EVgo Investors Get ‘Holiday Gift’ As Company Closes $1.25 Billion DOE Loan

EVgo (EVGO) shares went on a roller coaster ride Friday after the electric vehicle charging station maker received $1.25 billion in loan guarantees from the federal government to build more chargers. 

The company reported that it had closed out the loan facility from the U.S. Department of Energy Loan Programs Office under its Title 17 Clean Energy Financing Program.

EVgo said the money would be used to construct 7,500 fast-charging stalls nationwide, giving it at least 10,000 in its owned and operated network. The chargers will be installed over five years beginning next year. 

In a note to clients, J.P. Morgan called the loan closure “an early holiday gift” to EVgo investors. The analysts maintained their “overweight” rating, following an upgrade in October in anticipation that the loan deal would be completed before the end of 2024. They added that they “expect the company to remain laser-focused on execution, with positive catalysts from here likely levered to operational milestones and near-term results.”

EVgo CEO Badar Khan said the agreement with the Energy Department “will help us continue to scale our operations to serve the influx of vehicle options that will be available to American consumers in the coming years.”

The news initially sent EVgo shares soaring, but they turned lower in the morning on concerns after the company said in a regulatory filing that if it failed to meet the conditions of the loan guarantees, it would “materially and adversely affect our business.” They bounced back in the afternoon before slipping into negative territory again.

The stock was down 2% about half an hour before the closing bell. EVgo shares have gained about 70% since the start of 2024.