Blank-check company merger mania is spreading from electric vehicle makers to electric vehicle charging companies as EVgo becomes the latest EV-related enterprise to begin the process.
EVgo, which was founded in 2010, agreed to merge with Climate Change Crisis Real Impact I Acquisition Corp., or CRIS, and will list on the New York Stock Exchange as EVGO in a deal that is expected result in the “new” EVgo boasting a market cap of $2.6 billion. More importantly, it will net $575 million in cash to fund its ongoing expansion of fast-charging stations.
“Just a few years ago, electric vehicles were considered niche,” said Cathy Zoi, chief executive officer of EVgo. “Today, improved technology, lower costs, greater selection, and a better appreciation for the performance of EVs is increasingly making them the vehicle technology of choice.
While motorists often enjoy the instant power that comes with an electric vehicle, many are hesitant to buy one because of the potential limitations of charging the vehicle. One of those issues is a lack of charging stations.
EVgo has been growing rapidly in recent years, now reporting 800 locations in 67 large metro areas in 34 states. The company serves 220,000 customers, but the charging business is highly competitive and growth is imperative as the EV market is expected to increase more than 100x between 2019 and 2040, the company noted.
Much of EVgo’s new growth will be centered on fast charging stations, which help significantly cut down the time needed to juice up an EV. That’s even more imperative with the rise of electric fleets in the U.S. Fast charging’s share of EV charging is expected to increase to greater than 40% by 2040.
“… (T)he need for fast charging is on the rise. An estimated 30% of Americans do not have access to at-home charging, and EVs will be increasingly deployed by fleets to transport goods and people in an environmentally friendly way. Time is precious for all of us, so a public fast charging option with an expanding footprint like EVgo is essential to meet the rapidly growing needs of EV drivers of all types,” Zoi said in a statement.
The company has been on an upward trajectory for a while, most recently buoyed by a partnership with General Motors. The two companies partnered up last year to begin a build out of 2,700 new fast charging stations during the next five years.
Last summer, Zoi said that there were about 10,000 fast-charging stations are currently available to the public, but that number needs to increase fivefold to level the playing field with gas stations across the country.
According to federal data, there are now about 25,000 charging facilities in the U.S., but there are more than 150,000 fueling stations across the country, according to the American Petroleum Institute.
EVgo has plenty of competition for customers, such as Electrify America and ChargePoint. ChargePoint raised $127 million last August to fund its expansion plans. Collectively, they and other commercial vendors are expected to operate tens of thousands of quick chargers by mid-decade.
The Biden administration’s pro-EV position is only going to intensify the competition among charging facility providers. Biden has called for having 500,000 public chargers in place by 2030, and there appears to be support for expanding current federal incentives for buyers.