Kempower CMD: From equipment supplier to total solutions provider

Translation: Original published in Finnish on 5/27/2026 at 8:51 am EEST.

Kempower hosted a Capital Markets Day on Tuesday, where it shed light on its current market growth estimates and elaborated on the focus areas of its new strategy period. A key objective for Kempower during the strategy period is to transform from a pure equipment supplier to a total solutions provider. Additionally, the company aims to balance the geographical distribution of sales, which in practice means stronger growth outside the Nordics. In this comment, we discuss our key observations from the Capital Markets Day presentations.

Broad-based market growth

During its strategy period, Kempower expects market growth to be strongest in North America and Asia, and slightly more moderate in Europe. Growth targets appear to be high, especially for North America. Although Kempower is still a small player in the market, 120 new customers in the last three years support our assessment of the company's strong competitiveness. Overall, the company expects the electric vehicle charging solutions market to grow by 10–25% under various scenarios, and it also aims to increase its market share. However, growth is not being pursued at any cost, as was the case in the previous strategy period; instead, there is a clearly stronger focus on improving profitability. Key factors supporting market growth include the low operating costs of electric vehicles relative to internal combustion engine vehicles, global emission reduction targets, and government investment subsidies, particularly for electric vehicle charging infrastructure.

Heavy-duty charging solutions were not specifically emphasized in the CMD presentations, but they are nevertheless a very essential part of the company's growth plans. Currently, about 25% of the installed equipment base consists of charging equipment for commercial vehicles, but the company did not report the revenue share. In the company's estimation, market growth in the US is driven by commercial vehicles, as changes in EV subsidy policies are slowing the development of the electric passenger vehicle fleet. On the other hand, the North American market is not yet very mature, as the ratio of charging equipment to the number of electric vehicles is still low.

In Europe, the company still sees strong potential in passenger car chargers, although here too, the company expects growth to be faster in the commercial vehicle market, similar to North America. This supports Kempower's growth outlook, as we estimate the company's competitiveness in this segment to be particularly strong. The company has been among the first to introduce Megawatt Charging Systems to the market and has already secured several significant customer accounts.

The outlook for the Nordic countries is clearly more moderate, as the charging network is in a more mature phase. The market was also not specifically discussed in the presentations. In entirely new markets (especially in Asia), the company plans to utilize a partner model and its existing customers already operating in the target country, through which it can generate initial volumes. At a later stage, the company will also consider establishing its own sales organization, depending on the situation.

Aftermarket services support profitability

Kempower's business model has so far been primarily dependent on equipment sales. Recurring revenue's share is currently low (service sales 5% of the total in 2025), as the focus has been on increasing production capacity and the installed base. In its strategy update, the company elevated the role of aftermarket services – as expected. Still, the company does not expect a dramatic increase in the share of aftermarket services in revenue, as it estimates the figure to remain slightly below 10% at the end of the strategy period. However, the percentage growth should be rapid.

Aftermarket services include spare parts sales, software, and maintenance services, which are typically very profitable operations for equipment manufacturers. Successful expansion of the service business would support profitability, especially in the longer term, and mitigate the negative effects of price erosion caused by intensifying competition.

For software, the playbook is clear, as the company's proprietary ChargeEye is already widely used by customers. However, for maintenance services, the final operating model still appears to be open due to the industry's early stage of development and the young age of the current equipment base.

Targeted earnings improvement will mainly come from revenue growth

In terms of profitability, Kempower is in a clear scaling phase. The company significantly expanded its organization between 2021 and 2024, and we believe the need for fixed cost growth will be moderate in the coming years. According to the company's own assessment, its current production facilities have the capacity to triple production volumes without significant investments.

In our interpretation, the recent decline in gross margin is partly due to price-driven market share growth. Kempower expects price erosion to continue in the future, so to compensate for this, the company has initiated extensive development and efficiency measures in both production and other processes. These include considering manufacturing costs already in the product design phase, competitive bidding for component procurements, and optimizing production methods.

Kempower's profitability target (EBIT margin of 10-15%), on the other hand, takes into account the uncertainty regarding market development. At the lower end, market growth is expected to be more moderate, while the company should reach the upper end if positive market growth materializes. In any case, the company aims to improve its results annually, and there are three key factors behind this in the company's calculations. The most important factor is the fixed cost base, which is geared towards a significantly higher volume than at present, offering scalability as revenue grows. In addition, the growth of the service business improves profit margins, and the efficiency program supports the gross margin of equipment sales. Investments in technology, service, and sales will, in turn, absorb some of the efficiency gains.

Competitive position still appears strong

Overall, the above factors were largely expected, and no significant changes have occurred in the company's direction. In the future, however, the company intends to transform itself from an equipment manufacturer more strongly towards a comprehensive service provider and expand its revenue streams into more continuous services. In part, this is also influenced by the tightening competitive situation, as the strongest competitors have closed the technological gap, especially in fast charging equipment for passenger vehicles. On the other hand, according to the company, its customers' focus in purchasing decisions has shifted from the device's price more strongly towards analyzing total lifecycle costs, which should benefit Kempower, as it invests in product development flexibility and optimizing capacity management and charging events. The satellite charging solution and proprietary software play an essential role in this, and the company sees these as its key differentiators.

Overall, we assess Kempower's competitive position as strong, as it has grown robustly recently, similar to market leader Alpitronic. On the other hand, competition is constantly intensifying, as evidenced by the recent decline in gross margins. In our view, achieving a sufficient scale in the industry is critical, as production efficiency will be emphasized in the more mature phase of the industry that will eventually arrive. So far, Kempower has succeeded in growing especially due to its strong technology.