EVgo Inc.

Thank you for standing by. My name is Bailey, and I will be your conference operator today. At this time, I would like to welcome everybody to the EVGO Inc. Q1 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star and one. Please limit your question to one initial and one follow-up question. And I will now turn the call over to Heather Davis. You may begin.

Good morning, and welcome to EVgo's first quarter 2023 earnings call. My name is Heather Davis, and I am the head of investor relations at EVgo. Joining me on today's call are Kathy Zoi, EVgo's chief executive officer, and Olga Shevrenkova, the company's Chief Financial Officer. Jonathan Levy, EVGo's Chief Commercial Officer, will join us for the Q&A portion of the call. Today, we will be discussing EVGo's financial results for the first quarter of 2023 and outlook for the remainder of 2023, followed by a Q&A session. Today's call is being webcast and can be accessed on the Investors section of our website at investors.evgo.com. The call will be archived and available there along with the company's earnings release and investor presentation after the conclusion of this call. During the call, management will be making forward-looking statements that are subject to risks and uncertainties including expectations about future performance. Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including in the risk factor section of our most recent annual report on Form 10-K. The company's SEC filings are available on the investor section of our website. These forward-looking statements apply as of today and we undertake no obligation to update these statements after the call. Also, please note that we will be referring to certain non-GAAP financial measures on this call. Information about these non-GAAP measures, including a reconciliation to the corresponding GAAP measures, can be found in the earnings materials available on the investor section of our website. With that, I'll turn the call over to Kathy Zoy, EVGO CEO.

Good morning, everyone, and thank you for joining today. What an exciting time for EVgo and for the EV industry overall. We believe we're participating in a once in a century sectoral transformation that is underway and unstoppable. As a market leader with a strong track record of delivery to date, EVgo is looking forward to pursuing the plethora of value creating growth opportunities that lie ahead. Building on our strong 2022, EVgo started 2023 with a phenomenal quarter of growth in all core areas, stalls in operation, network throughput, and revenue. In Q1, EVgo delivered over $25 million in revenue, representing 229% year-over-year revenue growth. Network throughput was 17.9 gigawatt hours, an increase of 124% from the first quarter of 2022. And network throughput is growing significantly faster than electric vehicles in operation, demonstrating the leverage of EVgo's fundamental business thesis. EVgo increased stalls in operation or under construction to around 3,100 at the end of the first quarter, growing 48% year over year. We energized a record of approximately 220 new stalls in the quarter, a 69% increase from the first quarter of 2022. Utilization on the network is growing rapidly as well. The top 10% of EVGO stalls have utilization greater than 25%. And the top 20% of stalls demonstrate utilization of over 20%. California, taking its entirety across all metropolitan, corridor, and rural markets, has statewide utilization above 10%. We're seeing metro areas in Texas, Florida, and Nevada with double-digit utilization as well. These up-and-to-the-right results from Q1 and those we reported on our last earnings call from the entirety of 2022 are a testament to the long-term opportunity at EVgo that you've heard us describe since we became a public company a couple years ago. Today, I'll lean into three key pillars supporting EVgo's success. First, EVgo's business model is leveraged to increasing EV adoption. When EV sales grow, EVgo's business grows with it. Second, EVgo's robust market position is built on a foundation of value-creating blue-ribbon partnerships with OEMs, governments, site hosts, and fleets. These commercial partnerships continue to grow and expand. And third, EVgo's technology leadership is charting the course for EV charging and EV ownership more broadly, creating the means for individual drivers, fleet businesses, automakers, retailers, and governments to seamlessly be part of the transportation revolution that is upon us. First, let's talk about EVgo's business model leveraged to the growth in EVs. The market for electric vehicles is continuing to grow at a blistering pace. In 2022, there were 2.2 million EVs in operation, and that is expected to grow to over 33 million by 2030, a 40% compound annual growth rate. Bloomberg's 2022 BNES report predicted that more than half of all passenger cars sold in the U.S. will be EVs by 2030. And I'll note optimistically that we've already exceeded BNES' original EV adoption figures for the early part of this decade. As mass adoption of EVs is underway in the United States, there is a need for more charging and more fast charging in particular. S&P Global has predicted that the U.S. would need approximately 170,000 fast chargers by 2030, and 8x growth from today. Apartment dwellers, high mileage drivers such as rideshare drivers, and fleets are all going electric. And EVGO has found that even drivers who primarily charge at home rely on fast charging for day tripping, longer road trips, and even kilowatt hour top-ups while doing errands around town. Hence, The increase in utilization I referenced earlier that we're witnessing in a growing number of markets across the country, well beyond California. We're committed to building this business in a manner that is sustainable and highly profitable for our shareholders. As you know, EVGO's core business is in asset ownership. We carefully invest in charging infrastructure where we believe it will deliver our targeted returns through ever-increasing asset utilization. We operate a best-in-class public network and expanding that own network to new geographies that pass our rigorous investment hurdles. And we own and operate charging assets for a variety of fleet customers. In addition, we apply our expertise in siting, building, and operating charging infrastructure to a creative capital light business line serving both retail and fleet segments. EVgo extends and our behind-the-sense offerings to fleets expand EVgo's competitive position and broaden EVgo's customer reach, while providing us with additional predictable recurring revenue streams as a builder, operator, and integrator, but insulating us from utilization risks in markets where we don't want that exposure. Building a business leveraged to rising EV adoption has proven to be a sound commercial thesis. Next, let's talk about the important pillar of partnerships to EVgo's market leadership and financial position. EVgo has a long history in cultivating lasting business relationships with marquee partners that create meaningful commercial win-wins. On the OEM side, you've heard us discuss GM, Toyota, Subaru, and Nissan in particular, and the countless brand name retail partnerships like Target, Safeway, Kroger, Whole Foods, Home Depot, Lowe's, Chase Bank, and the recent addition, Chipotle, where on-site fast charging creates foot traffic for brick-and-mortar stores and restaurants. EVGO's partnerships with utilities and government funders are equally important financial contributors to our growth to date, and we expect them to continue to be. With respect to our current auto manufacturer partners, OEMs provide EVGO with capital funding to offset development costs. They create and pay for fast-charging credit programs to attract EV drivers to EVgo, or they procure EVgo's proprietary software solutions to enhance their EV drivers' experience. And with the OEM investment in EVs on the rise, we're hopeful EVgo's collaboration with the OEMs will deepen further. GM, the number one U.S. carmaker in 2022 and one of EVgo's landmark partners, is investing more than $35 billion in electric vehicles and autonomous vehicles over the next several years. In February, GM committed to producing about 400,000 EVs during 2024, a stepping stone to meet its goal of reaching annual production of 1 million EVs by 2025. GM has announced they will have nine EV models available in the U.S. by the end of this year, including versions of the popular Chevy Silverado pickup truck as well as the Equinox and Blazer SUVs. Nissan accelerated its EV plans in the U.S. and committed nearly $18 billion to electrify more of its overall lineup. Nissan plans to introduce 19 EVs by 2030, an increase from its original goal of 15. They expect 44% of total sales will be electric by then. Toyota, building on their introduction of the fully electric BZ4X last year, is investing $35 billion in EVs globally. Similarly, Subaru, which introduced the Solterra last year, expects to offer several more EV models by 2025 as it continues to ramp its investments in electrification. With EVgo being leveraged to growth in EVs on the road, these are particularly exciting commitments from EVgo's partner, OEM. Another important area is rideshare. where EVgo's partnerships with both Lyft and Uber continue to deliver both network throughput and revenue, as well as positive environmental benefits to the communities in which drivers on their platform live and work. As we shared before, rideshare drivers are ideal customers for fast charging. A rideshare driver typically drives more in a day than most people do in a week, and they need to be able to charge fast so they can get back on the road. With such a user profile, we see Uber and Lyft drivers increasing utilization on our network significantly, with Q1 throughput more than tripling from a year ago. Both Uber and Lyft are great partners and are heavily marketing the benefits of EVs for both their drivers and their riders. Uber's comfort electric option is now available in nearly 40 cities throughout North America, an important step in the company's effort to reach an easy-only fleet by 2030. Likewise, Lyft is helping drivers make the switch to EVs, offering a cash bonus for drivers who offer at least 50 rides using a qualified EV. Site hosts are also important partners at EVgo. We provide the charging, our site host partners offer great amenities while a driver charges, and our relationships with these marquee partners are deepening. Through our sophisticated network planning tool, EVgo has identified literally thousands of locations across America where shareholder value could be created if EVgo builds a fast charging station at that partner's site. Earlier today in our earnings release, EVgo announced we have entered into a new agreement to expand our collaboration with Chevron, first launched in 2015 to develop EV charging sites in major California markets. EVgo will now offer Chevron and Texaco locations across the U.S. turn-key fast charging solutions with a variety of ownership models, including EVgo Extend. There are more than 8,000 Chevron and Texaco retail stations across the U.S. that will have access to EVgo's expertise and solutions, including fast chargers up to 350 kilowatts. Under the agreement, EVgo will provide hardware, design, and construction of charging at these sites, as well as operations and maintenance, networking, and software solutions. Chevron and its independently owned retailer and marketer network will also be well positioned to take advantage of the funding available through the government's National Electric Vehicle Infrastructure, or NEVI, program. With Chevron as the latest example of a deepening retailer partnership, EVgo is excited about the opportunity to bring more convenient fast-charging options to EV drivers wherever they need to be. And on fleet, The deepening of partner relationships is again the theme for this quarter, with additional sites added by two of EVgo's current fleet partners. MHX, a Class 8 truck fleet, and a national food and beverage company are each building their second EVgo dedicated fleet charging site, with each also using EVgo Optima as their fleet management software. While it's still early days in fleet electrification, we're excited to have EVgo's business grow alongside the EV investments fleet operators are making as more vehicles become available to them. EVgo's partnership with government policymakers is critical to our success as well. And the federal government recently announced it is taking more bold action to spur even faster growth of electrification. On top of the investments under the bipartisan infrastructure law, and the Inflation Reduction Act that we discussed on our last earnings call, in April, the Biden administration announced a tighter overall regulatory framework for the auto industry, including new vehicle emission standards through 2032. Once the new emission standards are in place, the EPA estimates that EVs could account for 60% of all new passenger car sales by 2030 and 67% by 2032. Notably, this would surpass even DNS forecasts. Now, returning to the $5 billion in federal funding through the NEVI program that I just mentioned, the latest is that this particular tailwind is more like a tail breeze at the moment, directionally terrific, but moving more slowly than originally indicated by government officials. The status is this. No states have made NEVI awards yet. Several states have released RFPs and are reviewing proposals from EVGO and others. And the vast majority of states haven't yet solicited proposals from the industry. partially because the state's original program design needed to incorporate the final program guidelines and Buy America requirements that the federal government issued in February. Notwithstanding the current time lag, however, EVGO remains excited about the potential to apply NEVI funds to both owned assets and stations deployed under EVGO Extend, with the majority of financial benefits likely to be realized in 2024 and beyond. Similarly, we remain enthusiastic about the opportunities for the expansion and extension of 30C tax credits under the IRA. But while new guidance for the consumer vehicle tax credits have been issued, the IRS has not yet issued any further implementation guidance for the 30C infrastructure tax credit. The industry is eagerly awaiting Treasury's guidance. And finally, let me turn to the third pillar of EVGO's success, technology innovation. We've been a technology leader in the EV charging space, and innovation continues to be an important differentiator for EVGo, creating value for drivers and for deepening and widening our own competitive moat. I mean, think about it. Now that we can all do one-click ordering on Amazon, or cashless car service with an app, or electronic boarding passes when we fly, it's sometimes hard to remember the olden times, really less than 10 years ago, when we had to place orders by phone, or get cash from an ATM, or stand in a long line at the airport to get a paper boarding pass. The EV industry is young, and our aim at EVgo is to make the EV charging experience as seamless as one-click ordering. This requires a highly sophisticated approach to our own technology. While we don't manufacture the charging hardware, we painstakingly specify the attributes of each charging product we deploy. undertaking rigorous pre-market testing in our lab related to charger performance, interoperability, and reliability. In fact, a couple of weeks ago, EVgo hosted research leaders from a number of the Department of Energy's national laboratories for a detailed run-through of the anatomy of a charging session and the industry-wide imperatives for creating uniform reliability and enhanced customer experience. As you've heard me say, EVgo's fast chargers are complex machines, that run hundreds of thousands of lines of code and connect in real time to our network management platform and customer-facing applications, which in turn run millions of lines of code and integrate dozens of additional platforms across the EV ecosystem, such as payment processing, industry enrolling partners, and EV OEMs, the correct functioning of all of which is essential to creating an exemplary customer experience. Practically speaking, EV chargers close to 50 different models of EVs on our network today, each with its own unique charging behavior governed by battery performance and software. A technology marriage has to work not just between EV goes charging hardware and full software stack, but also between our EV chargers and the hardware and software of the EV itself, and between EV chargers and driver cell phones, and between EV chargers and utilities delivering the electricity to the chargers. and between EV chargers and site host retailers, and between the EV charging networks with whom we interoperate. At EVgo, we welcome these demands, and in fact, we've upped the ante, looking beyond basic functionality. We created Auto Charge Plus so that drivers can charge their car without swiping a credit card or tapping an app. We built EVgo reservations so a driver can be sure a charger is available when they need one. We built EVgo inside so that OEMs could help their customers find the closest charging station in the dash of their EV. We built pay with PlugShare to both find chargers and help manage charging, which we are currently piloting at all of EVgo's chargers in the LA area. We've partnered with Amazon so that a driver will soon be able to ask Alexa to help them find a charger. And we built EVgo Advantage to give drivers special deals while they charge. And today announced the latest offering here, entering into a new agreement with Audible to bring trial memberships to EVgo customers later in 2023, delivering audio books to EV drivers while they charge. From deploying the first 350 kilowatt charger in the US to pioneering power sharing technology to where we are today, EVgo is setting the benchmarks of what the EV driver experience should be and what our B2B partners will count on when serving their EV driving customers. With innovation in our DNA, you can bet there's more good stuff to come. With that, I'll turn the call over to EVgo CSO, Olga, to give more detail on first quarter results.