Sawtelle-based electric vehicle public charging station developer EVgo Inc. should be a dream company for investors.
Contract orders for charging stations have come in at a steady clip, giving the company a pipeline of some 3,500 stations. That’s more than the 3,100 stations the company has either already deployed or are under construction. The driving force is a five-fold increase in the number of electric vehicles on the nation’s roads to 2.2 million last year compared with about 400,000 in 2018, according to an Experian consumer trends report.
And with $7.5 billion in federal infrastructure dollars about to roll out specifically targeted to building 100,000 new public charging stations nationwide over the next two decades, as well as the state racing to complete its charging network before a zero-emission vehicle mandate kicks in by 2035, there would seem to be plenty of work and funds available over the next decade for companies like EVgo.
Yet investors have soured on the company. Since reaching a peak of $12 last August, EVgo shares have lost roughly two-thirds of their value, closing on July 25 at $4.02. In that same period, the overall Nasdaq market, on which EVgo shares trade, has gone up 8.4%.
So why are investors so bearish on EVgo?
According to one equity analyst who follows the company, the answer comes down to two words: execution and Tesla.
Craig Irwin, senior research analyst at Newport Beach-based Roth MKM, points to EVgo’s ongoing cash-burn issues, as the company is spending far more to build out and maintain its charging network than it’s taking in with revenues. Last year, operating losses totalled $149 million (larger than the $90 million in losses for 2021), and the first quarter of this year was even worse, with an operating loss of nearly $43 million.
Irwin said EVgo – and the entire industry – has been hit with supply-chain issues and delays with hookups to local electric utilities, particularly in the last couple of…
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