Kempower: New strategy likely to emphasize growth in heavy transport and services

Translation: Original published in Finnish on 4/8/2026 at 7:00 am EEST.

Kempower will unveil its new strategy this spring and host a Capital Markets Day (CMD) on May 26 in Oslo to discuss it. We believe the new strategy will focus more than before on areas such as heavy transport and increasing service revenue. In addition to pursuing growth, we believe the company is making significant efforts to streamline its operations. We see significant scalability potential in profitability as the fastest growth phase for the organization and fixed costs has already passed.

Heavy transport as a key growth driver

Kempower does not regularly report the share of commercial vehicles in its revenue, but we estimate that the company is particularly competitive in this segment. For these reasons, the growth outlook for heavy transport is of particular interest in the strategy and at the CMD. The heavy-duty transport segment has seen significant progress in recent years, and Kempower has also secured major customers, including equipment deliveries to the largest charging site in the US, in California (more information). Additionally, the company was among the first to introduce Megawatt Charging Systems (MCS) to the market, the importance of which will grow in the future.

At the time of the previous CMD, the company reported that commercial vehicles accounted for approximately 30% of its revenue, and we estimate that this percentage has increased since then. The key point is how the company expects revenue to develop in the future and what concrete market growth indicators are in sight. As part of its previous strategy, Kempower estimated that the market for fast charging equipment would grow to 14 BEUR in Europe and North America in 2030, with the commercial vehicle segment accounting for the majority of this growth, or 9 BEUR. However, we estimate that the market has grown more slowly than previously anticipated. We project that the market size in Western markets will be 9 BEUR in 2030, with approximately half of that coming from the commercial vehicle segment. Although the commercial segment currently comprises a smaller portion of the market, it is expected to grow faster.

Will margins hold up amid Europe's intense competition?

Although Kempower is a market leader in the Nordic countries and has already expanded throughout the Western world, in some key markets, the company is still a challenger. North America and German-speaking Europe, for example, are regions where we believe the company's market share is still low, although it is growing due to expansion efforts in recent years. Gaining market share in the passenger car segment in Europe, in particular, has necessitated price-driven competition, which was a significant factor behind the weakening gross margin seen at the end of 2025.

The company has stated its intention to maintain stable margins in the future by streamlining its production and supply chains, among other measures. We still view Kempower's competitive position as strong because it has grown robustly recently, similar to market leader Alpitronic, while, for instance, ABB e-Mobility's business has shown weak growth and has been significantly unprofitable. However, CMD might be able to provide additional insight into the competitive landscape.

Gross margin development %

Source: Inderes' estimate

Guidelines needed for growth outlook in the service business

Kempower's business model has been primarily dependent on equipment sales so far, but revenue streams could expand over time as the installed base grows and the company develops its service offerings. Currently, the share of recurring revenue streams is low (service sales accounted for 5% of the total in 2025), and we expect the new strategy to provide clearer guidelines on how to increase this share in the future. Going forward, the company could generate recurring revenue from sources such as ChargEye cloud services, spare parts sales, and maintenance services. Service sales grew by 38% in 2025, clearly outpacing total revenue growth (12%).

Aiming to expand sales of software services

Since its founding, the company has invested heavily in ChargEye, a software solution for managing charging equipment. The company’s software offerings have helped it gain a competitive edge, as is the case with clients in the retail sector who value simple, one-stop solutions. The importance of software is also emphasized in the heavy-duty transport segment because charging sites are large, and managing the charging of vehicle fleets is more complex than charging individual passenger vehicles.

Since 2025, Kempower has been piloting the sale of ChargEye software to third-party device users as well. This would allow the company to reach a broader customer base than ever before for its software and increase the share of its software business in total revenue. However, our current baseline assumption is that significantly increasing the share of software revenue to more than 5–10% of the total will be difficult. In our view, achieving organic growth in that segment during the new strategic period would constitute a significant success and bolster the company’s profitability.

Spare parts sales are becoming increasingly important as existing equipment ages

Currently, spare parts sales account for only a small portion of revenue but could grow significantly in the future as the company’s installed base of equipment ages and warranty periods expire (often 24–36 months). In addition to replacing worn parts, customers have the option of increasing their charging systems' capacity by adding power modules, for example.

Maintenance business potential is still in question

The provision of maintenance and support services is a third potential source of future recurring revenue for the company. In our view, this revenue stream is almost non-existent for now. However, based on the company's statements, we have interpreted that many customers are interested in maintenance service agreements in connection with equipment sales. Subcontractors could be utilized to provide maintenance services. It is unclear how broadly the service operations would be offered or whether they would primarily target niche segments, such as ports and industry, where third-party service operations may not even be available yet.

Growth targets are being pushed back

We expect Kempower to delay its growth targets because it seems unlikely that the company will meet the goals it announced in spring 2023. This is because the electrification of all transportation is proceeding more slowly than expected three years ago.

In its 2023 strategy, the company targeted revenue of 750 MEUR for 2026–28 (our forecast: 322-483 MEUR, consensus: 314-467 MEUR). In the new strategic period, 2030 could be a natural target year, for which we currently forecast revenue of 655 MEUR, representing 21% annual revenue growth. We expect the new revenue target to be along the same lines.

Revenue by region (MEUR)

Source: Inderes' estimate

Cost structure with strong scale-up potential

Kempower's profitability has also not developed as expected during the current strategy period, which is closely related to revenue and weaker market growth. However, the company's gross margin has largely held up (2025: 48%), which would enable a strongly scalable cost structure if continued. Between 2021 and 2024, the company significantly expanded its organization, and we believe the need for fixed cost growth will be moderate in the coming years. Additionally, under the new CEO, the company has initiated extensive development and efficiency measures, both in production and in other processes. Therefore, we anticipate that the EBIT margin could improve with growth to even double-digit levels in the medium term.

In its 2023 strategy, the company aimed to increase its operational EBIT margin to 10-15% by 2026-28 and to over 15% in the long term. We estimate an operational EBIT margin of 3.5-11.4% for those years (consensus: 3.5-9.9%) and 12.4% by the end of the decade (2030). Therefore, we expect the company to continue aiming for an operational EBIT margin of at least 10% by 2030, if not higher. From a market perspective, a target of over 10% might appear modest or neutral, whereas a target exceeding 15% would seem encouraging and ambitious.

Looking for clues about this year's outlook

The stock market may also react to CMD based on factors unrelated to the strategy itself, such as hints about this year’s growth outlook read between the lines. The company’s revenue guidance for 2026 is quite broad (10–30% growth) and, in our view, fairly conservative given the actual order growth in 2025 (39%). One reason for this is the relatively long delivery times for the order book, as nearly a third of the order book from the beginning of the year will not be delivered until 2027. We assume that the guidance has been set somewhat conservatively to manage expectations since it had to be lowered or revised downward in 2024–2025. If growth reaches the upper half of the range (20–30%), it could bolster the stock price (our forecast is 24%).