But it wasn't without controversy.
The city is contracting with Blink Charging, known as much for its white-hot stock as its network of electric vehicle chargers. Blink has seen its share price grow exponentially over the past year as investors have gravitated toward clean energy and electric vehicle stocks — companies assumed to be riding the decarbonization wave.
But Blink's stock price gains — nearly 2,300 percent over the past eight months — have outpaced the growth of the company's revenue and the size of its network. The deal with Blink comes as cities such as San Antonio look to install charging stations before EVs catch on with large numbers of drivers. So-called "range anxiety" so far has limited the adoption of electric cars, with drivers worried there aren't enough chargers to ensure their car won't lose its juice and leave them stranded.
CPS Energy has estimated 50,000 electric vehicles will be in the city by 2030. As of July, 4,400 EVs were registered in San Antonio.
"As a company, Blink is honored to help the city achieve its climate, sustainability, transportation, and air quality goals," Blink CEO Michael Farkas said in a statement. " Texas continues to be a growth market for us and for EVs, and this project will help to increase public awareness by increasing the number of charging options available in the state."
The contract with Blink was delayed after District 8 Councilman Manny Pelaez raised concerns at a December council meeting about legal issues and business practices at Blink.
Pelaez highlighted an August report from Culper Research, which claimed Blink overstates the size of its charger network and the viability of its business model.
The report alleged that the number of public chargers in Blink's network — as opposed to chargers sold to customers for home use — hasn't grown much over the past five years. The report also said Blink has let some of its chargers fall into disrepair because the company has lacked the cash and manpower to maintain its equipment.
Blink executives have vehemently denied the report's claims and called them "false, defamatory, and anonymous."
Company officials said the chargers referred to in the report were sold to private operators who own the equipment. Blink has no obligation to maintain the chargers it sells, they said.
Blink makes most of its money by owning and installing chargers and collecting a fee each time they're used. But the company also sells chargers directly to consumers or businesses, and offers a hybrid ownership model in which Blink and its customer split charging revenue.
Multiple lawsuits were filed against the company after the Culper report was published, arguing Blink had misled investors about the size and scope of its charging network.
Culper Research is a short seller, meaning it bets that certain companies' stock prices will fall. Culper, unlike notable short sellers such as Citron and Hindenburg, does not have an address or contact information associated with the firm posted on its website.
After Pelaez succeeded in delaying the deal with Blink, the council's audit and accountability committee met again in January to re-examine the proposed contract.
City staff dismissed the criticisms of Blink, saying they conducted adequate due diligence on the company.
"The plaintiffs had a vested interest at the time they filed the lawsuit in seeing that the stock went down, not up, because they are short sellers," City Attorney Andy Segovia said.
Council members and city staff also have said the deal with Blink comes at no risk to the city.
The contract doesn't cost anything, and Blink will split revenue with the city after the company covers its initial investment on the chargers. Blink executives said revenue-sharing would likely begin about two years after the chargers are installed.
The contract is for one year, with options to extend it for up to four additional one-year terms.
"Yes, there are some naysayers," Farkas said. "However, after City Council had a chance to fully review Blink and our equipment, our services and team, they clearly saw the benefits of partnering with a leader in the EV infrastructure space."
Policymakers see the build-out of charging stations for EVs as the solution to the proverbial chicken-and-egg problem. Without chargers, drivers won't buy EVs. Without EVs on the road, companies may not build charging stations.
Through the contract, the city is jump-starting the development of more charging stations citywide.
"These are capital investments that enable increased utility revenue, lower emissions and hence health benefits, as well as potentially lower fuel costs for the consumer," said Dave Tuttle, a research associate at the Energy Institute at the University of Texas at Austin.
Tuttle said the key for EV charger deployment is a "multipronged" approach — including city governments pushing to locate chargers on municipal property.
Bloomberg New Energy Finance estimates that 67 million charging stations will need to be installed globally by 2030 to support the number of electric vehicles on the road.
The International Energy Agency projects that EVs will grow as a share of vehicles in use to more than 13 percent by 2030, up from less than 1 percent in 2019.
In recent months, stock market analysts have warned of a bubble forming among stocks related to electric vehicles.
Powerhouse EV maker Tesla has seen its shares nearly double in value since mid-November and increase by 400 percent in the last year. Shares of QuantumScape, a company that produces next-generation EV batteries — but doesn't expect to see significant sales until the mid-2020s — rose by more than 800 percent from November through late December before settling at more than $44.
Blink's share price has shot up more than 480 percent in the last three months and by over 2,000 percent in the last year.
The price-to-sales ratio is a measure of whether a company is properly valued by weighing its stock price against the company's total sales values. A lower ratio can indicate a company is undervalued, and vice versa.
The ratio for the entire S&P 500 index, which tracks 500 of the largest U.S. companies, is 2.8. Tesla, which some analysts say is already overvalued, has a price-to-sales ratio of 31.
Blink's ratio is 336 — more than 10 times greater than Tesla's.
Investors have poured money into nascent companies without proven financial track records, and now "lofty valuations are leading to concerns" that segments of the stock market could hit a ceiling, according to an analysis from ratings agency S&P Global Platts.
In Blink's latest quarterly earnings report — from July through September — the company said it generated $900,000 in revenue and lost nearly $4 million. And while Blink hasn't yet reported full year results for 2020, estimates by Roth Capital Partners suggest the company saw $5.2 million in revenue and lost $13.4 million.
Blink touts its owner-operator business model, which allows the company to deploy chargers and collect a fee each time a charger is used. Farkas has said the business model depends on more drivers shifting to EVs. The company anticipates that will happen in the coming years.
But revenue from Blink's charging service was down in 2020, when the company made an estimated $800,000 in charging service revenue, compared with $1.36 million in 2019. Blink blamed the pandemic for the decline in charger usage, with fewer drivers on the road last year.
Even so, revenue from Blink's charging service has been flat since 2015, when Blink made $1.7 million in revenue from the service. In 2018, its charging service brought in revenue of $1.26 million.
And in 2019, Blink reported $2.8 million in total revenue. By comparison, competitor ChargePoint — which is going public this week— posted $144.5 million in revenue in 2019.
ChargePoint boasts a network of more than 115,000 chargers, compared with Blink's 6,900 chargers.
"Blink operates in a competitive market with low barriers to entry, and many competitors have greater financial resources that could make competitive investments that could be difficult to match," Roth Capital analyst Craig Irwin wrote in Feb. 5 note to investors.
Despite some of the risks facing Blink, Irwin recently issued a "buy" rating on the company and set a $67 price target for its shares. That's 19 percent above where Blink shares traded Wednesday.
While the business of charger stations may be competitive, Irwin said there's plenty of room for a number of large EV charging players.
"There are hundreds of millions of EV chargers that are going to be needed by 2030, and then by 2040," he said. "So when I look at Blink or ChargePoint, the market estimates could be off by 50 percent and these companies could still make numbers."
Although it's relatively small, Blink is one of only a handful of players in the charging industry with scale, Irwin said.
The hype around electric vehicle charging allowed the company to offer additional shares in January and raise $221 million in cash.
"Blink probably will be one of the more interesting companies five to 10 years from now," Irwin said.
Since 2018, when Blink went public, the company has generated about $10.6 million in revenue — and paid out $26 million in executive compensation.
After Blink shares surged to record highs in mid-January, Farkas sold $22 million worth of company stock. The move drove the stock price down by 3 percent the day it was announced.
"He got paid in stock for so many years, he has a right to do that," Irwin said. "(Farkas) deserves the fruits of his labor."
Still, Blink's yearly losses have grown. The company lost $3.4 million in 2018, $9.6 million in 2019 and an estimated $13.4 million last year. Irwin said Blink may reach profitability in 2023.
"They are showing a loss, and speaking with (Blink) and talking about their financial performance, that's something, based on their strategy and where this market is moving, that will turn the corner some place in the future to be a positive net income stream," said Troy Elliot, the city's deputy chief financial officer.
As part of the deal with the city, Blink will apply for a grant worth $2,500 per installed charger through the Texas Volkswagen Environmental Mitigation Program. City officials have said that as a grant recipient, state regulators would closely watch Blink to ensure it's living up to its commitments.
City staffers still have to figure out where exactly to place the Blink chargers but said they would be spread throughout the city.
Council members unanimously approved the contract Feb. 4.
"We know (the Blink agreement) is going to help us make a big leap in people adopting the use of electric vehicles," District 7 Councilwoman Ana Sandoval said. "Having the infrastructure installed will be tremendously helpful."
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