? It's important because we have a segment of our chargers that are single plug that we now source from a third party. So this is really, really important for us where we can launch our own single plug unit that is manufactured by Blink. And again, as Brendan mentioned, we're at 60% vertical integration. That product is really key in pushing us above that 60%. And again, that represents yet another product where we control the entire technology stack.

Okay. So continuing with financials. Second quarter operating expenses were down quite a bit, 41% year-over-year. And the question is should investors expect further reduction in operating expenses before January 31, when Brendan's going to pass the reins to Mike.

Yes, absolutely. We have objectives that we talked about. We've been very transparent with the -- our analysts. We've been very transparent with the public and our shareholders and even with our employees that we're going to continue to reduce expenses. We have targets that we have yet to achieve this year, but we will achieve them, and we're going to continue to make sure that Blink is an efficiently run machine. We still have some technologies to deploy to create sameness in operations in the financial systems, HR systems, and even in manufacturing processes as well across the company. Those are going to create additional cost saves, so look for more. We will have some announcements on that as we move forward. But definitely, this is not something that begins and then ends when you're talking about cost efficiency and cost reduction, it becomes part of your pulse. If you're going to be a company that's focused on long-term sustainable growth, you also have to be a company that's focused on continuous improvement, and that improvement is encompassing quality, the way you sell product, the way you market product, the way you manufacture product, the way you look at your purchasing decisions and everything has to be that we are not wasteful and we're cost efficient. And when you're talking about margins again, say going back to that, this is how you maintain higher margins in the industry. So we've got more to come this year, but look at Blink to continue to develop and go with this method of constant improvement in our operations and everything we do to be a company that is focused on revenue growth, but is also focused on cost avoidance, cost mitigation and cost reduction.

Brendan and I come from similar backgrounds. He started in Nissan, I started at Toyota, and that whole concept of continuous improvement and Kaizen that gets drilled into you very, very early in your career. So I think we'll continue to use that term to a point.

Great. Next question comes from an investor. And he is asking about the portion of revenue that comes from product versus services, so the absolute value of the services revenue is still relatively small when you look at the product. So the question is why even be in services. Why invest time and money and we talk about services quite a bit, but what?

So fundamentally, it's services that create a valuable company period. I mean I believe that super strongly. So I think right now, our services revenue makes up about 1/4 of our total company revenue. You're going to see that growth. So eventually, what we'd like to see is kind of a flip of that. So instead of 75% coming from product sales, 25% roughly coming from services. We want to see that invert. So the question is how do we get there? We get there through continuing to deploy Blink owned charger assets globally, number one. Number two, we start to get into more sophisticated technologies as it relates to energy management services. And number three, we start to pursue more Software-as-a-Service offerings through our, again, in-house built networks. So that's how we are going to continue to evolve margins. It's how -- and so the answer to your question why is because it's that high margin recurring revenue that investors value quite frankly. And it's just the right way to go.

So I look at it almost the same way, but let's rephrase the question. So because we get locked into percentages. And what we need to look at is, is that revenue growing? And the answer is fundamentally that revenue is growing. And the reason -- simplistic reason why is units in operation globally in both the United States and Europe, they continue to grow. The more EVs on the road, the more utilization of revenue we're going to get. Now we're also victims of our own success. When you win part of the largest chargers award in the history of the United States, 41,500 charges from the post office, your sales percentage goes up dramatically. So then you're looking at a percent and going well, we're doing great over here. But that constant revenue from the owner-operated model is also consistently growing and your sales eventually, not today, you're going to see this smooth shift. And what's unique about Blink is better than any other company, we're positioned to take advantage of that shift and make a natural transition to more and more revenue from the owner-operated model. I mean no company is positioned like we are. So we're going to continue to pull that sales lever, make great revenue off selling product, especially as we're vertically integrated and we can continue to invest in the owner-operator model. And as the industry transitions, we're going to transition with it.

And just to add one small thing to what Brendan said, it is great is we listen to the customer. So there is a group of customers that will always want to buy product. That's just who they are. It makes sense for their use case and their application, and we will be there to sell them that product. But then we think that there's going to be more and more a growing population that is going to want Blink to own and operate that equipment. And so it's not only an internal -- intentional focus, it's also market dynamics that are going to push us there. So again, as Brendan mentioned, what's fantastic about Blink is that we're able to accommodate both, do both, and we think we address the entire market by doing them.

And the next question should ties into services. It's about DC chargers that Blink owns. The question reads, historically, you've talked a lot about L2. On the last earnings call, you mentioned DC and starting to lean more into DCs. What does that mean for Blink? And can you provide an example of economics, the DC economics at a location.

So I'll start again. I think I'll take the big macro equation for everybody. So Blink actually started out, and they had quite a few DCs, but over time, questions of whether they are in the right place, the right time, the right charger at the right place, right time for the right customer. And we've looked at that equation and as the marketplace has evolved, we've become very purpose-driven in what we are doing when it comes to chargers. So we're not in the beginning. There's a lot of companies out there that we do what's called plant a flag. Let me get as many DCs or other type of charges out there. And we say, "Hey, look, how great I am. I've got this many charters in the ground." Well, we're a revenue-driven company, and we're a publicly traded company. So what we have to do is make on each site we have to make positive economic decisions, and we have to look at station economics. So when it comes to DC, if our evaluation using a bit of AI that we have from a third-party company, looking at our own internal processes and procedures, is that going to have a positive ROI. Now that may come from that you hit a bit of federal funding on that project. You might get capital offset due to a partnership. But whatever that equation is, when we go into the DC fast charger market, we're going into it knowing that we're going to hit profitability on the site at x day. Now the reason why it's going to always be a little lower percent of our portfolio than L2 owner-operated is the return on investment is much quicker on L2. If you look at our average install on L2, since we really went to this dynamic site evaluation process, that revenue per site on that since it's about mid-2020 and on about the beginning of 2020 when we really reinvented how we were doing that is the utilization per charger, it had to be 10% just to get breakeven on our hybrid model. But the average of those chargers that went in the ground now are 15% growing 17% on utilization. Your return is so much quicker because the amount of capital that you put into that equation is dramatically less than DC. So you're always going to see us have a strong position there because we make money quicker but also, we're going to keep going in DC. I think Mike will talk about how we're reengaging in some potential bigger things with DC. So I'll let him answer the second part of that.

Yes. So really, this is about responsible capital deployment. And so as Brendan mentioned, the capital required to deploy L2 is much lower than DC. So what does that bring us? It brings us to when we're looking at DC projects and the capital that's required to deploy those, there are certain criteria that we use. So it's the site analytics that Brendan mentioned. But it's also what funding is available out in the market. There is government funding, there's utility funding. And so what we want to do is find the right site and we want to take advantage of that offsetting cost in order to put those chargers in responsibly. So we started that process actually a few years ago, and it takes a while. I think as most people know, it takes a while to get DC chargers sites up and running. And we now have several Blink owned DC charger sites up and running and we like what we're seeing. And that's the bottom line is we like the throughput. We like the revenue that's being generated. And so that means that I think you'll see us dip our toe into the water a little bit more on the DC side. But again, it's going to be sticking with the model that we've employed, which is responsible capital allocation and making sure that, that return on investment for that DC site meets our criteria. So look, we've led with L2, we've augmented it with DC. We're going to continue to do that, we'll start to see more and more of those DC projects come along.

The question is, are you running any transformer issues? And how long does it take to deploy DC charger?

Yes, I'll start it -- I'll hit it from the macro again as is been our habit on this call. The transformer issue has improved significantly as the utilities and others have worked with the transformer manufacturers to improve the supply chain. It's still in terms of equipment, the longest lead time that we have but it's better. And really, the industry again is it takes a bit for them to structurally adjust and rally when they face the shortage additionally. And we still need to improve that lead time on it, but it's gotten a lot better. And you'll still see some -- depending on the utility in and the utility out that we're still going to have a bit of delays than previously around there but it's getting better, and I expect it to get much better, but Mike actually deals with this daily. So Mike, any follow-ups for you on this?

Yes. I think one of the things that everyone needs to remember is that this is still a young industry. This -- while it has gotten a lot of attention, a lot of exposure but it's still relatively young. So when you look at the population of companies out there, whether it be Blink or other companies in our space, we've all learned a lot over the last few years in terms of the coordination with the utilities, with the sites, with the landlords and that process has gotten better in terms of the coordination between all of the constituents that need to come together to put a DC site. So the industry has gotten more efficient with it. In addition to transformer issue improving a bit too. It's still there, but as you mentioned, it's gotten better. But I think generally Blink and others have gotten better in terms of installing DC sites in a more timely fashion. And you're starting to see those new sites come online more, et cetera.

And what's a perfect location for Blink owned DC charger. Is it a one in a highway? Or is it more of an urban environment?

Well, let me tackle this because I'm very passionate about this topic. There's no question that if you're looking at, let's isolate to a utilization model. And if you want maximum utilization and a faster return on your capital investment, you need to be in the suburban, urban rim. So that is maximum. So let's be there and let's focus on those. Now you may be able to get respectable utilization on a highway site. Now you're going to have to dollar cost average to see how that plays into the portfolio. But we made a decision as a company to avoid sites that are just a capital dump. And if it's not going to have any utilization, then we're probably not going to build that charger even if we have the opportunity to do so. Michael?

No, no, yes, absolutely. Look it depends on what you're trying to accomplish. And what we are trying to accomplish is right charger, right place, right time that's going to provide a return on investment for the company, for shareholders, et cetera. So in terms of the question, the best place to put a DC fast charger is where there's population and where there's traffic. Now one of the things that we've learned, especially over the last 12 months is that those sites can look very, very different. We have a site in Philadelphia right now, which is doing incredibly well. And quite frankly, we weren't sure if it was going to do that well because of the profile of the site, but it actually has wound up being our #1 site that we own and operate. So again, it comes down through the refinement of the analytics around that site and it's about learning from the chargers that we've already installed and what the profile of those are in order to predict forward as to what will be successful and what won't be successful.

What's great about our business is and this is the industry as a whole that's evolving this way is data really sets you free as a company. And when you're utilizing that data to make better economic decisions, I mean you take the stress off because you're looking at this isn't just predictive analytics. This is past behavior, current behavior using that to predict future behavior. And with AI and other great analytical tools, we can really lean into the data. And what we've done at Blink, we've just actually expanded our data analytics team and we're going to continue to do that because they make business decisions much easier. Data, we joke a bit about it. We go, "Hey, go out and get some data". When you're done getting that data get more data. Hey, and after you get that more data we might ask you to go get some more just to make sure that we're not making [indiscernible] decisions, we're not making anecdotal decisions. We're not making emotional decisions. We're looking at the data, looking at future analytics and making a sound decision for the company, for our shareholders and for our employees.

The question is what type of innovations or technological advancements is Blink working on in the U.S. and also in Europe?

Well, we're working on several things, but we're not at a point where we're going to divulge those. We'll say stay tuned to some future announcements as we continue to evolve the company. So we don't have anything to disclose at this time. But we're definitely working on several things, how do we improve the customer experience? How do we improve energy management as that becomes more prevalent and more dynamic both in Europe and in the United States. How will we say that, okay, at one given site, before we entered it, you need -- you only had this much energy available. Then how do you go in that site and say, "Hey, through energy management tools, we can expand that availability of that energy and cost effectively manage it." So you can still run a building, you can still run your HVAC. You can install all this. But at the same energy level, you can do EV charging without doing anything. So these new tools that are coming on, that we're developing that other people are developing, this is really going to make the industry more efficient. And as we continue to talk about efficiency is really -- it's not just internally but it's a go-to-market strategy and energy management and other new developments like that, that we're working on we'll come out. We'll have announcements on that a future date. Nothing to report right now.

Yes. Brendan, you touched on something actually that triggered a thought. So you're often going to see -- so first of all, to answer the Vitalie's question a little bit, you're going to see new products from us on the hardware side and on the software side, as Brendan mentioned, no specifics on this call. But what you will see from us is it's very often that you will see Blink up front. You'll see a Blink brand, you'll see the Blink network, you'll see us front and center. But what we also want to do is make sure that the Blink network is ubiquitous, meaning that it is integrated into other platforms that are out there that customers are using. It would be a building management system. And that customer is utilizing that building management system, as Brendan mentioned, to manage their HVAC and lighting and all of those things tied to building. But why not integrate EV charging into them? And in that situation, Blink doesn't need to be front and center. What we do need to do is be plugged in. So as an example, that building management system not only runs the building itself, but it can extend out to the parking lot to run the chargers and to do things like demand response, energy management, things like that. We want -- where Blink will be up front in some situations, but Blink will be under the hood in many other situations as well.

Okay. Great. Next question is about supply chain. So the question is, where does Blink have its manufacturing facilities globally? And then is there any risk about tariffs. So if there were any type of tariffs imposed, is Blink at risk?

So right now, we have very limited tariff issues within the company. We don't know what the future holds on the tariff situation, but we've positioned the company in such a way where we're out of India for our vertically integrated model and chargers. We do a lot of the base part. There's some fabrication involved in that process as well. There's a lot of global sourcing involved. But what we learned through the pandemic is and Blink really grew through the pandemic. And one of the reasons why we grow through it is we figured out how to develop redundant supply chain mechanisms. So we're -- four years ago, and this is true a lot of industry today as well, is where you have one supplier and you really milk that one supplier and you fed them like we need you to grow. We know where our backup suppliers is, where they are in different countries around the world. It never is an ideal situation but we can mitigate supply chain delays and issues now better than we ever could in the past. We don't necessarily want that to happen, but if it does, we can take advantage of it. Now we have set a system though that we can build chargers in the United States. If we need to, we can build chargers in Europe. And most of the tariff situations Blink can successfully avoid. I'll give you an example. The U.S. buy America compliance. The big issue is can you build a subassembly, right? Because just assembling the various parts doesn't do it, and the labor associated with it doesn't count buy America. But we figured out a way to do subassemblies here in the United States, and there's a couple of reasons why that's great. Because it adds jobs, these are high-tech jobs. These are well-paying jobs. These improve the economy. And we can do that right down here at our facility. And we've committed to the state of Maryland, and we have job targets as a result. So to mitigate tariffs, you have to have this flexible model if they arise. You have to be able to build in Europe and assemble in Europe, build in the United States, assemble in the United States and be flexible about your global supply chain and that's what we're doing today at Blink.

Yes. The only other thing I would add is, in our old assembly facility manufacturing facility here, it's actually kind of right next door to us. They were able to produce about 20,000 chargers a year. And since we opened our new manufacturing facility right down the street, we're looking at upwards of 50,000 a year. And as Brendan mentioned, we can augment that with production in Europe and make an augment of the production, finished goods final assembly, if we so choose to do that in India. So we can expand the manufacturing footprint and the production footprint of this company pretty quickly and pretty -- in a flexible manner. And also when you touch on supply chain, because -- again, because we manufacture those goods, we have more control over the supply chain because we are the ones that are dealing with the component level issues as opposed to a little bit of a barrier, let's say, between us and maybe a third-party company or a third-party manufacturing that sees that. So again, our team can -- is closer to the action, so to speak, on making sure that we are delivering on a supply chain basis.

It's really funny because Mike and I were around here and trying to figure it out in 2020 and 2021, where our predominant mix was third-party manufactured. And what we gained a degree of expertise at is we were starting to source parts for our third-party manufacturers and find these parts from redundant gray market suppliers and everything. And when we move towards building our own charges, this just became an expertise but you develop that out of necessity. Okay, how do we help our own manufacturer here who is building our chargers, they can't find this component, this component. And we went out and sourced them, got them. In some cases, we backstopped it to make sure they had a supply of it, and now we wound it up in vertical integration, and we've become very good at it. So it's interesting because a global crisis it necessitates change, then that change becomes effective in efficiency for other situations if you move forward. So out of a crisis comes good.

And does Blink plant to build its own DC charger moving in Bowie?

Well, it's a great question, and we get asked it a lot. So right now, we do build our own charger. It is a 30- and 40-kilowatt fleet charger. It's predominantly distributed to fleets. A lot of our dealerships are using that product now today. We have our own product design for 240-kilowatt all-in-one silicon carbide unit. That design is solidified. Right now, the question is what is the market for that product right now, number one. How do we get to scale with it, number two. What we're finding is it's better for Blink to have good third-party relationships on the high-end DC end because that product is going through a great deal of metamorphosis, it's getting more efficiencies. It started out with power modules that weren't silicon carbide. Now that's all moving to silicon carbide. It's going to go from -- right now, it moved to an 800-volt architecture, and now it's 800-volt with silicon carbide is the new way. Now crazy enough, people are going, wow, even though there's no vehicles that charge it, 500 kilowatts. We've got ones that people that want that. So that's an intensely moving space, right? We're better to help a manufacturer, help them achieve scale and innovation. And then on the L2, it's much more simplistic. What we -- we always forget about this is that we call L2 chargers, but they're not. They're just devices that convey electricity into the onboard charger in the vehicle. DC fast chargers, they're charges and they do have a direct current into the battery much more complex and much more subject to innovation over time.

The only thing I'd add, Vitalie, is that it's also about price stability. So when we look at L2 versus DC, we see a lot more price stability in L2 and the numbers shift in DC. So you have the power outputs increasing, you have prices falling. And so when you look at your inventory investment you've got to be careful. And again, it becomes a capital allocation decision. And right now, it makes sense for Blink to manufacture our own L2, but as Brendan mentioned, to source DC because we think it's lower risk and our supply chain on DC right now is actually quite good. So there's no necessity for us to start building our own DC tomorrow.

Okay. So last question for our participants, and then I'll ask you a couple of more just as a final one. But manufacturers sell chargers that are compatible with multiple networks. How important is software in the charging industry? And maybe you can talk about it from a product perspective, firmware, but also the network perspective.

So it's key. And there's a lot of focus in the U.S. and a lot of focus in Europe and it has been in Europe for a much longer period of time on the interoperability in all these various integrations with us, the roaming aspects or the product compatibility aspects of it. So when you control your software then you're able to build a new technology stack that, as Mike has referenced several times in his statements, where you can plug and play other technology into it. Now whether that's someone's fleet system or, as Mike mentioned, the building management system, et cetera, it's key. And everything we're doing in our technology stack is to be able to adapt to somebody else's technology in a new and innovative way. We don't have an old network. I mean as a matter of fact, our network is still developing daily at our production teams in the U.S., Europe and in India, where the bulk of our developers are. They're developing new features, advantages and benefits in the network every day. Based on what our customers are saying, we assess it. We say, okay, here's the time we need to deploy that. The key for a company like Blink is to stay flexible, is to be able to say to our customer, yes, we can develop that. It is cost effective to be able to do that. It makes sense. And then it has a play or a scale to it for our other customers out there and that's the way we look at it. So we're going to continue to evolve and develop there. We don't see a future in which we're going to go to a high degree of third-party developers out there, we're going to contain the cost on this and preserve our margin. Michael?

Yes. So I would say software is incredibly important in this industry. And for us, there's really four areas that it touches upon. Number one, it's the mobile app that drivers use every day to find and charge at a Blink charging station. So the mobile app needs to be great. The second thing is the Blink network platform that our customers use in order to understand the profile of the chargers that they have installed on site and all of the reporting that comes with them. The third is the firmware development on the hardware itself. So on the charging stations itself. So again, where things in the industry often break down, it's when the network and the charger don't talk to each other properly. And that's largely on the firmware side, which is the software that runs the charger itself. So again, we own that. So that's the third piece. And then the fourth piece are -- is the software -- is the API software integrations, as Brendan mentioned, is this concept of integrating. So we need to be good and not just good, we actually need to be great in all four of these areas. And the team knows that and they're focused on that and look, nobody is perfect, but look, we get better and better and better every day. So as Brendan talked about, it's Kaizen, it's continuous improvement, and we're going to continue to focus there, and we're going to continue to invest in.

Great. So we're done with questions from participants, but I'd like to ask you a question as your last question today about you.

No, no. Here we go.

It's a vision question and I think it's important for our participants to hear it, and we'll start with Brendan. Brendan, you always talk about the team, right, you talk about the team and Blink, but the team talks about you as a veteran. I think I could explain a little bit. Many people think that Tesla is the first mass produced EV in U.S., but also the world. But in fact I think it was U.S. Nissan Leaf. And you were at Nissan rolling out the cars to the North American market. So that's the first. And I think when you were at Leaf, you were actually sponsoring some of the early networks, you were helping them implement the chargers, roll them out. You spent a number of years to electrify America and you've probably installed numerous, numerous or large amount of number of DC chargers, and we know you also spend some time at EVgo. So you've been around, you've seen the industry where it started. And the question is, where do you think it's going? What's the next tipping point or what's the next frontier that charging needs to get to?

So it's a great question, and I say that a lot, but the great thing about EVs and the great thing about EV infrastructure is where we are today and then where we have to be tomorrow. So let's go and let's drive that analogy back to the Model T, where we're going way back, the first mass produced internal combustion engine, right? And when that car came out, it had a very low efficiency rate, it was brand new. There wasn't any innovation in it. It was very mechanical and clumsy and completely inefficient. But that's the way the mass produced internal combustion engine started in the United States and globally. Depending -- we get in arguments of who started mass produced internal combustion engines, but there's some other manufacturers that claim to fame, not just Ford on that. But when it began, you think about the technological advancements in internal combustion engines where they went and where they're at today and look at EV and EV infrastructure, and we're still at that infancy. We're at that very, very beginning. So think about the future over the next 5, 10, 15, 20, 30 years of what we're going to achieve. And you see this bright, beautiful future and part of that is new jobs. Part of that for countries like the United States is energy independence. It's domestically produced energy that creates more jobs throughout the energy sector and its new spin-off technologies. The ecosystem, when we started back in the day with the Nissan Leaf, and we said you have to charge this. People looked at us like what he is talking about, I got to charge it. I fill at a gas station. We don't know we need to plug it in. We got to sell chargers, and we had to explain all that. If you look at where we have to go in future years, with this new technology and the amount of new revolutions that are going to happen. We go from a charger in a vehicle to a charger in a vehicle and an energy management system. We go from a charger vehicle energy management system to big batteries as a mitigator of demand chargers as a storage limit. Then we integrated into solar, then we integrated into microgrids, then we help the country develop distributed energy management that are more efficient and less drag on the grid as a whole, this has exponential growth. We can really revolutionize the way that energy is used and dispensed in this country through the electrification of vehicles and the electrification of all modes of transportation. So when you take that concept and you lay it down in the business model, you see nothing but promise. There's very few things that stand in our way. Sure, there's going to be setbacks, sure, there's going to be political fights. Those always happen. But when you look at historically, over time, when you latch onto a technology and then you invest in that technology, it becomes dominant over time. China is at 50%. Europe hovers between 20% and 25%. We go between 8% and 10% and the world's fourth largest economy, which is great state of California, they're 20% to 25%. So this future is incredibly bright. This industry is going to grow exponentially, and we're happy to be a part of that. We believe fundamentally that the future for Blink as well as the future for the industry is going to be very, very positive.

Can I add to that?

Please.

All right. So I think like when I look at this industry, I see -- I think about it in terms of the consumer. And the consumer says, there's not enough range. There's not enough range in the car, and that's why I'm not buying it. We hear and read articles about uptime and the challenges associated with uptime. And the third is we hear naysayers talk about the grid and capacity of the grid. So number one, when it comes to consumers, the last time I checked, the OEMs were developing new products every day, and they know that range is an issue for consumers. And guess what? The battery technology is getting better, the range is going to get better, that is going to get solved. There's absolutely no question about it. The second thing is charger uptime. Again, this is an issue that is front and center. It is an issue that Blink talks about every single day as to how do we ensure that, that network is up and running. And by the way, it's challenging because we have direct control over the chargers that we own and operate. So we can repair, replace those things as will. But we also have a whole population of chargers that we do not own that's somebody bought. So we need to figure out a way to wrap that all together. And the third is the grid. And this may be too simplistic, but I believe in American ingenuity, I believe in American invention, I believe that where there's a problem that sits out there and grid capacity is one that guess what, people are going to solve it. So I'm not worried about any of those three things because I think that they will be addressed. And when you look at Blink specifically, we think about our mission, our vision and our values. And our mission is to be at the center of the transportation, the electrification of transportation, and we're right there. And our vision is to ensure energy independence for all. I mean one of the beautiful things about electrification is that it's all -- electricity is all produced here in the United States. We don't import electricity from another country. So when you talk about energy security, electrification provides that. And when you talk about our values, what Blink talks about is listen, learn and lead. We listen not only to our customers but to each other internally. We learn from those conversations and that feedback and that enables us to lead in the market as a company. So that's what I'm really excited about. And look, the future is super bright, I wouldn't be here if I don't think so.

It's incumbent on me to leave with a final remarks. And this is true at Blink and this needs to be true, and I believe it is becoming true everywhere that there's not one person. It's not. And nothing gets done with one person. You can't be a me guy, you got to be a we guy. And you have to invest in and at Blink when we retransformed the company, that was the first thing we did. We put the emphasis on team, in collaboration and decision-making and fact-based decision-making. We developed our leaders from within and we promoted our leaders from within and helped them take on new challenges and continue to develop. And that's why at this point in time, when you're asked, okay, what about this transition? Well, Blink is positioned so well for our multiplicity of transitions because that's our philosophy is that you're going to get there as a team. The team is going to get you there. Make sure they're working together, provide them the resources to work together, provide the culture where the freedom of ideas flows. Don't get angry with someone or come down on someone if they make a mistake. Let's remember, we're all here, and we're all bright mostly because of the mistakes we've made, not because of we started out and we had all these great successes. We learned and we learned from our own mistakes, and we create opportunities, and we learned as a team from our mistakes and create future opportunities. That's the essence of Blink Charging today. And I believe, as I depart in late January, that's going to continue to be the essence. Listen, learn and lead. Those are our core values as a company, and we're going to continue to embody that. Mike is going to continue to embody that as the future President and CEO of the company. And I'm going to sit back on an Alaskan cruise somewhere, happy to see how great the company is doing and see the stock price elevate due to all the efforts of the new team. Thanks. Vitalie, anything else for us?

No. I think this is a good note to end. And I actually do remember both of you pointing to the fact that there's no letter I in Blink. If you look how it's spelled there's no letter I in it.

There's no I in Blink.

So I'll let you -- we are closing on this note, but we would like to thank all the participants on the webinar today. We'd like to thank Brendan and Mike. Congratulations to both of you, and thank you to our team in Bowie. So at this time, we're going to conclude and we got some more questions in the last couple of minutes, but we'll make an effort today and tomorrow and respond to them via e-mail or maybe phone calls, but we're open at any time, please send your questions to [email protected]. Thanks again.