ChargePoint Holdings, Inc. (CHPT) Earnings Call Transcript & Summary

Okay. Great. All right. We're going to go with -- start our second presentation virtually with Pasquale Romano, CEO of ChargePoint; and Pat Hamer, who is also available for the Q&A as well. ChargePoint, to say, there's been some volatility in ChargePoint stock recently would be an understatement. There's also a lot of discussion around what the value of charging infrastructure is going to be in the long term, maybe we can cut into some of that.

Pasquale, just start off. I have this headline stuck in my head, which was from the Wall Street Journal last week that Tesla has won the EV charger wars. That sort of...

First of all, I didn't know there was a war.

So we could talk a little bit about why there's not a war, and we could talk about like what exactly is going on. I mean there's obviously been a lot of news around just charging tie-ups in general with Ford and GM have raised questions about what is charging infrastructure going to look like in the U.S. and maybe to a lesser extent, Europe over the next 5 years? So maybe just start off talking about what -- as electric vehicles proliferate through the United States and Europe and other places, what exactly do you think charging networks evolve to over time? What's the bigger picture?

Let's start by kind of defining what a charging network is, we're kind of a hybrid animal. We don't actually own chargers or sell power. We're not an asset owner, right? So I think the biggest split and one of the biggest confusions in our space for investors is understanding the difference between how to think about and measure someone that's trying to own assets and sell power that's return on assets model. And it's only good in very few use cases because there's only very few use cases where that pencils. And then there's the technology providers, there's a lot of pure play hardware providers, were not bad. There's very few, if limited to actually just us globally, where we're the only company regardless of size that's in every vertical of EV charging with a complete solution. And what we do and why we masquerade as an asset owner but are not, is we enable every business regardless of the -- how they want to tie in charging to their business, that's where sometimes it doesn't pencil for an asset owner, but it pencils for a business. We enable that business to rely on us to provide charging in their parking lot, but they pay us for it. So we don't have to put out the capital. That's the only way to be relevant. There are so many different scenarios where car's fuel, this is another thing that's broadly misunderstood, where EVs haven't penetrated that deeply. You would think they have given the amount of notoriety to get in press, which I think is awesome. But very few people have actually experienced one and driven in one. And if you live in a area like Silicon Valley here, you think everyone has decided to buy an EV. I mean you can't throw a rock without hitting 6 EVs as they go by, in fact, the nice cars becoming something that is less and less even noticeable in the high-tech area that we live in, which is a tiny little place. You don't drive around until a little yellow light is on and then go fuel. That's what you do with the gas car. Electricity, you can dispense it anywhere. It's not controlled like gasoline. So you don't onboard your fuel in something that looks like a fast charge network. That's good for when you're driving behind your battery range. But you're not going to use that. There's, for example, foolishness that's been talked about, "Oh, well, people that live in apartments will use fast chargers." Well, yes, they drive incidentally, but then in New York City and they drive their commons every 2 weeks to go shop, I'm sure, where they works fine. If you drive every day, you commute to work, you'll stick with an nice car until your landlord decides to allow charging in the parking lot because it's too big a pain. You have to have access to charging where you sleep, you have to. If your car is mission critical to you every day, so you got home, you get multifamily. You've got workplace charging, which sometimes is a proxy if you have limited access to off-street parking or street side, good street side systems if you live in the city, right? So workplace is also very important. It's important in suburban areas as well. And then where you shop and where you top up because you're never really fully charging your battery, you don't really think about it that way within electric vehicle you're topping up. And then when you're only driving beyond your battery range, that's when you reload typically at a fast charger or using a valet in a hotel or what have you. And that's where all this conversation is, and that's about a 10% volumetric fuel dispensation for the vehicle -- 10% are far less segments because you're taking big bolts when you're at a fast charger. But it solves an incredibly important use case, which we're in and are very committed to because it can be the #1 buying objection for a consumer on a vehicle is, can I own this far as my only car, can I take it on a long trip? Can I go anywhere that I could go with the gasoline car because it's the second biggest financial commitment to families everywhere, it's your vehicle next to the house on. And so you've got to make sure that you can do everything you need to do. And that's why it's so critical, but it's not the volumetric. It's not volumetrically or charging session wise, the preponderance of how fuel is going to get [ this passed. ] It is not I'm talking against the segment. It has wonderful -- it's got some wonderful aspects financially for us but it's an over focus. And then the asset owners are kind of concentrated in that space because that looks more like the gas station, but where I think that goes because that goes to the typical cross subsidy with amenity brands, food service brands like retail brands, et cetera, because that's where gas station when a driver needs something to do. The driver is going to be there 20 minutes, by the way, it's not going to get much faster than 20 minutes, even if the car could take it. A little anecdote for you, Steven. A gas station, typical gas station in the United States is more in an Europe, it's about 8 pumps. To emulate the full time of a gas station, you need about 1.5 megawatts per pump. Per pump, you would need 10 megawatts of energy and by the way, the utilization isn't spread out. So at peak times, there's a line of cars, so good luck using storage for that one. You are not going to use battery for that one unless you have containers a battery on a site that are bigger than the site itself. So think about the size of the gas station. You can't get back to that model. You cannot [indiscernible] people. And I read an article this morning, some new battery technology that promises 6 minutes charge time, I believe that one I see it, 6-minute charge time, it doesn't matter. And the reason it doesn't matter is, you can't give the energy into the battery practically, you could create some rarefied sites to do that. But on a broad basis, you can't do that. So you're going to be there for 20 minutes. It's a really well-aligned thing for an amenity brand, and you're not doing that often. It's only when you're driving on your battery range after about 3 hours of driving, you stop, you buy something, typically refreshments or whatever and you're on your way. So we think it goes to cross subsidy with the 30-minute retail economy, and that's where we're focusing our fast charge efforts for projects.

No. So that's great perspective because we are -- we do -- and I would be guilty of this, too, is focusing a lot more on the fast chargers. And I have a Polestar charger in my garage and I would say, I drive out a battery range maybe once a month, where I have to think about my highway driving and where I'm going to charge off. Having said that, and I agree with you on the point around the commercial partnerships because now I know like when I charge and I stop at a Sheetz Convenience Store, now I know the entire menu for breakfast, lunch and dinner because I'm there for 20 minutes. So I'll buy something. Having said that, on my last trip, I hit -- I thought I was stopping at the Sheetz and the Sheetz was gone. It was being redesigned and torn up and turned into a bit of a charging desert, which I was lucky to find a ChargePoint charger like a few minutes away, but it added an hour on to my trip, while I waited to charge on a slower charger. So I guess what I'm wondering is like when people -- and there's people out there that drive more than I do, maybe spend their summer driving around the country, is that infrastructure ever developed do you think? Well, we're to the point where, okay, I can map out every 50 miles, I'm going to be able to like charge off or at least get a boost to get to where I'm going?

Yes, it is. And so let's just put things in perspective. I think humans -- I'm guilty of this, too. We're impatient animals. So we ignore something until we need it, and then we're like, this isn't good. We are 3% or so penetrated into the U.S. fleet with electric vehicles. We have pretty good infrastructure for a 3% penetrate -- for a 3% use case. We have pretty good infrastructure right now. It's actually a very good and where it's heading is by the time it gets to 10%, it's awesome. It's fantastic. So let's put it in perspective, also let's take your Polestar case. Polestar happens to be a very close in-dash partner of ChargePoint. They were -- they are the Google car, and we were the first company to work with Google and actually, Polestar as well, it was a 3-way partnership to develop a charging application and the templates for how charging applications work within Android, the Android car operating system. That's not Android Auto, that's in a Polestar or Polestar 2 anyway. That's actually a native Android operating system in the vehicle running the infotainment system in the vehicle. So you'll notice there's a ChargePoint app that you can add if you go to the App Store into Polestar -- exactly where charges were in real time. And it would have told you that one of the Sheetz wasn't there anymore because it wouldn't be shown up on the list. So -- and you can directly select it and it will flip to your NAV system, it will flip to the Google Maps NAV system that's in that vehicle, and it will take you dutifully there. You can also filter on charging speed. If you don't want to see the AC charger that could stop that because you have to wait a little longer, you can hit the little button and immediately filter on DC, and that will give you a list of all the ones that are nearest to you. You can click on the one you want to go to and boom and it NAVs you there. So there's a bit of education and habit that drivers have to understand. I will give you another sidewinder that I don't understand how people don't understand this because we're very clear about it, but it just tells you that you have to communicate repetitively. Our mobile application will show you every single charger we run with, which is virtually everyone in the United States. So it's a connected charger, it's likely on our map. It's not just ChargePoint. As much as we say that, as much as it's very apparent in the filter settings in the app and all that sort of stuff. A lot of consumers don't understand yet, but they will, that app will show the many things. Because we don't really care. What we want to do is foster the adoption of EVs. And we don't think that anyone is going to bias their trip to charging. I think that's crazy. You hear that on conversation, how are people are going to buy their retail choice to where chargers are. Maybe a little bit, but not too much because if you have a favorite hamburger in your way, that's where you're going. As long as it's not existential to your battery in terms of where you're driving it, then you might not. But for a roundtown stuff, you're going to go where you go, businesses need to put this stuff in and it's convenient if it's on a network that people really understand. That's where our network effect comes in.

So just -- that makes perfect sense. But in terms of what the world would look like in terms of the gas station model, which you made a good case for why it's not the most important thing to watch. I mean, Tesla only has like 12,000 chargers in the U.S. There are a lot of other networks coming up and U.S. companies are announcing partnerships with Tesla as sort of the be-all and end-all is the perception, which it isn't. Like how many networks big sort of say, national networks does the U.S. need? I mean, is it only one, does it need 3?

I mean we could say that just about anything, at any segment, right? You can say that about any segment. All I can tell you is where we think it goes. Where we think it goes is amenity brands aligned with about a 30-minute -- 20- to 30-minute well. So we named it the 30-minute retail economy. Inside that 30-minute retail economy, what we want to do is enable each of those brands to have charging that's branded their brand co-branded ChargePoint. When you have a Visa card, it's got the primary issuer, the bank or the airline or wherever you've got it, primary brand but on the back, it's got every network that you can use someone else's ATM. It'll tell you on the old days, that matter. Now, everyone just uses -- everyone interoperates with everyone in that space looks anymore. There's a lot of little sub-brand logos on our credit card. Think of us as that. The driver knows they can use their ChargePoint credential, the brand on the unit might be whatever the convenience store or food brand is, right? And so we think it -- and then the driver is going to say, "Oh, that was the pickier Yum! brands' sub-brand, right? Or that was the Chipotle charger or that was a 7-Eleven charger." Well, it's all on ChargePoint, and that's all we did. We're trying to link it all together. I don't think national ownership of an asset that sells power disconnected from a cross-subsidizing brand with much higher gross margin on the other things that it sells, I don't -- I think that's a short-term. I think there may be some fill-in in rural areas where everyone wants to put a retail store or what have you and maybe some coexistence of hybrid model where you have independent chargers in the back 40 of a big box store parking lot that have no bearing on the big box stores business and no connection. But I think for the most part, where drivers want to stop when they're on a trip in some place with maybe a security camera, a canopy, a bathroom, to buy something. I don't know, that's what I really used to do with the gas car. I've kind of detrained myself since I've driven electric. And now I have to literally on some of my stops, have some friends in Southern California. I have to walk like 3 blocks to get to a Starbucks [indiscernible] today phenomenon, that's on today's phenomenon. We all think we're looking in the future. That's actually not a good consumer experience. And good consumer experience is, you drive to your favorite pick it. You pick your favorite amenity brand. There happens to be charging close to the building. There's someone in the building that knows you are alive, right? And in the [indiscernible] safe, there's typically a security camera. There's a bathroom. There might be windshield washing capability in here as when you drive to the mountain, sometimes that's necessary. And so it starts to trend in fact in that direction, this -- I'm going to put a bunch of chargers disconnected. Then you have to make all your money by putting your gross margin on power. It's too hard. And by the way, if you're next to someone who's cross-subsidizing, let's say you're only making money on power. This, by the way, we're talking about not our business model, right? We're talking about, we're feeding the tech. So I'm selling chargers and network licenses, not attached to power. We make no money on power. We are not utilization dependent either. So let's say a burger joint buys our chargers. They're paying us a fixed fee per annum to keep that charger on the ChargePoint network. It's de minimis with respect to their O&M for that charger, right? They're paying us a recurring subscription fee. They're selling new power when you go there. They may put 5% gross margin on that power, just so they breakeven on the O&M on that charger because they're making 70% gross margin on what they're selling you, because they know the prices in that location. Now if you're only selling energy, you have nowhere to go to make money except the margin on power. That's the challenge in the long term, right now because of scarcity that actually works. But in the long term, I don't think it works. We don't care because when we're enabling those amenity businesses just like we're enabling workplaces, just like we're enabling everything else. We'll sell you the gear and a network subscription, we will not sell you the gear without it. And we'll get that subscription and click in along. We're already over $100 million ARR in our SaaS business. $100 million-plus ARR as of Q4, right, just clicking along, a 3% penetration on vehicles. Imagine how big that SaaS business is when you're a 20% penetrated. Now, we're not talking about fleet yet.

Yes. Now we're going to come to that. But maybe we move on from that, I have noticed to your point, like when I charge like a Sheetz or something, no one stays in their car. No one is just sitting in their car charging, everyone just -- even if they're not going to buy something, they might as well look around, maybe I'll buy something.

Right. In fact, by the way, it's also -- I actually think this is awesome for retail brands. It's not good for gas stations. Gas stations don't have the most, don't have the parking. You know you need 5 times the stalls or so, get the same throughput at peak times if you're only serving long-haul driving, you're there 5x longer right, than a gas station, seem 5x the parking just whole pull through with the little canopy and 4 little things with 2 pumps, that don't work in EV charging. Today, it does where you can pull out one of those pumps and put it in charger and lap a 3% penetration. When you get any penetration at all, you need like 40 stalls. So it's perfect for food service or a light retail brand in a shopping area close to the building where you basically put those stalls and into building, it's a wonderful thing. You've got to have a parking. So it's a rearrangement of long-haul service real estate. It's a large issue.

Yes. That's helpful. And then just one other question on this whole debate with Tesla. How big of a technical challenge is it to offer NACS adapters for you guys on Level 2 to DC fast chargers? Is that -- it's zero, you said, right?

Zero. I mean, it is zero. I mean there's -- we're right now -- you're going to stay tuned for some -- we made an announcement that the installed base is protected. So if you're not, if you have a ChargePoint charger, we want to add NACS support for it. And we've got some novel ways of adding into so we don't lose CCS. So remember, we monitored every car. Our last -- the last thing we would suggest to a customer is to just flip to NACS because then you've abandoned CCS, CCS cars out there for a bunch of years. So you've got to have a solution that handles both. At the same time and you don't want to dedicate a parking space to NACS or CCS. By the way, I want to make T-shirts for the industry. I'm not really biased, NACS or CCS. I want to make -- please just pick one. T-shirts for everyone in my industry, aware, because we're all aware of the trade show events. It's all CCS in Europe. Including Tesla, it's all CCS in Europe by regulation. It's awesome. I only have to think about one thing. It's a good consumer experience. There is no functionality difference between those 2 connectors and a Tesla and a GM or a Ford car are going to speak CCS over the NACS connector. So it's the same protocol. We have modular connector cables on literally everything, but one legacy commercial AC charger, which has been charging Tesla's, people have a little adapter, right? That Tesla ships with so it's a zero issue. And for the fast chargers, every single one we've ever shipped is upgradable cables because we have 1 million different cable types that we have to support all over the world, right? CCS 1 to CCS 2, et cetera. And then any -- all of the weird third-party things like pantograph for buses in the fleet space and stuff -- all interface to our modular cable interface. So 100% of it is not -- I mean, it's just something that's built into our systems, and we're going to announce very soon the availability and pricing on those upgrades for the field population. And then obviously, you can order new stations with built-in NACS support. Headline, don't lose CCS just yet, right? And please, if you're seeing an auto OEM, it doesn't matter. Just say, please pick one.

Yes, that would make life a lot easier. So like what are the meaningful technical challenges that ChargePoint faces like just to continue to advance your roadmap.

The meaningful tech, this is -- I was talking to actually one of our Board members yesterday on a different topic, and we were talking about kind of some of the focus areas inside the company and where we're putting our energy. Just like this question, we're constantly having that conversation internally. If you remember, he pointed something out that I didn't even [ grok ] until he said it. If you remember the early days of Tesla, they started when they were bringing manufacturing, they're like their internal systems and their internal process. And for them, manufacturing is much bigger deal because you're making a car. It turned from all the great technology they have developed to all great infrastructure, they have to lay to be able to actually service the industry, right? Everything from innovating on service because dealers, integrating on kind of zero touch fully electronic sales process all that sort of stuff. Well guess what, we're doing exactly the same thing. We focus inside of ChargePoint and the biggest technical risk is scale. For any charging company that's similarly situated to us. If you're an asset owner, you're not going to own that many assets anyway, it's on an account basis. It's a relatively small thing and then you kind of modulate about how much capital you can raise. But for us, it's kind of [indiscernible]. We've got the whole market there and we sell in every vertical. You have to be able to handle thousands and thousands of thousands of customer onboarding. They potentially bought it without knowing it through a channel, and you get to full educate him on all the software features. And you got to fully have mobile app and 30-second video, 30- to 90-second video clip enable training for electricians so they can make the right choices, right, and all that stuff. Just think about how much energy is going into support automation, channel automation, installer automation, customer onboarding automation at ChargePoint. It's so front and center to what we're thinking about operationally because the hardest -- the biggest risk we have to scale is not demand. When you look at our growth in what is one of the worst macros we've seen in a long time, right? It's still quite stiff. And so imagine what that growth rate does to pressure your internal systems and your ability to handle your customers. So what I like to -- I'm saying this affectionately, I call this suffering the burden of customers, and I don't mean that in a negative way, a company needs to learn and embrace suffering the burden of customers because it becomes dominant. And if you let it get out from our view, it not only comes at you, it just subset all of your bandwidth and attention plug-in holes, if you don't deal with it systematically and then you can't focus on innovation on the innovative side, and you fall behind, right? So either that or you fall behind on market share because the deals are there, which you can't catch them all because you can't handle the scale, you can't handle the manufacturing volume, you can't handle the transaction volume, your business systems fall over, et cetera. So that's the biggest risk to our scale. It's not tech. It's not who wins the connector work. Be careless, right? Just pick one, please. In fact, I think we're going to make some money on that T-shirt that we put on our web store.

I'll buy one.

Yes. I'll buy 10. But that's the biggest issue that we have. And I don't think people understand how mature ChargePoint is. Just -- I mean, just looking at the revenue level, the transaction level, predictability that we've had, I think we've been pretty good performance relative to guidance. I think we've done a good job over the 2.5 years or so we've been a public company. And I think that matters. I think that matters a lot in terms of being an investable asset in the long term.

And so just to summarize, the thing that you're worried about most is just as you scale, like servicing the channel, installations go easily, continuing to stay in front of the customer because the roadmap, not that what you're doing is easy to build, but that the roadmap is a lot easier, better to find at this point?

Well, It's that. Yes. So the innovation machine at ChargePoint is 15 years old. We have internal machinery, you can't proceduralize innovation fully. But we have expertise. We have a lot of very specific vertical expertise in charging, in every aspect of it, from user experience all the way down to the protocols, the idiosyncrasies of every OEMs, interpretation of the standard to talk to vehicle to make that seems right. So we got all that expertise. We're going to continue to innovate like -- in that space. The thing as a company knows how to do that and the innovation there is not proportional in the core product to revenue, whether you're selling one copy or 1 million copies on a piece of hardware or a lot of software features. The people actually writing that stuff and designing that stuff don't necessarily deal with scale or certain aspects of design for scale that you have to have. But it's not core. You're innovating because you're thinking about what features and what functionality and what new things that you want to bring to market, but that's not pressured by how many copies you sell. But everything else is.

Makes sense. Maybe just shift gears a little bit. We started to allude to fleets. I think a lot of the numbers that can thrown out about charges don't really consider what fleet demand is going to be? It seems like it's just not really counted whether it's Uber or a commercial vehicle or electric bus. How do you think about the fleet market? Do you think about it separately, like you just described and how you go to market and how it's going to develop?

So the odd thing is I used to think about it separately and now I've realized it's not that separate. Okay. And the reason is, we're seeing a lot of cross vertical, a lot of fleet bleed over in the commercial and vice versa. I'll give you a couple of examples and then we talk about fleet. So it turns out that a lot of fleets and let's -- obviously, you mentioned ride share apps. Ride only apps like Uber and Lyft. And that's a tiny part actually. It's a very tiny but it is important. It's a very tiny part fleet. And by the way, as that gets more and more cost effective, you'll see passenger car sales decline, so that somewhat trades not completely, but somewhat trades for the long term in TAM for surveying passenger cars as we reduce our dependency on owning as many vehicles. We have 208 million vehicles and not that many drivers in the United States, right? We only have 330-some-odd million people that live in the U.S. So we like our cars, and we have extra. And we won't have as many extra as we do now because of TNCs in the long term, I think 15, 20 [indiscernible] Remember, ChargePoint is 15 years old, so I got to be worried about the next 15. So the thing with fleets is a lot of them don't want to own all their CapEx or their light commercial, meaning you take your pickup truck or your delivery van home and they want reimbursement. So the meters that are utility great are our home chargers, every one should. And we have a huge home reimbursement for fleet software service that we sell. We pioneered it for lease codes in Europe that provide company cars as part of your compensation. About 20% of vehicles in Europe get to you that way. It's a big part of it, it was tax effected there, but it works there. Well, it turns out that a lot of fleets globally want. They're like, wait a minute, you can do that. Yes. So the behind the fences application, that's awesome for the stuff that returns to base and is behind the chain link fence, and we can charge it up ourselves. But we send -- for the subset of the fleet that is take home, we're also making use of that reimbursement service. So we're seeing a lot of cross-vertical subsidy, which is why I always say you have to be in every vertical or literally everyone if you want to survive in this space because we're seeing a lot of our retail customers that started out with customer parking for their customers say, Hey, wait a minute, now I've got some box trucks that I'm using from my local distribution center to my store, I want to be -- I want to add that charging. Can we make -- can I double duty -- and the fact, I'm going to put a fast charger out there. Can I double duty the fast charger or even the AC chargers? So overnight when the store is not operating and there are no customers, I can part my trucks there? Yes, you can do that. It's all on platform. We have that capability. So there's value in being in both commercial and fleet that you can't get unlocked unless -- now, fleet in on itself, much higher attach rate of ports to vehicles. This is the key in the consumer space. If you look at the Nordics, if you look at our long-term statistics on market, it's about 15 or so chargers per 100 vehicles sold outside of home chargers. It's a different ratio. So it is the commercial application for buying during, even though we sell home chargers, the commercial applications for chargers for passenger cars, for businesses buying separate passenger cars, that's about a 15% attach rate in total. Okay. And full electrification, we don't know exactly where that's going to go. But right now, it's for the foreseeable future sitting at around 15%. For fleet, much higher because they want to sequence the chart. They don't want to have -- it's just too big a challenge to have to decide where to park a vehicle, a business work. So they want to be able to park a vehicle and then have energy dispense to that vehicle at the right rate and at the right time for next day's routes, but no more because you want to optimize for the utility interface that you have and the well time that you have to minimize the cost. So now you've got a much higher tax rate, the long-term attach rate we haven't settled on yet, but it's really high, meaning it's pretty much a port per parking space. Now, is it a DC dispenser or is it an AC, well that depends, like the USPS deal or part of. That's all I see. It's all commercial, there's no DC in that deal, right? There might be in the future, but there isn't right now. It's advanced so we'll verify. A lot of delivery is going to be that way. Stuff that is high-duty cycle, it's larger, and that's going to be medium and heavy, yard haulers, for example, yard haulers and ports, all DC, 100% and they've fixed well, right? And so everything is calculated and that's literally a dispenser for parking space for those yard haulers. And some of those yard haulers are already automated. They're not driven by a human. Some of them are on top.

And that's not really -- so there's 2 points in there. One is that we should think about how the corporate car in Europe allowed you to develop skills that are now translating into fleets over here that we weren't thinking about noncorporate cars. And then the second point is that to my question, you're saying that there's this whole fleet market that's separate from everything else that has been talked about?

And so if you think about a Venn diagram of fleet and commercial, we thought before the Earth was a fiery ball, when we were designing what we thought the world was going to look like. We thought the circles were not overlapping. It turns out fleet and commercial overlap the Venn diagram overlaps, not fully, but it overlaps. The other overlap case is a lot of fleets that return to base for primary fuel but are still out and about what reimbursement when they use a charger over the road. If there's a long route, an occasional long route, where they need to onboard some fuel because they're going to be on the battery on electric vehicle or maybe it's cold in the winter to full weight load and they're going for. So in that use case, they've got to reload somewhere and they have to use something that either we run with or not. We have all the reimbursement services for that. So that driver just taps their mobile phone or RFID card, whatever they want to use and/or it could be built into the driver, the driver systems, they effectively all use tablets now. Software integration directly with the route management system that's guided the driver, and they can stop fuel even if it's not on a ChargePoint charger, it doesn't matter, and we can reimburse those charges we can build those charges. We can pay the network if it's not our network, and we can log that back with the fleet owner. So handling over the road even in a generally return base operation is an important aspect of it.

Interesting. We are running a little bit short on time. So I just want to hit on a couple of other things that I probably should have asked about this before, which is everyone is asking about the -- what's Tesla's relationship going to look like? You announced at CES a major relationship with Mercedes-Benz. Can you just sort of talk about how that's going and how that fits into sort of maybe the Venn diagram, the new Venn diagram that you're talking about here?

Yes. Well, look, I mean Mercedes was interested in making sure that there was a premium charging experience in good sites because they're only selling into the luxury segment, right? So they're like, look, everything we do at Mercedes-Benz has to be a step up. It has to be great. And so what they wanted to do is subsidize effectively on an overlay network. It doesn't mean that it's an island unto itself. It's on the ChargePoint network. You think it has full rolling capability. We've been just like I described in-dash systems with the full story that you drive. We have that with Mercedes-Benz too, and so we're fully integrated in the In-dash and Mercedes Me app. So if you use those, you're effectively throwing the levers through ChargePoint to affect your charging. So while we may not -- and those charges obviously be co-branded primary ground, there's Mercedes. They're putting a lot of the funding in, and they're doing this for brand awareness as well as user experience, they'll be a very good sites. And they're also -- they really care about making sure that in exchange for that subsidy that they can have some preferential treatment for their drivers. So the Mercedes drivers will be able to, as they get within about 10 minutes of the site, it will lock a reservation at one of the free ports. So that's yours when you get there. It's yours because you'll see that it's reserved by the way. We've had reservation capabilities and waitlist capabilities in our software for a long time. So we know all the use cases there. So you'll have a nice premium experience where you can pull in and then we can take that software integration in the In-dash, and we can start to extend it over time. for bigger and better things to make that a real premium experience. That's their intent. It's not only to charge on that. It's to charge everywhere. We're enabling them to charge everywhere on everything but to make sure that there's a core network that really has a Mercedes value system applied to it. And so that's what we're doing with them. And then other auto OEMs, we typically engage across the board either in -- it can be any combination of the above. We offer home charging programs, which we have with many, many auto OEMs. We offer in the API integration to their mobile app and their in-dash experience to drive their entire charging experience. It still looks like it's coming from the OEM that should, right, because they have to look and feel consistent with the rest of the vehicle. And so we do that. We outfit dealerships if that's part of the equation if not OEM wants us to have a blanket program they can roll out to the dealer groups that sell their vehicles. And [indiscernible] on other things. So we tend to be pretty full touch there. By the way, on the Mercedes side, that driver has any issue, guess who's answering the phone?

Mercedes.

Us.

Oh, you are. Okay.

That's what we do. So we take care of drivers, right? And we just take care of the driver for you. So we're dealing with all that support. We do that on our network, too. Guess who's responsible for the uptime, us and M&A who is the infrastructure finance partner in that particular deal working very closely together. O&M basis recovered, so we have bulletproof uptime on those stations. So that's what we do. And we've done that before for -- we did the Volvo or Starbucks corridor. That's what being built out, just so we did that. That was from Washington State down to Colorado. So kind of a showcase corridor there. And we've done tons of corridor work all over the United States for that particular fast charge segment. And then it's supported by everything else we do. So the auto OEMs get the whole kit. Even if it's not in our network, their cars are enabled to charge on it and then we just deal with the convenient build back to the driver.

Interesting. So maybe just to wrap up, we've touched on a lot of misconceptions about just your business, charging in the future, charging today. How would you just sort of -- is there someone who may be a senior stock very volatile and is thinking longer term, what is the biggest thing that they could take away about why ChargePoint is going to continue to win?

Well, look, I mean, it's -- you've got to be in nearly every vertical to be able to do this and to really when you have to have the scale required on both continents. So the customers are businesses for us. They're not consumers. Consumers [indiscernible] of our customers -- home charger directly from us. The consumer is not our customer, just like in Airbnb's case, the consumer is not technically a customer. It's the property owner that's renting a room or a cottage, right? A real customer very -- a real customer for us is the business. So we think of ourselves as sort of an index for the electrification of mobility. If you want to play the electrification of mobility, if you play charging and you play a broad company or a set of companies that are involved in broad deployment of chargers, then you don't have to pick a winner on the OEM side, that's going to drive demand for charging. And I think that the only way to be in every vertical on 2 continents is to have a capital-light model. It doesn't work otherwise because there are plenty of scenarios where the business customer views either a cross subsidy or amenity value or marketing value and the charger above its revenue value. And so if you want to play and you want to have broad ability to deploy, you need to kind of stay out of the energy economics because leave it up to the business to provide all the tools like we do, but leave it up to the business to decide what the business model to the driver is because as the business is probably have to enable them to do that and take care of it all. So I think that's the biggest pitch for an investment in ChargePoint as if you want to play the whole market without picking an OEM winner, which is a diffuse space then you can look to what looks to be a crowded space but actually not that crowded. There's not that many -- if you net out the asset owners, which are -- and you can pick -- try to pick a winner there, too. If you net out the asset owners, in that space, right, then you're left with very few companies that are focused on broadly enabling tech in the industry.

Right. No, that's great. And we appreciate the time. My only suggestion would be maybe we send a T-shirt to the Wall Street Journal headline writer as well. Great. Thank you, Pat. Appreciate the time. Thank you, and have a great day, guys.

Bye.