Chargepoint (NYSE: CHPT) is something of a picks-and-shovels play in the electric-vehicle (EV) sector. Providing the things that a growing industry needs has long been a strong business model, but Chargepoint is struggling to earn a profit. That's why it just announced plans to cut costs.

Is this really a good idea?

Chargepoint is a vital cog in EV growth

Chargepoint supports the EV industry by building, selling, and operating EV charging infrastructure. The company covers everything from EV chargers people use at home to the charging systems used by auto fleets.

It operates over 300,000 charge ports, and via roaming agreements, has access to over 700,000. Its network spans across North America and Europe (or some 16 markets).

Although EV adoption is still fairly modest around the world, Chargepoint has built a fairly large network. That's important because EV adoption basically requires that this type of infrastructure be installed. Thus, Chargepoint is doing something very important.

The problem is that building this infrastructure isn't cheap or easy, which is why Chargepoint has yet to turn a full-year profit. It hasn't even spent a single quarter in the black.

It costs a lot of money to build out a network to support an industry that isn't yet fully developed, and there's not much reward for taking on that challenge. Chargepoint's story is basically one of preparing today for a future that's dominated by EVs. You should only buy it if you believe that's what the future holds.

Chargepoint: Trying to make ends meet

The problem, of course, is that companies can't lose money forever. Investors eventually expect profits. A quick look at Chargepoint's stock graph shows exactly what you'd expect.

It came public to a great deal of excitement since it was going to help revolutionize the transportation industry by ushering in the EV revolution. When that revolution didn't happen quickly enough, investors lost interest and the stock plunged.

A low stock price and investors who have taken a show-me attitude is problematic for a developing company like Chargepoint. It makes it harder to raise capital via debt and equity sales.

In effect, Chargepoint has to either find a way to make a profit or at least convince Wall Street that there are profits on the horizon (and the company has the financial wherewithal to survive until that point). This is why Chargepoint just announced a cost-cutting plan.

The initiative will reduce the company's global workforce by 15% and is expected to save around $41 million a year on an annualized basis. That comes out to around $10 million a quarter, which wouldn't have been nearly enough to push Chargepoint into the black in the second quarter.