ChargePoint's Path to EBITDA Breakeven: Navigating Delays, Tax Credit Risks, and Strategic Partnerships

ChargePoint Holdings (CHPT) is navigating a complex landscape as it strives to achieve EBITDA breakeven in a volatile EV infrastructure market. While the company’s Q2 2026 results revealed a 9% year-over-year revenue decline to $99 million, its non-GAAP gross margin improved to 33%—a significant leap from 26% in the same period the prior year [1]. This margin expansion, driven by subscription revenue growth and cost discipline, underscores ChargePoint’s operational resilience. However, the path to profitability remains fraught with challenges, including delayed projects, macroeconomic headwinds, and the impending expiration of critical tax credits.

Strategic Financial Resilience: Cost Management and Margin Expansion

ChargePoint’s focus on cost management has yielded tangible results. The company reduced non-GAAP operating expenses by 29% year-over-year in Q2 2026, a move that narrowed its adjusted EBITDA loss to $22.1 million from $34.1 million in Q2 2025 [1]. This progress is critical, as the company’s cash balance of $195 million as of July 2025 provides a buffer against near-term liquidity risks [2]. CEO Rick Wilmer emphasized that these cost reductions are part of a broader strategy to align expenses with revenue realities, particularly as project delays—driven by U.S. passenger EV sales slowdowns and tax credit uncertainty—push the EBITDA breakeven target beyond 2026 [2].

The company’s subscription model is a key differentiator. Subscription revenue grew 10% year-over-year to $39.9 million in Q2 2026, reflecting the stickiness of its platform and recurring revenue streams [1]. This shift toward high-margin services has bolstered gross margins, which now stand at their highest level since ChargePoint’s IPO [3].

Tax Credit Expirations: A Double-Edged Sword

The expiration of the U.S. 30D and 30C tax credits poses a significant risk to ChargePoint’s growth trajectory. The 30D credit, which offers up to $7,500 for new EV purchases, and the 30C credit, providing 30% of installation costs for charging stations, are set to expire by late 2025 and mid-2026, respectively [4]. These incentives have historically driven demand for EV infrastructure, and their absence could accelerate the slowdown in U.S. passenger EV sales already observed by ChargePoint [2].

To mitigate this risk, ChargePoint is urging customers to accelerate deployments before the deadlines. The company also highlighted partnerships with organizations like the Electrification Coalition’s Drive EV Fleets program, which offers tax-credit navigation support for businesses [4]. While these efforts may soften the blow, the long-term impact of reduced consumer and corporate spending on EV infrastructure remains uncertain.

Strategic Partnerships: Eaton and the Path to Operational Efficiency

ChargePoint’s collaboration with Eaton has emerged as a cornerstone of its growth strategy. The partnership, which began generating revenue in Q2 2026, has led to the development of a modular Express DC fast charging architecture. This innovation promises to reduce capital expenditures by 30%, physical footprints by 30%, and operational costs by up to 30% [3]. Such efficiency gains are critical for improving hardware gross margins and scaling operations in North America and Europe, where ChargePoint holds a 70% market share in Level 2 charging [3].

The partnership also extends to AC hardware, with bidirectional charging capabilities and cost reductions further strengthening ChargePoint’s competitive edge. These advancements align with the company’s goal of achieving positive EBITDA by fiscal 2026, albeit with a revised timeline due to project delays [1].

The Road Ahead: Balancing Risks and Opportunities

While ChargePoint’s EBITDA breakeven remains delayed, the company’s strategic initiatives—cost discipline, subscription growth, and partnerships—position it to weather near-term volatility. However, investors must weigh these positives against macroeconomic risks, including the tax credit expiration and global supply chain challenges. ChargePoint’s cash reserves and undrawn $150 million credit facility provide flexibility, but sustained profitability will require continued execution on cost management and innovation [1].

For now, ChargePoint’s focus on high-margin services and operational efficiency offers a glimpse of resilience in an unpredictable market. As the EV infrastructure sector evolves, the company’s ability to adapt to shifting incentives and technological demands will determine its long-term success.

Source:
[1] ChargePoint Reports Second Quarter Fiscal Year 2026 Financial Results [https://investors.chargepoint.com/news/news-details/2025/ChargePoint-Reports-Second-Quarter-Fiscal-Year-2026-Financial-Results/default.aspx]
[2] ChargePoint (CHPT) Q2 2026 Earnings Call [https://www.fool.com/earnings/call-transcripts/2025/09/03/chargepoint-chpt-q2-2026-earnings-transcript/]
[3] ChargePoint's Path to Profitability: Operational Gains and Strategic Alliances Fuel Investor Optimism [https://www.ainvest.com/news/chargepoint-path-profitability-operational-gains-strategic-alliances-fuel-investor-optimism-2509/]
[4] EV and Charging Tax Credits After the One Big Beautiful Bill Act [https://electrificationcoalition.org/resource/ev-and-charging-tax-credits-after-the-one-big-beautiful-bill-act/]