EVgo reorganises management in profitability push
CPO bids to become 'leaner'. But could it become a takeover target?
US CPO EVgo will reshuffle of its executive suite, even as it reiterates its full-year revenue guidance and reports utilisation of its chargers improving in Q4.
Ivo Steklac, chief technology officer, and Tanvi Chaturvedi, chief revenue officer, will depart the company. In their place, the firm will adopt "a simplified organisational structure under which the company’s business development, marketing and technology functions will be streamlined and consolidated with operations, reporting to Dennis Kish, EVgo’s COO". Kish has also been appointed president of the firm.
The company, which is still guiding to a c.$60mn Ebitda loss for 2023, says the "the organisational realignment is designed to allow EVgo to focus on growing its core public charging network business, achieve operational efficiencies, improve the company’s cost structure and accelerate progress toward EVgo’s growth and profitability goals".
"We believe this realignment and resource optimization will allow EVgo to become leaner and more focused on our owned and operated public charging network and will position us for acceleration towards achieving profitability targets while driving superior shareholder returns in the long run," says Badar Khan, EVgo CEO.
The emphasis on becoming leaner may suggest growing cost pressures. At its Q3 results, the company voiced its concerns about strain put on its balance sheets due to delays in funding allocation.
But the CPO — like the US charging industry more broadly — still believes sits on the crest of a wave of demand, both in terms of a state and national installation targets 'push' and an increasing EV adoption 'pull'.
"There is no denying that the market will continue to see exponential growth in the long term — with 300,000 DC fast chargers needed by 2030, up from over 30,000 today, Khan said at Q3 results.
Despite feeling the need to re-org, EVgo still "anticipates reporting full year 2023 financial and operating results that meet or exceed the guidance ranges" given at that point.
This signals that the company expects to report an Ebitda loss of somewhere between $62mn and $66mn for full-year 2023. This guidance was an upgrade after a strong third quarter, in particular on the back of rising utilisation rates.
The company has given preliminary 2023 throughput of approximately 130GWh, while it says utilisation on the EVgo network in December was over 19pc, up from 15pc in September.
EVgo ended 2023 with over 3,500 stalls in operation or under construction, including EVgo extend stalls.
And that scale might attract attention from other players with deeper pockets but much less far down the road on charging infrastructure. Take, for example, the seven-strong coalition of OEMs who announced plans in July to develop a DC public charging network to rival Tesla's superchargers.
Little has been heard since, even as some members, such as Mercedes and GM have unveiled plans for more US charging independently. An EV inFocus source suggests that EVgo might be an attractive partner, or even more, to accelerate the group's plans.
"The group of seven automakers who announced they are building their own charging network will either just partner with EVgo and do it all through EVgo Extend, or they will purchase EVgo," the source suggests.