Electric-vehicle charging is going through “hyperbolic growth” as a combination of government policy and market forces accelerates EV adoption, and one public company may lead the way in that infrastructure buildout.
That’s from Chris McNally at Evercore ISI, who started coverage of EVgo Inc.
with the equivalent of a buy rating and a price target of $18, representing a 56% upside from Wednesday prices.
EVgo went public earlier this month after a merger with a blank-check company. A couple of weeks later General Motors Co.
announced it was one of its partners in a new charging service for fleet electric vehicles, or those owned by businesses and organizations.
“EVgo is a leading owner and operator of DC fast charging locations, a critical piece of EV infrastructure, which will enable faster EV adoption in the U.S.,” Evercore’s McNally said in his note.
With more than 800 sites across the U.S., the company enjoys “a leading market position” in a market expected to experience growth around 25% for the next two decades.
Privately owned EVs are mostly charged at home, but external charging is needed for fleet EVs, or those that are rentals, rideshare vehicles, or company cars as well as the occasional need from commercial and personal EVs.
The company is “a pure-play investment” on (DC fast charging) charging and charging as a service, McNally said, with its proprietary algorithms analyzing census and other data sources to pinpoint premium and convenient locations for charging stations.
Moreover, EVgo is targeting relationships with “key auto OEMs, which enables superior customer capture, is leaning in to the fleet market, which demands fast charging due to the business model, and is the most ESG-friendly of the EV
charging companies,” sourcing its electricity from renewables, McNally said.
EVgo shares have gained about 9% this year, compared with gains around 17% for the S&P 500 index.