LOS ANGELES - EVgo Inc. (NASDAQ: NASDAQ:EVGO), a leader in the U.S. public fast charging space for electric vehicles (EVs) with a market capitalization of $1.88 billion, has finalized a $1.25 billion loan facility backed by the U.S. Department of Energy (DOE) to expand its nationwide charging network. The company's stock has shown remarkable momentum, delivering a 200% return over the past six months according to InvestingPro data. The loan, provided under the DOE's Title 17 Innovative Energy Loan Guarantee Program, will finance the construction of approximately 7,500 new high-power fast charging stalls across the country.
The initiative aims to more than triple EVgo's current network to at least 10,000 fast charging stalls by 2029, enhancing the company's infrastructure to support the growing number of EVs on the road. With a strong financial foundation including a current ratio of 2.19 and more cash than debt on its balance sheet, EVgo's CEO, Badar Khan, emphasized the importance of this public-private partnership in scaling operations to accommodate the expected surge in EV options for American consumers.
The project is anticipated to create over 1,000 jobs in the U.S., with more than 700 contracted roles spanning construction, engineering, development, and operations. The loan terms include a principal of $1.05 billion, capitalized interest of up to $193 million, and a fixed interest rate based on long-dated U.S. Treasury rates plus a risk-based charge and liquidity margin of about 1.2%. EVgo has pledged 1,594 charging stalls from its existing network as collateral.
The loan has a 17-year tenor from the first drawdown, with a five-year deployment period commencing in 2025. Principal repayments are scheduled to begin after the deployment period, with interest capitalized rather than paid in cash during this time. The first drawdown of approximately $75 million is expected in January 2025, subject to the satisfaction of all conditions precedent.
In addition to the expansion, EVgo is fostering innovation through its EVgo Innovation Lab, where it collaborates with automakers and technology partners. The company is also developing next-generation charging architecture, with plans to secure domestic intellectual property rights and begin deployment in the second half of 2026.
This announcement follows an 18-month process that began with a conditional commitment from the DOE on October 3, 2024. EVgo will discuss the loan facility details further during an investor conference call today at 5 p.m. ET.
The company's expansion and technological advancements are set to play a crucial role in supporting the expected release of over 30 new affordable EV models by the end of 2025, adding to the more than 70 models currently available to U.S. consumers. With analysts projecting 61% revenue growth for fiscal year 2024 and a gross profit margin of 27.5%, EVgo appears well-positioned to capitalize on this market opportunity. EVs now represent about 9% of new vehicle sales, and the bolstered charging infrastructure is vital for maintaining consumer confidence and supporting the automotive industry's investments in electrification. For deeper insights into EVgo's growth prospects and financial health metrics, investors can access comprehensive analysis through InvestingPro, which offers exclusive access to over 10 additional ProTips and detailed financial metrics.
This news article is based on a press release statement from EVgo Inc.
In other recent news, EVgo Inc. and General Motors (NYSE:GM) have achieved a significant milestone, opening over 2,000 public fast charging stalls across the United States. This expansion, which has doubled the companies' fast-charging footprint within just over a year, is part of their robust nationwide network strategy. EVgo also reported a record third-quarter revenue of $68 million, a substantial year-over-year increase, backed by a conditional $1.05 billion loan guarantee from the U.S. Department of Energy. This financial boost is set to support the addition of 7,500 high-powered charging stalls over the next five years. In terms of analyst upgrades or downgrades, InvestingPro's analysis shows that EVgo maintains strong liquidity with a current ratio of 2.19, indicating a positive financial health. Other recent developments include partnerships with GM and Delta Electronics to develop advanced charging technology and flagship sites. Despite reporting an adjusted EBITDA loss, EVgo maintains a positive outlook, targeting to reach breakeven by 2025.
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