EVgo (EVGO.US), whose stock price fell to just $1.6 this year, soared more than 13% before the U.S. stock market opened on Friday after the U.S. electric vehicle charging network operator issued a statement saying it had received $1.25 billion in loan support from the U.S. Department of Energy to support the deployment of about 7,500 high-power electric vehicle ultra-fast charging piles across the United States. This loan also highlights the urgent need for the support of electric vehicles and the charging pile network that supports the operation of electric vehicles in the U.S. government’s “carbon emission reduction” ambitions.
EVgo said in a statement that the expansion will increase the total number of charging pile networks owned and operated by the company to at least 10,000 high-power fast charging piles, allowing the company's electric vehicle charging network coverage to more than triple by 2029.
It is understood that this supportive loan is provided under the U.S. Department of Energy’s Section 17 Clean Energy Financing Program and was issued after conditional commitments were received on October 3.
"This public-private partnership will help us continue to expand our charging pile business to meet the vast number of electric vehicle choices that American consumers will have in the coming years." EVgo CEO Badal Khan said in a statement.
This loan is very important for the US charging pile operator EVgo. The company has continued to run into operating difficulties since the Federal Reserve interest rate hike cycle in 2022. The stock price fell from a peak of US$24 in 2021 to the current level of around US$6.2, and once plummeted to US$1.60 this year. This loan of US$1.25 billion is even much higher than EVgo’s market value. As of Thursday’s U.S. stock market close, EVgo’s total market value was approximately US$6.68.
The core logic behind EVgo's plummeting stock price and operating difficulties is that in the macro environment where central banks such as the Federal Reserve have maintained high interest rates for a long time, global demand for electric vehicles has cooled significantly since the second half of 2022, and the gradual withdrawal of government subsidies related to global electric vehicles has further weakened the demand for electric vehicles, which in turn has led to long-term sluggish performance of charging pile network operator EVgo. This US$1.25 billion loan is a timely help for EVgo.