EVgo’s partnership with Pilot Flying J will ‘improve drivers’ confidence’ to buy an EV: CEO

EVgo CEO Cathy Zoi joins Yahoo Finance Live to discuss EVgo’s growth amid federal initiatives for charging infrastructure, its partnership with Pilot Flying J rest stops, and the rate of EV adoption.

Video transcript

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SEANA SMITH: Let's take a look at EVgo, a provider of EV charging stations. Now, it is a trending ticker today on Yahoo Finance, shares closing up just about 22% after reporting a huge jump in sales, revenue reaching just over 27 million for its most recent quarter. That's up nearly 300% from just a year ago.

So joining us now, I want to bring in Cathy Zoi, CEO of EVgo, as well as our senior autos reporter Pras Subramanian. Thank you both. Cathy, it's great to see you. So certainly, your stock has really been going gangbusters, up nearly 60% since the start of the year. What's the biggest driver behind some of that massive growth that you're seeing in your business?

CATHY ZOI: Electrification of transportation is happening. I mean, it is-- $1.2 trillion is getting invested in making EVs by the car companies. And all of those new EVs need to get charged. And it's a massive sector. We've been around for a while. And we do what we do really well. And we're continuing to exploit that growth to make money for our investors.

PRAS SUBRAMANIAN: Hey, Cathy, Pras here. So noting in your release about how energy output is increasing tremendously year over year, things like that, also talking about your partnership with Flying J, the travel centers there, how is that going? And are we going to see more of these partnerships with those types of high-traffic partners going forward?

CATHY ZOI: Well, look, I think so. Look, our partnership with Pilot Flying J is really, really fun. I mean, one of the things that-- they're on all the highway corridors across America. I mean, most Americans live with within a short distance of a Pilot Flying J if they live near a highway. And so us being able to electrify those is going to improve drivers' ability, their confidence in being able to buy an EV and go on a big road trip. And so we love that partnership.

The federal government has a commitment to having fast charging stations every 50 miles on America's Interstates. So that's a big sort of-- what's on the come and what's going to be happening over the next few years.

PRAS SUBRAMANIAN: So it kind of makes me question-- what are the ideal locations for some of these public charters beyond, let's say, highway locations?

CATHY ZOI: Well, it's interesting, Pras. We've been around since-- for more than a decade. Before this recent project with Pilot Flying J, EVgo focused mostly on metropolitan areas because that's where most of the driving gets done. And our thesis is, since electricity is everywhere, we put our charters where people are going to be anyway.

So our favorite places to put our fast chargers-- and I'm looking at some of the footage as we talk-- is in grocery store parking lots, big box stores, municipal parking lots that are near a bunch of other convenient things, parks where your kids are going to go play because you're going to spend-- I don't know-- somewhere between 15 and 30 minutes charging your EV. You might as well go and do-- get some-- get a cup of coffee while you do it.

So we love being near those amenities. And that's where most of our metropolitan chargers are located today.

SEANA SMITH: Cathy, I got to ask you because clearly, there is a massive need now for chargers. But we did have the headline a couple of weeks ago that Tesla does have plans to open some of its charging locations to all EVs. What kind of effect or impact do you see this having on your business, if at all?

CATHY ZOI: Well, look, we-- EVgo charges all EVs. So we charge Teslas as well. And we love the fact that there are so many Teslas that are out there. The market-- the need for fast charging station locations is enormous. It's immense. And so I think that this rising tide is going to mean that Tesla is going to have some folks charging on its stations that are non-Teslas.

I can tell you that those Tesla charging stations are pretty busy with Teslas today. So we're hoping that the converse is true, that some of those Teslas are going to come over to EVgo while we continue to charge the dozens and dozens of new EV models that are coming to market.

PRAS SUBRAMANIAN: Cathy, you mentioned the Biden White House talking about that national charging network with the goal of 500,000 chargers by 2030. Seeing some reports by McKinsey, for instance, that talk about we need millions of chargers by 2030, not just 500,000. So how do you think we bridge that gap and sort of get there with where we are right now?

CATHY ZOI: One of the things, once there are more-- once there's a critical mass of EVs on the road, the charging-- the chargers will all come. What what's clever about the policy initiatives is that they are building a bridge between when there are enough EVs to have this be completely sustainable and today, where we actually vet-- those grants, those funding support programs help make it possible for private companies like EVgo to have the projects pencilled.

So we're really, really excited about that. We won't always need government incentives to have-- to extend the charging network. But today, when frankly, we went from-- it's growing. Last year it was 3% of cars that got sold were EVs. This year it doubled to 6%. But we're still a far cry from having every car that gets sold be an EV.

So it's in these early moments that government policy, government incentives can help build that bridge for capital markets to create that confidence to invest in this infrastructure that will be absolutely essential going forward.

PRAS SUBRAMANIAN: So kind of a follow-up here. When do you think we'll get to the point where these chargers will be as ubiquitous as gas stations, for instance? How long will that take?

CATHY ZOI: How long? Well, we don't like the gas station model because, as I mentioned, we actually prefer that you can charge and do something else at the same time. But in terms of ubiquity, I think that it's-- we're on that trajectory now . EVgo and others, we're all building right now to satisfy the demand.

We're thinking that there's going to be a 7X increase in the number of EVs by 2030. There will similarly be an increase in the number of fast charging locations and, let's not forget, workplace locations. So what we do is we build fast chargers where the dwell time of that location matches a fast charge time.

So where are people going to be for 15 to 30 minutes? That's a perfect spot for a fast charger.

SEANA SMITH: Cathy, what about the-- Oh, I'm sorry.

CATHY ZOI: You're going to be there all day, those are Level 2-- sorry, go ahead.

SEANA SMITH: But Cathy, what about the Biden administration's stressing just made in America? We know that that is a headwind potentially here for your company. Is that going to slow the rollout of your stations, at least in the near term?

CATHY ZOI: In the very, very near term. What we're doing, we're deploying ultra-fast chargers that, at the moment, nobody makes them in America. But our two suppliers that we're currently using are already having factories under construction.

So the policy initiatives are helping to create that onshore capacity to create jobs, do the made in America, absolutely. What it do-- will do in the near term is probably shift some of those stations that get deployed that we're thinking we would deploy in 2023, those may shift to 2024. So it's not a material change, but there will likely be a slowdown in 2023 for things that get-- actually get-- are able to get built, given the new guidelines that have come out from the federal government.

SEANA SMITH: Cathy Zoi, great stuff. Thanks so much for joining us, CEO of EVgo. We really appreciate it. And of course, thanks to Pras as well.

CATHY ZOI: My pleasure, thank you.