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At Washington’s Union Station, electric vehicles can charge at an EVgo station.
Getty Images/AFP/Jim Watson
On Friday, another electric vehicle charging firm went public.
EVgo
After completing its merger with Climate Change Crisis Real Impact I Acquisition Corp, a special purpose acquisition company, on Thursday, it began trading on the New York Stock Exchange under the symbol EVGO. Investors can expect EVgo stock to rise as a result of the SPAC merger’s completion.
On Thursday, the Climate Change stock (ticker: CLII) closed at $14.36. The stock was expected to open between $14.85 to $15 on Friday, up 3 percent to 5 percent. In late morning trade, shares were up around 4%. Star Peak Energy Transition is an example of a SPAC merger that failed (STEM). On April 29, the stock soared more than 4% under its new symbol before finishing up 1.7 percent on the first trading day. There are also some more dramatic cases. Around the time it concluded the SPAC transaction, Hyliion’s (HYLN) stock jumped about 21%. The stock of QuantumScape (QS) jumped 57 percent on its first day of trading. There are a few reasons why a stock rises after a SPAC merger: A SPAC merger, for example, must be approved by SPAC shareholders. When they accept the merger, the possibility of it being rejected is eliminated. Another factor is that mutual funds and index funds frequently wait until a merger is completed before investing. After the agreement is finalized, funds can purchase shares that suit their investing styles and objectives. The stock of Climate Change/EVgo is up nearly 34% year to date, outperforming the S&P 500 and Dow Jones Industrial Average, but it closed at $22 on the day of the merger announcement in late January.
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While the early excitement over expanded EV-charging infrastructure has faded, the business future for EVgo and its counterparts is considerably brighter. CEO Cathy Zoi told Barron’s that EVgo, which claims itself as the nation’s largest public fast-charging EV network and the first powered entirely by renewable energy, has experienced “an upswing in EV sales.” She estimates that by 2027, there would be more than 9 million electric vehicles on American roads, which is 30% higher than she predicted when the firm announced the merger six months ago. The company’s sales cycle is also shortened as interest in EVS grows. Customers are more concerned with ensuring that there is sufficient EV charging capacity in malls, companies, and other public places. The limiting barrier in EV-charging rollout these days, according to Zoi, isn’t client interest. It’s the time it takes to get all of the charging stakeholders on the same page—from local governments to EVgo, their consumers, and power utilities. EVgo can construct a charging station in four to eight weeks, but it takes an average of 18 months “from contracting to a utility [eventually] electrifying the site,” according to Zoi. Because of this logistical problem, the business launched its “linking the watts” program to share best practices, with the goal of cutting the time it takes to set up a fast-charging station to roughly six months. EVgo is one of five electric vehicle charging companies that have gone public via the SPAC route. The most valuable is ChargePoint (CHPT), which has a market capitalization of around $10 billion based on its fully diluted share count. EVgo is the second most valued, with a market cap of $3.8 billion based on fully diluted shares outstanding post-merger. The final three have yet to complete their SPAC mergers. Volta and Volta are combining.
Purchasing a Tortoise
II (SNPR). TPG Pace Beneficial Fiance and EVbox are merging (TPGY). Kensington Capital Acquisition II and WallBox are merging (KCAC). The market capitalizations of the final three companies are approximately $2 billion, $1.8 billion, and $1.8 billion, respectively. Al Root can be reached at allen.root@dowjones.com./n
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