As far as EV charging stocks go, ChargePoint (CHPT) has garnered most of the attention of late, and for good reason.

After all, there’s massive political support for growth in EV charging stations in the U.S. The announcement that Biden hopes to have half a million charging stations in the U.S. in short order is great for the leading EV charging company in America. Accordingly, this favorable political environment has likely more than been priced into CHPT stock today. (See ChargePoint stock analysis on TipRanks)

Indeed, ChargePoint is the industry leader in level 2 charging in North America and Europe. The company’s 132,000 charging locations in these key competitive continents speaks to ChargePoint’s dominance in this growth sector. ChargePoint’s current market share of roughly 70% of the networked level 2 charging market in North America makes this the pre-eminent play for those bullish on the growing need for EV infrastructure globally.

Furthermore, one key selling point behind ChargePoint is related to the company’s IP and the fact that it manufactures and uses its own proprietary technology. For those who believe charging stations will be largely a separate industry altogether from EV companies (though Tesla (TSLA) is playing in this space in a big way), ChargePoint looks like the way to play this space. It’s a pure-play on long-term growth in a sector that has legs.

Let’s dive into why investors may want to press pause on getting too bullish on this stock.

Competition and Long-Term Margin Concerns Not Priced In Yet

When many investors think of EV charging plays, they’re often looked to (and valued) more like growth/tech stocks. In reality, there’s reason to think of EV charging plays more like gas stations. Or, more accurately, the gas stations of the future.

As most investors know, the gas station business can be a good one in which to invest. A favorite stock of many investors right now is Alimentation Couche-Tard (ANCUF).

However, these businesses have historically low margins on fuel. The explanation for this is simple: extremely high levels of competition in a sector selling a ubiquitous commodity. Indeed, gasoline really isn’t any different than electricity – the price is set at the market (or regulatory) rate, and those selling this product are price-takers.

Accordingly, companies like ChargePoint may become the convenience store purveyors of the future. That’s how companies like Couche-Tard have produced their impressive margins and long-term growth profile.

Still, selling charging stations to commercial clients as its primary line of business doesn’t scream “profitable long-term growth strategy.” At least, not to those with a long enough investing time horizon to consider how this company will realistically make money once EV charging stations are installed everywhere.