What changed in this filing

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Item 1A. Risk Factors

2024-03-06 compared with 2023-03-30 · 231 added, 258 removed, 626 unchanged (44% of the section changed)

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If EVgo does not meet EVgo’s obligations under this agreement, EVgo may not be entitled to payments from GM and may be required to pay liquidated damages, which may be significant.

● EVgo will be required to install a substantial number of chargers under EVgo’s agreement with the Pilot Company and GM.

If EVgo does not meet EVgo’s obligations under this agreement, EVgo may not be entitled to payments from the Pilot Company and may be required to pay liquidated damages, which may be significant.

● EVgo is committed to purchasing a large number of chargers under the Delta Charger Supply Agreement and Purchase Order, which will require significant capital expenditures, some of which may not be immediately offset by payment by EVgo’s counterparty under the Pilot Infrastructure Agreement.

● EVgo relies on a limited number of vendors for EVgo’s charging equipment and related support services.

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● EVgo may need to raise additional funds, and these funds may not be available when needed or may only be available on unfavorable terms, which could impact the Company’s ability to fund its operations, its growth and the build-out of the Company’s network.

● Continuing or worsening inflationary issues and associated changes in monetary policy may result in increases to the cost of EVgo’s charging equipment, other goods, services and personnel, which in turn could cause capital expenditures and operating costs to rise.

● EVgo is susceptible to risks associated with an increased focus by stakeholders and regulators on climate change, which may adversely affect its business and results of operations.

● EVgo is dependent upon the availability of electricity at EVgo’s current and future charging stations.

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● Rideshare and commercial fleets may not electrify as quickly as expected and may not rely on public fast charging or on EVgo’s network as much as expected.

Future demand for battery EVs from the medium- and heavy-duty vehicle segment may not develop as anticipated or take longer to develop than expected.

● EVgo derives a material portion of EVgo’s revenue from the sale of regulatory credits.

Future demand for or availability of battery EVs from the medium- and heavy-duty vehicle segment may not develop as anticipated or take longer to develop than expected.

● EVgo derives revenue from the sale of regulatory credits.

There are a number of factors beyond EVgo’s control that could have a material adverse effect on EVgo’s ability to generate such revenue.

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Risks Related to EVgo’s Technology, Intellectual Property and Infrastructure

● EVgo’s business may be adversely affected if EVgo is unable to protect its technology and intellectual property from unauthorized use by third parties.

● EVgo’s business may be adversely affected if EVgo is unable to maintain, protect and enforce its technology and intellectual property.

● The current lack of industry standards may lead to uncertainty, additional competition and further unexpected costs.

Financial, Tax and Accounting-Related Risks

● EVgo has identified material weaknesses in its internal control over financial reporting and any inability to timely remediate these material weaknesses or to otherwise establish and maintain an effective system of internal control over financial reporting may harm investor confidence and cause a decline in the price of the Company’s Class A common stock.

● EVgo has identified a material weakness in its internal control over financial reporting, and any inability to timely remediate this material weakness or to otherwise establish and maintain an effective system of internal control over financial reporting may harm investor confidence and cause a decline in the price of the Company’s Class A common stock.

● Changes to applicable U.S.

tax laws and regulations or exposure to additional income tax liabilities could affect EVgo’s and EVgo OpCo’s business and future profitability.

● Continuing or worsening inflationary pressures and associated changes in monetary policy may result in increases to the cost of EVgo’s charging equipment, other goods, services and personnel, which in turn could cause capital expenditures and operating costs to rise.

Risks Related to EVgo’s “Up-C” Structure and the Tax Receivable Agreement

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As a result, EVgo qualifies for and relies on, exemptions from certain corporate governance requirements that would otherwise provide protection to stockholders of other companies.

● Provisions in EVgo’s Second Amended and Restated Certificate of Incorporation (the “Charter”) and Delaware law may have the effect of discouraging lawsuits against EVgo’s directors and officers.

● Provisions in EVgo’s Third Amended and Restated Certificate of Incorporation (the “Charter”) and Delaware law may have the effect of discouraging lawsuits against EVgo’s directors and officers.

● Provisions in EVgo’s Charter may inhibit a takeover of the Company, which could limit the price investors might be willing to pay in the future for Class A common stock and could entrench management.

● EVgo’s Warrants are exercisable for EVgo’s Class A common stock and the exercise of such Warrants would increase the number of shares eligible for future resale in the public market and result in dilution to EVgo’s stockholders.

Risks Related to EVgo’s Business

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EVgo’s growth and success are highly correlated with and thus dependent upon the continuing rapid adoption of and demand for EVs and OEMs’ ability to supply such EVs to the market.

EVgo’s growth is highly dependent upon the adoption of EVs both by businesses and consumers.

The market for EVs is still rapidly evolving, characterized by rapidly changing technologies, increasing consumer choice as it relates to available EV models, their pricing and performance, evolving government regulation and industry standards, changing consumer preferences and behaviors, intensifying levels of concern related to environmental issues and governmental initiatives related to climate change and the environment generally.

EVgo’s growth is highly dependent upon the continued rapid adoption of EVs by governments, businesses and consumers.

The market for EVs is still rapidly evolving, characterized by rapidly changing technologies, increasing consumer choice as it relates to available EV models, their pricing and performance, evolving government regulation and industry standards, changing consumer preferences and behaviors, intensifying levels of concern related to environmental issues and government initiatives related to climate change and the environment generally.

EVgo’s revenues are driven in large part by EV drivers’ driving and charging behavior.

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Public DC fast charging may not develop as expected and may fail to attract projected market share of total EV charging.

If the market for EVs develops more slowly than expected, or if demand for EVs decreases, EVgo’s growth would be reduced and EVgo’s business, prospects, financial conditions, and operating results would be harmed.

Additionally, EVgo’s ability to capture the growth in the EV market, grow EVgo’s customer base and achieve and sustain profitability will depend, to a significant extent, on EVgo’s ability to effectively expand EVgo’s sales and marketing operations and activities.

The market for EVs could be affected by numerous factors, such as:

If the market for EVs develops more slowly than expected, or if demand for EVs develops more slowly than expected or decreases, EVgo’s growth would be reduced, and EVgo’s business, prospects, financial conditions, and operating results would be harmed.

The market for EVs, and ultimately EV charging, could be affected by numerous factors, such as:

● perceptions about EV features, quality, driver experience, safety, performance and cost;

● perceptions about the limited range over which EVs may be driven on a single battery charge and about availability and access to sufficient public EV charging stations;

● competition, including from other types of alternative fuel vehicles (such as hydrogen fuel cell vehicles), plug-in hybrid EVs and high fuel-economy ICE vehicles;

● increases in fuel efficiency in legacy ICE and hybrid vehicles;

● competition, including from other types of alternative fuel vehicles (such as hydrogen fuel cell vehicles), plug-in hybrid EVs, high fuel-economy ICE vehicles and other types of charging methods (e.g., battery swaps);

● volatility in the price of gasoline and diesel at the pump;

● EV supply chain shortages and disruptions, including as a result of the COVID-19 pandemic, which include but are not limited to availability of certain components (e.g., semiconductors and critical raw materials necessary for the production of EVs and EV batteries), the ability of EV OEMs to ramp-up EV production and technological and logistical challenges (such as component shortages, exacerbated port congestion and intermittent supplier shutdowns and delays and product recalls due to quality control issues), which have resulted in additional costs and production delays and availability of batteries and battery materials;

● concerns regarding the reliability and stability of the electrical grid;

● EV supply chain shortages and disruptions, which include but are not limited to availability of certain components (e.g., semiconductors and critical raw materials necessary for the production of EVs and EV batteries), the ability of EV OEMs to increase and on-shore EV production, and technological and logistical challenges (such as component shortages, exacerbated port congestion and intermittent supplier shutdowns and delays and product recalls due to quality control issues), which have resulted in additional costs and production delays and availability of batteries and battery materials;

● concerns regarding the reliability, stability and capacity of the electrical grid;

● the change in an EV battery’s ability to hold a charge over time;

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● government regulations and economic incentives, including adverse changes in, or expiration of, favorable tax incentives related to EVs, EV charging stations or decarbonization generally;

● relaxation of government mandates or quotas regarding the sale of EVs;

● government legislation and regulations restricting the operation of autonomous vehicles;

● relaxation of government mandates or quotas regarding the sale of EVs and fuel economy standards;

● the number, price and variety of EV models available for purchase;

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In addition, sales of vehicles in the automotive industry can be cyclical, which may affect growth in acceptance of EVs.

It is uncertain how macroeconomic factors will impact demand for EVs, particularly since they can be more expensive than traditional gasoline-powered vehicles.

It is uncertain how macroeconomic factors will impact demand for EVs, particularly because EVs can be more expensive than traditional gasoline-powered vehicles.

Furthermore, because fleet operators often make large purchases of EVs, this cyclicality and volatility in the automotive industry may be more pronounced with commercial purchasers, and any significant decline in demand from these customers could reduce demand for EV charging and EVgo’s products and services in particular.

Moreover, any legislative or regulatory restrictions on the operation or growth of the autonomous vehicle industry, or curtailed investment in the autonomous vehicle industry, could limit demand for EV charging from operators in the autonomous vehicle industry.

While many global OEMs and several new market entrants have announced plans for new EV models, the lineup of EV models with increasing fast charging needs expected to come to market over the next several years may not materialize in that timeframe or may fail to attract sufficient customer demand.

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EVgo has experienced rapid growth in recent periods.

For example, the number of employees has grown from 57 at December 31, 2017 to 295 at March 1, 2023.

The expected continued growth and expansion of EVgo’s business may place a significant strain on management, business operations, financial condition and infrastructure and corporate culture.

With continued fast growth, EVgo will be required to continue developing, implementing, and enhancing its information technology systems and internal control over financial reporting and related procedures.

The implementation, maintenance, segregation, and improvement of these systems require significant management time, support and cost and there are inherent risks associated with developing, implementing, improving, and expanding core systems as well as updating current systems, including disruptions to the related areas of business operation.

The implementation, maintenance, segregation, and improvement of these systems require significant management time, support and cost, and there are inherent risks associated with developing, implementing, improving, and expanding core systems as well as updating current systems, including disruptions to the related areas of business operations.

These risks may affect EVgo’s ability to manage its data and inventory, procure parts or supplies or manufacture, sell, deliver and service products, adequately protect its intellectual property or achieve and maintain compliance with, or realize available benefits under, tax laws and other applicable regulations.

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EVgo may also face risks to the extent such third parties infiltrate the information technology infrastructure of EVgo’s contractors.

To manage growth in operations and personnel, EVgo will need to continue to improve EVgo’s operational, financial and management controls and reporting systems and procedures.

To manage growth in operations and personnel, EVgo will need to continue to enhance EVgo’s operational, financial and management controls and reporting systems and procedures.

Failure to manage growth effectively could result in difficulty or delays in attracting new customers, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new products and services or enhancing existing products and services, loss of customers, information security vulnerabilities or other operational difficulties, any of which could adversely affect EVgo’s business performance and operating results.

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EVgo’s inability to comply with these and other sustainability requirements in the future could adversely affect sales of and demand for its products.

See “ —Risks Related to Legal Matters and Regulations – Increasing attention to ESG matters may increase EVgo’s costs of compliance and adversely impact EVgo’s business .”

See Part I, Item IA, “Risk Factors — Risks Related to Legal Matters and Regulations — Increasing attention to ESG matters may increase EVgo’s costs of compliance and adversely impact EVgo’s business .”

EVgo’s estimates of market opportunity and forecasts of market growth may prove to be inaccurate.

Estimates of future EV adoption in the U.S., the total addressable market, serviceable addressable market for EVgo’s products and services and the EV market in general are included in this Annual Report.

Market opportunity estimates and growth forecasts, whether obtained from third-party sources or developed internally, are subject to significant uncertainty and are based on assumptions and estimates that may prove to be inaccurate.

Such uncertainty is enhanced by the prevailing geopolitical and macroeconomic environment, including continued uncertainty about the scope, duration, severity, trajectory and lasting impact of the COVID-19 pandemic.

EVgo’s beliefs about the potential for market growth and wider adoption of EVs are subject to significant uncertainty and are based on assumptions and estimates that may prove to be inaccurate.

EVgo’s internal estimates relating to the size and expected growth of the target market, market demand, EV adoption across individual market verticals and use cases, capacity of automotive and battery OEMs and ability of charging infrastructure to address this demand and related pricing may also prove to be inaccurate.

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There are a number of established and emerging EV charging companies operating in the U.S.

that pursue various business models that are constantly evolving, including Electrify America, Blink, ChargePoint, Shell Recharge Solutions (formerly Greenlots), Volta, Tesla, Tritium, IoTecha, Rhombus, BP, Voltera, TerraWatt and Flo as well as certain utilities and retailers.

EVgo competes with some or all of these companies and other competitors across a number of industry segments, including retail and fleet.

that pursue various business models that are constantly evolving, including Blink, Borg Warner (formerly Rhombus), BP, ChargePoint, Electrify America, Flo, IoTecha, Shell Recharge Solutions (formerly Greenlots and Volta), Tesla, and Tritium, as well as certain utilities and retailers.

Additionally, in 2023, a number of OEMs, including BMW, GM, Honda, Hyundai, Kia, Mercedes-Benz and Stellantis, formed Ionna, a joint venture, for the purpose of building a large EV charging network in North America.

EVgo competes (or, in the future, may compete) with some or all of these companies and other competitors across a number of industry segments, including retail and fleet.

The principal competitive factors in the industry include charger count, locations, accessibility and reliability;

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operator brand, track record and reputation;

access to equipment vendors, service providers and policy incentives and pricing.

access to equipment vendors, and service providers;

and policy incentives and pricing.

Competitors may be able to respond more quickly and effectively than EVgo to new or changing opportunities, technologies, standards or customer requirements and may be better equipped to initiate or withstand substantial price competition.

Additionally, historically EVgo has generated a significant portion of its revenue from agreements with OEM partners, and the loss of one or more of these OEM partners as a result of such partners investing in their own EV charging networks (or another EV charging network in which they participate) could adversely affect EVgo’s business and results of operations.

In addition, there are other means for charging EVs, which could affect the level of demand for charging at EVgo’s DCFCs.

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(“Tesla”) continues to build out its supercharger network across the U.S.

for Tesla vehicles and has opened its supercharger network up to non-Tesla EV vehicles in certain non-U.S.

If Tesla were to open its supercharger network to support charging of non-Tesla EVs in the U.S.

as well, demand for charging at EVgo’s sites could decline.

for Tesla vehicles and has opened up a portion of its supercharger network to non-Tesla EV vehicles, which could reduce overall demand for EV charging at other sites, including EVgo’s charging stalls.

Also, other companies sell chargers designed for customers seeking to have on-premises EV charging capability as well as for home or workplace charging, which may reduce the demand for fast charging if EV owners find “slow” charging at a workplace, at home, or other parking locations to be sufficient.

Municipalities may decide to convert street lighting poles and lampposts to public charging points for EV drivers who rent, have no access to home charging, or park their EVs on the street, potentially reducing EVgo’s serviceable markets.

Retailers, utilities or other Site Hosts or commercial, municipal and federal fleet businesses may opt to become owners and operators of public or private EV fast

charging equipment and purchase that equipment and associated management software directly from vendors in the marketplace.

The EV charging business may become more competitive, pressuring future increases in utilization and margins.

Retailers, utilities or other Site Hosts or commercial, municipal and federal fleet businesses may opt to become owners and operators of public or private EV fast charging equipment and purchase that equipment and associated management software directly from vendors in the marketplace.

Further, EVgo’s current or potential competitors may be acquired by third parties with greater available resources.

As a result, competitors may be able to respond more quickly and effectively than EVgo to new or changing opportunities, technologies, standards or customer requirements and may have the ability to initiate or withstand substantial price competition.

In addition, competitors may in the future establish cooperative relationships with vendors of complementary products, technologies or services to increase the availability of their solutions in the marketplace.

The EV charging business may become more competitive, pressuring demand for charging on EVgo’s charging network and therefore EVgo’s network utilization, revenue and margins.

Competition is still developing and is expected to increase as the number of EVs sold increases.

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Given the nascent stage of the industry, a limited number of contractual commercial customers and OEM partners currently account for a substantial portion of EVgo’s income.

For the years ended December 31, 2022 and 2021, two customers represented 42.9% and one customer represented 10.5% of total revenue, respectively.

For the years ended December 31, 2023 and 2022, one customer represented 45.2% and two customers collectively represented 42.9% of total revenue, respectively.

EVgo’s operating projections are currently contingent on EVgo’s performance under EVgo’s commercial contracts.

At least in the short term, EVgo expects that a majority of EVgo’s sales outside of the retail customer market will continue to come from a concentrated number of commercial customers and OEM partners.

EVgo expects a substantial portion of EVgo’s cash receipts in the near future to be from a limited number of OEM partners and, as a result, will be subject to any risks specific to those entities and the jurisdictions and markets in which they operate, including their ability to develop a portfolio of EV models and attract customers for those models.

EVgo expects a substantial portion of EVgo’s cash receipts in the near future to be from a limited number of commercial customers and OEM partners and, as a result, will be subject to any risks specific to those entities and the jurisdictions and markets in which they operate, including OEMs’ ability to develop a portfolio of EV models and attract customers for those models and maintain or expand their investments in EVs and EV charging infrastructure.

EVgo may be unable to accomplish EVgo’s business plan to diversify and expand EVgo’s customer and OEM partner base by attracting a broad array of customers and OEM partners, which could negatively affect EVgo’s business, results of operations and financial condition.

EVgo’s success and growth depends on EVgo’s ability to develop and maintain relationships with automotive OEM and fleet partners.

The success of EVgo’s business depends on EVgo’s ability to develop and maintain relationships with OEMs, such as GM, Nissan, Tesla and others.

These relationships help the Company access new customers and build brand awareness through co-marketing.

EVgo may also benefit from promotional programs sponsored by OEMs, such as prepaid charging credits.

In some cases, EVgo’s OEM partners have agreed to fund capital expenditures related to the build-out of EVgo’s charger network.

For example, GM is providing payments for performance obligations that will help fund the accelerated build-out of 3,250 charger stalls for EVgo’s fast charger network through March 2026.

If EVgo fails to develop and maintain relationships with OEMs, or if OEMs opt to partner with competitors rather than the Company, EVgo’s revenues may decline and EVgo’s business may suffer.

EVgo’s revenue growth will also depend in part on EVgo’s ability to increase sales of EVgo’s products and services to fleet operators, including rideshare operators.

The electrification of fleets is an emerging market, and fleet operators may not adopt EVs on a widespread basis, operate on the timelines EVgo anticipates or rely on public and/or private fast charging and EVgo’s network.

In addition to the factors affecting the growth of the EV market generally, transitioning to an EV fleet can be costly and capital intensive, which could result in slower than anticipated adoption.

The sales cycle could also be longer for sales to fleet operators with formal procurement processes.

Fleet operators may also require significant additional services and support, and if EVgo is unable to provide such services and support, it may adversely affect EVgo’s ability to attract additional fleet operators as customers.

There can be no certainty that EVgo will be able to identify and contract with suitable additional OEM and fleet partners.

To the extent EVgo identifies such partners, EVgo will need to negotiate the terms of a commercial agreement with such partners.

There can be no assurance that EVgo will be able to negotiate commercially attractive terms with additional OEM and fleet partners, if at all.

EVgo may also be limited in negotiating future commercial agreements by the provisions of EVgo’s existing contracts such as “most-favored nations” clauses.

For example, EVgo’s contracts with GM prohibit the Company from entering into agreements for similar programs on terms more favorable than the terms afforded to GM for a limited period of time.

See Part I, Item 1, “ Business — Customers, Partnerships and Strategic Relationships .”

In addition, EVgo may be unable to maintain successful relationships with EVgo’s OEM and fleet partners.

Some of EVgo’s existing agreements require the Company to meet specified performance criteria.

If EVgo fails to meet such criteria, the agreements could be terminated, and EVgo may be obligated to pay significant penalties or other damages.

If an agreement is terminated, any support payments pursuant to the contract would cease.

Finally, if OEMs observe the Company failing to meet EVgo’s specified performance criteria, EVgo’s reputation may be damaged, and it may become more difficult for the Company to establish new partnerships with OEMs.

Any failure to attract and retain OEMs or fleet operators as customers in the future would adversely affect EVgo’s business and results of operations.

EVgo will be required to install a substantial number of chargers under EVgo’s agreement with GM.

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Pursuant to the GM Agreement, EVgo is required to meet certain quarterly milestones measured by the number of charger stalls installed and GM is required to make certain payments based on charger stalls installed.

Under the GM Agreement, EVgo is required to install a total of 3,250 charger stalls by March 31, 2026, 44% of which are required to be installed by December 31, 2023.

Under the GM Agreement, EVgo is required to install a total of 3,250 charger stalls by March 31, 2026.

The GM Agreement calls for a year-over-year increase in annual charger stall additions from 2022 to 2024, flattening in 2025, before declining in the first quarter of 2026.

Meeting these milestones will require additional funds beyond the amounts committed by GM and EVgo may face delays in construction, commissioning or aspects of installation of the charger stalls EVgo is obligated to develop.

In addition, EVgo is required to maintain network availability across the GM network (i.e., the percentage of time a charger stall is operational and available on the network) of at least 95%.

In addition, EVgo is required to maintain network availability across the GM network (i.e., the percentage of time a charger stall is operational and available on the network) of at least 95% across the GM network.

The GM Agreement is subject to early termination in certain circumstances, including in the event EVgo fails to meet the quarterly charger stall-installation milestones or fails to maintain the specified level of network availability.

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If the same deficiency still exists at the end of the quarter immediately following the quarter for which a deficiency notification was delivered, GM may immediately terminate the agreement and seek pre-agreed liquidated damages of up to $15.0 million.

EVgo may not meet the charger stall-installation milestones under the GM Agreement in the future, particularly as a consequence of delays in permitting, commissioning and utility interconnection, including delays associated with the COVID-19 pandemic, as well as industry and regulatory adaptation to the requirements of high-powered charger installation including slower than expected third-party approvals of certain site acquisitions and site plans by utilities and land owners, and supply chain issues.

EVgo may not meet the charger stall-installation milestones under the GM Agreement in the future, particularly as a consequence of delays in permitting, commissioning and utility interconnection, as well as delays related to industry and regulatory adaptation to the requirements of high-powered charger installation including slower than expected third-party approvals of certain site acquisitions and site plans by utilities and land owners, and supply chain issues.

As of February 15, 2024, there were approximately 1,028 charger stalls in the active engineering and construction development pipeline, of which approximately 964 charger stalls had been approved by GM.

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If EVgo does not meet its charger stall-installation milestone in any period, GM will have the right, if it so chooses, to send EVgo a charger stall count breach notice, which would trigger a cure period.

Under the terms of the GM Agreement, GM and EVgo can agree to adjust quarterly charger stall

installation milestones from time to time, provided the quarterly targets for an applicable calendar year must equal the annual target for such year.

Under the terms of the GM Agreement, GM and EVgo can agree to adjust quarterly charger stall installation milestones from time to time, provided the quarterly targets for an applicable calendar year must equal the annual target for such year.

Going forward, it is uncertain if these, or other potential issues in the procurement, installation, or energization of chargers, will be resolved in a timely fashion.

Nissan has the right to terminate its agreements with the Company in certain circumstances.

Nissan has the right to terminate its agreement with the Company in certain circumstances.

Additionally, EVgo may be subject to monetary penalties if EVgo is unable to fulfill EVgo’s obligations under EVgo’s agreements with Nissan.

EVgo has executed two agreements with Nissan North America, Inc.

(“Nissan”) under which EVgo has provided charger construction and installation and certain other services.

Pursuant to the first agreement (the “Nissan 1.0 Agreement”), the Company was required to support, maintain and make available at least 850 chargers through July 2021, and purchasers or lessees of Nissan LEAF EVs in certain markets could receive charging services at EVgo stations or participating third-party charging stations.

The Company fulfilled all build, support and maintenance obligations under the Nissan 1.0 Agreement.

The second agreement between EVgo and Nissan, entered into in June 2019 (the “Nissan 2.0 Agreement”), provides for joint marketing activities, charging credit programs for purchasers or lessees of Nissan EVs, and a capital-build program.

The Nissan 2.0 Agreement has been amended several times, including most recently in the fourth quarter of 2022 (the “Nissan Amendment”) to, among other things, adjust the allocation of the value of unused charging credits and to provide new offerings for purchasers or lessees of certain Nissan EV models.

Under the joint-marketing activities provisions of the Nissan 2.0 Agreement, EVgo is obligated to spend a specified amount annually on joint-marketing activities that are mutually agreed-upon with Nissan.

EVgo executed an agreement with Nissan North America, Inc.

(“Nissan”) in June 2019 (the “Nissan Agreement”) that provides for joint marketing activities, charging credit programs for purchasers or lessees of Nissan EVs, and a capital-

build program.

The Nissan Agreement has been amended several times to, among other things, adjust the allocation of the value of unused charging credits and to provide new offerings for purchasers or lessees of certain Nissan EV models.

Under the joint-marketing activities provisions of the Nissan Agreement, EVgo was obligated to spend a specified amount annually on joint-marketing activities that were mutually agreed-upon with Nissan until March 1, 2024.

Under the charging credit program provisions in the Nissan Agreement, credits for charging are allocated to purchasers or lessees of Nissan EVs, and such purchasers or lessees are permitted to charge their EV for 12 months at no charge to the participant, up to the amount of the charging credit allocated to such participant or on an unlimited basis, depending on the model of Nissan EV purchased or leased.

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The capital-build program provided for in the Nissan Agreement requires the Company to install, operate and maintain public, high-power dual-standard chargers in specified markets pursuant to a schedule that outlines the build timelines for the chargers to be constructed (the “Build Schedule”).

If the Company fails to meet its Build Schedule obligations, Nissan may invoke a penalty of up to $70,000 per delayed site beyond a designated cure period, up to 39 sites as of February 28, 2023, which could result in an adjustment to the consideration received by the Company under the Nissan 2.0 Agreement.

If the Company fails to meet its Build Schedule obligations, Nissan may invoke a penalty of up to $70,000 per delayed site beyond a designated cure period, which could result in an adjustment to the consideration received by the Company under the Nissan Agreement.

EVgo and Nissan previously agreed to amend the Nissan Agreement to extend the installation deadlines under the Build Schedule by up to 12 months, and Nissan has waived penalties for installation delays relating to program year one.

EVgo’s ability to meet its Build Schedule obligations may be impacted by delays in permitting, commissioning and utility interconnection, supply chain disruptions impacting business operations across the utility, engineering and permitting chain, including due to impacts associated with the COVID-19 pandemic;

as well as delays related to industry and regulatory adaptation to the requirements of high-powered charger installation, including slower than expected third-party approvals by utilities and landowners of sites where charger stations will be located.

EVgo’s ability to meet its Build Schedule obligations may be impacted by delays in permitting, commissioning and utility interconnection, as well as delays related to industry and regulatory adaptation to the requirements of high-powered charger installation, including slower than expected third-party approvals of certain site acquisitions and site plans by utilities and landowners, and supply chain issues.

Pursuant to the Nissan Agreement, as modified by the aforementioned extensions and other amendments, EVgo is required to install an aggregate of 210 chargers by February 28, 2025.

As of February 28, 2023, EVgo had installed a total of 138 chargers at 49 sites.

For the program year ended February 28, 2022, EVgo installed chargers at 21 of the 22 sites it was required to install by the end of the cure period ended February 28, 2023.

As of February 28, 2023, EVgo had installed chargers at 10 of the 18 sites required under the Build Schedule for the program year ended February 28, 2023, and has a cure period through February 29, 2024 to install the remaining chargers.

Pursuant to the Build Schedule for the program year that will end February 29, 2024, EVgo is required to install an additional 48 chargers at up to 24 sites, subject to a one-year cure period.

EVgo will be required to install a substantial number of chargers under EVgo’s agreement with Pilot Company and GM.

If EVgo does not meet EVgo’s obligations under this agreement, EVgo may not be entitled to payments from Pilot Company and may be required to pay liquidated damages, which may be significant.

Pursuant to the Pilot Infrastructure Agreement, EVgo is required to meet certain milestones over two biennial periods measured by the number of chargers installed and charger sites serviced and Pilot Company is required to make certain payments each month based on the progress of construction at each charger site and for each charger procured.

As of February 29, 2024, EVgo had installed a total of 188 chargers at 73 sites and was required to install an additional 22 chargers at up to 5 sites by February 28, 2025.

EVgo will be required to install a substantial number of chargers under EVgo’s agreement with the Pilot Company and GM.

If EVgo does not meet EVgo’s obligations under this agreement, EVgo may not be entitled to payments from the Pilot Company and may be required to pay liquidated damages, which may be significant.

Pursuant to the Pilot Infrastructure Agreement, EVgo is required to meet certain milestones over two biennial periods measured by the number of chargers installed and charger sites serviced, and the Pilot Company is required to make certain payments each month based on the progress of construction at each charger site and for each charger procured.

Under the Pilot Infrastructure Agreement, EVgo is required to install approximately 500 chargers at 300 charger sites during the first two-year period and will be required to install approximately 500 chargers at approximately 200 to 250 additional charger sites during the second two-year period.

EVgo may not be able to meet the charger installation milestones and may be subject to liquidated damages, modifications to the Pilot Infrastructure Agreement or termination of the Pilot Infrastructure Agreement.

Subject to certain excusable events, if EVgo is unable to meet its charger installation obligations in either of the two biennial periods, Pilot Company may be entitled to liquidated damages.

Furthermore, depending on the length of the delay, Pilot Company may remove the charger site from the portfolio without designating a replacement charger site.

Subject to certain excusable events, if EVgo is unable to meet its charger installation obligations in either of the two biennial periods, the Pilot Company may be entitled to liquidated damages.

Furthermore, depending on the length of the delay, the Pilot Company may remove the charger site from the portfolio without designating a replacement charger site.

The Pilot Infrastructure Agreement is subject to early termination for several reasons including:

(a) at Pilot Company’s election after 1,000 charging stalls have been completed, subject to the delivery of certain payments to EVgo, (b) the inability of EVgo to secure certain charger types in specified circumstances and (c) a material increase in the price of chargers due to a change in law.

(a) at the Pilot Company’s election after 1,000 charging stalls have been completed, subject to the delivery of certain payments to EVgo, (b) the inability of EVgo to secure certain charger types in specified circumstances and (c) a material increase in the price of chargers due to a change in law.

EVgo is committed to purchasing a large number of chargers under the Delta Charger Supply Agreement and Purchase Order, which will require significant capital expenditures, some of which may not be immediately offset by payment by EVgo’s counterparty under the Pilot Infrastructure Agreement.

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Pursuant to the Delta Charger Supply Agreement and Purchase Order, EVgo will purchase a minimum of 1,000 chargers (which will enable the construction of 2,000 stalls) from Delta over a period of four years with the option, at EVgo’s election, to increase the number of chargers purchased to 1,100.

Under the terms of the Purchase Order, EVgo is to receive delivery of 600 chargers in the 11 months following July 12, 2022 and is required to make full payment on such chargers within 60 days of receipt.

The Purchase Order was amended in August 2023 to provide for certain Delta chargers to be manufactured in Delta’s new facility in Plano, Texas rather than in Taiwan.

If the counterparty under the Pilot Infrastructure Agreement does not meet its obligation to pay for chargers, or if the Pilot Infrastructure Agreement is otherwise terminated, EVgo’s cash flows may be negatively impacted by its obligation to continue to purchase chargers from Delta under the Purchase Order.

Moreover, chargers purchased by EVgo under the Delta Charger Supply Agreement and Purchase Order may not qualify for funding under federal programs such as the National Electric Vehicle Infrastructure (“NEVI”) program.

The failure of such chargers to qualify for federal programs such as NEVI could result in the Company being required to purchase chargers under the Delta Charger Supply Agreement and Purchase Order that it cannot deploy optimally, which could have an adverse effect on EVgo’s business, financial condition and operating results.

Additionally, EVgo depends on a limited number of vendors for charging equipment, including Delta.

The inability of Delta to fulfill its requirements under the Delta Charger Supply Agreement and Purchase Order will require EVgo to find an alternative supplier in order to meet its commitments under the Pilot Infrastructure Agreement which may not be available or may be available at significantly higher cost.

The widespread outbreak of an illness or any other communicable disease, or any other public health crisis, such as the COVID-19 pandemic, could have a material adverse effect on EVgo’s business and results of operations.

The global or national outbreak of an illness or any other communicable disease, or any other public health crisis, such as the COVID-19 pandemic, may adversely impact EVgo’s employees and operations and the operations of EVgo’s customers, suppliers, vendors and business partners and negatively impact demand for EV charging.

The impact of COVID-19 has resulted in significant volatility in the global and domestic economies, changes in consumer and business

behavior, market downturns and restrictions on business and individual activities has led to overall reduced economic activity.

The COVID-19 pandemic, vaccine mandates and other measures taken by federal, state and local governments to stop the spread of COVID-19 has impacted EVgo’s operations through reduced demand for EV charging, construction delays and supply chain and shipping constraints.

See “— Disruptions in EVgo’s supply chain could adversely affect EVgo’s business.

” and Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments — Geopolitical and Macroeconomic Environment .”

In addition, since the beginning of the COVID 19 pandemic, EVgo has modified its business practices and currently allows most personnel to work in a hybrid manner from either their home or from an office location.

EVgo has implemented various safety protocols for personnel who must leave their homes for work such as requiring certifications of health status as well as implementing a vaccine mandate policy where all employees must present proof of vaccination.

EVgo may take further actions as may be required by government authorities or that EVgo determines are in the best interests of EVgo’s employees, customers, suppliers, vendors and business partners.

The extent to which the COVID-19 pandemic impacts EVgo’s business, prospects and results of operations will depend on future developments, including the COVID-19 pandemic’s scope, duration, severity, trajectory, and lasting impact, which remain unpredictable in light of pockets of resurgence and the emergence of variant strains contributing to continued uncertainty.

The COVID-19 pandemic could limit the ability of customers, suppliers, vendors, permitting agencies, utilities and business partners to perform, including third-party suppliers’ ability to provide components and materials used in charging stations or in providing installation or maintenance services.

EVgo may continue to experience an adverse impact to its business as a result of the pandemic’s lasting global economic impact, including any recession that may occur in the future.

Specifically, difficult macroeconomic conditions, such as decreases in per capita income and levels of disposable income, increased and prolonged unemployment or a decline in consumer confidence as a result of the COVID-19 pandemic, as well as reduced spending by businesses, could each have a material adverse effect on the demand for EVgo’s products and services.

EVgo relies on a limited number of vendors for EVgo’s charging equipment and related support services.

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EVgo relies on a limited number of vendors for design, testing and manufacturing of charging equipment which at this stage of the industry is unique to each supplier and thus singularly sourced with respect to components as well as aftermarket maintenance and warranty services.

For the years ended December 31, 2022 and 2021, EVgo had four and two vendors, respectively, that provided more than 10% of EVgo’s total charging equipment.

For the years ended December 31, 2022 and 2021, the amount provided by these vendors were 88.8% and 37.3%, respectively.

For the year ended December 31, 2023, one vendor provided 76.9% of EVgo’s total charging equipment.

For the year ended December 31, 2022, four vendors collectively provided 88.8% of EVgo’s total charging equipment.

This reliance on a limited number of vendors increases EVgo’s risks, since EVgo does not currently have proven reliable alternative or replacement vendors beyond these key parties.

In the event of production interruptions or supply chain disruptions including but not limited to reduced availability of certain key components such as semiconductors, EVgo may not be able to take advantage of increased production from other sources or develop alternate or secondary vendors without incurring material additional costs and substantial delays.

See “— Disruptions in EVgo’s supply chain could adversely affect EVgo’s business.

” Thus, EVgo’s business could be adversely affected if one or more of EVgo’s vendors is impacted by any interruption at a particular location.

See Part I, Item IA, “Risk Factors — Disruptions in EVgo’s supply chain could adversely affect EVgo’s business.” Thus, EVgo’s business could be adversely affected if one or more of EVgo’s vendors is impacted by any interruption at a particular location or is acquired or impacted by liquidity issues.

As the demand for public fast charging increases, charging equipment vendors may not be able to dedicate sufficient supply chain, production, or sales channel capacity to keep up with the required pace of charging infrastructure expansion.

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If these delays continue or worsen, EVgo may not meet the charger-installation milestones under the GM Agreement or its other contractual commitments under agreements with other third parties.

See “— EVgo will be required to install a substantial number of chargers under EVgo’s agreement with GM .

If EVgo does not meet EVgo’s obligations under this agreement, EVgo may not be entitled to payments from GM and may be required to pay liquidated damages, which may be significant .” and “ — EVgo will be required to install a substantial number of charger stalls under EVgo’s agreement with Pilot Company and GM.

If EVgo does not meet EVgo’s obligations under this agreement, EVgo may not be entitled to payments from Pilot Company and may be required to pay liquidated damages, which may be significant.”

See Part I, Item IA, “Risk Factors — EVgo will be required to install a substantial number of chargers under EVgo’s agreement with GM .

If EVgo does not meet EVgo’s obligations under this agreement, EVgo may not be entitled to payments from GM and may be required to pay liquidated damages, which may be significant ” and Part I, Item IA, “Risk Factors — EVgo will be required to install a substantial number of charger stalls under EVgo’s agreement with the Pilot Company and GM.

If EVgo does not meet EVgo’s obligations under this agreement, EVgo may not be entitled to payments from the Pilot Company and may be required to pay liquidated damages, which may be significant.”

Working with contractors may require the Company to obtain licenses or require EVgo or EVgo’s customers to comply with additional rules, working conditions and other union requirements, which can add costs and complexity to an installation and construction project.

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If EVgo fails to timely pay EVgo’s contractors, they may file liens against EVgo’s Site Hosts’ properties, which EVgo is required to remove.

In order to receive certain incentives such as funding under the National Electric Vehicle Infrastructure Formula Program (“NEVI”) and tax credits in connection with the alternative fuel vehicle refueling property credit under Section 30C of the Code, EVgo and EVgo’s customers are required to comply with certain requirements of such programs, which may include payment of prevailing wages, apprenticeship programs and “Buy America” obligations.

If EVgo and its contractors are unable to comply with the applicable program requirements, EVgo and its customers may lose the benefit of the applicable incentive program and may be subject to funding clawbacks or other penalties.

EVgo’s business model is predicated on the presence of qualified and capable electrical and civil contractors and subcontractors in the new markets EVgo intends to enter.

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In addition, EVgo’s network expansion plan relies on EVgo’s site development efforts and EVgo’s business is exposed to risks associated with receiving site control and access necessary for the construction of the charging station and operation of the charging equipment, electrical interconnection and power supply at identified locations sufficient to host chargers on a timely basis.

EVgo generally does not own the land at the charging sites and relies on site licenses with Site Hosts that convey the right to build, own and operate the charging equipment on the site.

EVgo generally does not own the land at the charging sites and relies on site licenses with Site Hosts

that convey the right to build, own and operate the charging equipment on the site.

EVgo may not be able to renew the site licenses or retain site control.

The process of establishing or extending site control and access could take longer or become more competitive.

As the EV market grows, competition for premium sites may intensify, the power distribution grid may

require upgrading, and electrical interconnection with local utilities may become more competitive, all of which may lead to delays in construction and/or commissioning.

As the EV market grows, competition for premium sites may intensify, the power distribution grid may require upgrading, and electrical interconnection with local utilities may become more competitive, all of which may lead to delays in construction and/or commissioning.

As a result, EVgo may be exposed to increased interconnection costs and utility fees, as well as delays, which may slow the pace of EVgo’s network expansion.

Disruptions in EVgo’s supply chain could adversely affect EVgo’s business.

Global trade conditions and consumer trends that originated during the COVID-19 pandemic continue to persist and have created significant disruptions to the global supply chain, which may impact EVgo’s ability to obtain charging equipment and other supplies necessary for EVgo’s business on a timely basis and at anticipated costs.

Additionally, a global shortage of semiconductors since early 2021 has caused challenges in the manufacturing industry and impacted the EV supply chain as well.

Any continued or new supply chain disruptions, or shortages in the availability of charging equipment from EVgo’s suppliers, could adversely affect EVgo’s business and operating results.

In addition, the conflict between Russia and Ukraine could lead to disruption, instability and volatility in global markets and industries that could negatively impact EVgo’s supply chain.

The conflict between Russia and Ukraine and an escalation of tensions and conflict in Israel and the broader Middle East region could lead to disruption, instability and volatility in global markets and industries that could negatively impact EVgo’s supply chain.

government and other governments have already imposed severe sanctions and export controls against Russia and Russian interests and may impose additional sanctions and controls.

The impact of these measures, as well as potential responses to them by Russia, could adversely affect EVgo’s supply chain, which, in turn, could affect EVgo’s business and operating results.

Additionally, Delta is located in Taiwan, and EVgo’s ability to receive sufficient supplies of Delta chargers could be adversely affected by events such as natural disasters in Taiwan, including earthquakes, drought and typhoons, escalations of tensions between the People’s Republic of China and Taiwan, including resulting from the People’s Republic of China’s recent increase in military exercises around Taiwan, political unrest, trade restrictions or war.

Additionally, Delta is headquartered in Taiwan, and EVgo’s ability to receive sufficient supplies of Delta chargers, components and parts could be adversely affected by events such as natural disasters in Taiwan, including earthquakes, drought and typhoons, escalations of tensions between the People’s Republic of China and Taiwan, including resulting from the People’s Republic of China’s military exercises around Taiwan, political unrest, trade restrictions or war.

If EVgo is unable to attract and retain key employees and hire qualified management, technical, engineering, financial, legal, sales, marketing and business development personnel, EVgo’s ability to compete and successfully grow EVgo’s business and customer base could be harmed.

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In addition, to the extent EVgo raises funds through the sale of additional equity securities, the market price of EVgo’s Class A common stock could be adversely affected and EVgo’s stockholders would experience dilution.

See “ —Risks Related to EVgo’s securities – The market price of EVgo’s Class A common stock could be adversely affected by,

and EVgo’s stockholders may experience dilution as a result of, sales of substantial amounts of Class A common stock in the public or private markets, including sales by the Company, EVgo Holdings or other large holders.

Continuing or worsening inflationary issues and associated changes in monetary policy may result in increases to the cost of charging equipment, other goods, services and personnel, which in turn could cause capital expenditures and operating costs to rise.

inflation rate increased during 2021 and 2022 and has remained elevated in 2023.

These inflationary pressures have resulted in and may continue to result in, increases to the costs of charging equipment and personnel, which could in turn cause capital expenditures and operating costs to rise.

Sustained levels of high inflation have likewise caused the U.S.

Federal Reserve and other central banks to increase interest rates, which could have the effects of raising the cost of capital and depressing economic growth, either of which—or the combination thereof—could hurt the financial and operating results of EVgo’s business.

See Part I, Item IA, “Risk Factors — Risks Related to EVgo’s Securities — The market price of EVgo’s Class A common stock could be adversely affected by, and EVgo’s stockholders may experience dilution as a result of, sales of substantial amounts of Class A common stock in the public or private markets, including sales by the Company, EVgo Holdings or other large holders.

EVgo’s business is subject to risks associated with natural disasters, including earthquakes, hurricanes, wildfires and other severe weather events, which could be impacted by the effects of climate change.

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Additionally, EVgo has significant operations in a number of areas, including Los Angeles and San Francisco, that are projected to be vulnerable to future water scarcity and sea level rise due to climate change.

The occurrence of a natural disaster such as an earthquake, hurricane, drought, flood, fire (such as the recent extensive wildfires in California, Oregon and Colorado), localized extended outages of critical utilities (as seen recently in California and Texas) or transportation systems, or any critical resource shortages could cause a significant interruption in EVgo’s business, damage or destroy EVgo’s facilities or inventory and cause the Company to incur significant costs, any of which could harm EVgo’s business, financial condition and results of operations.

The occurrence of a natural disaster such as an earthquake, hurricane, drought, flood, fire, localized extended outages of critical utilities or transportation systems, or any critical resource shortages could cause a significant interruption in EVgo’s business, damage or destroy EVgo’s facilities or inventory and cause the Company to incur significant costs, any of which could harm EVgo’s business, financial condition and results of operations.

Climate change may also result in various physical risks, such as the increased frequency or intensity of extreme weather events or changes in meteorological and hydrological patterns that could adversely impact EVgo’s business.

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Such damage could shorten the usable lifespan of the chargers and require the Company to increase its spending on replacement, maintenance and insurance costs and could result in site hosts reconsidering the value of hosting EVgo’s charging stations at their sites.

In addition, the cost of any such damage may not be covered by EVgo’s insurance in full or at all and, in the event of repeated damage to EVgo’s charging equipment, EVgo’s insurance premiums could increase and it could be subject to additional insurance costs or may not be able to obtain insurance at all, any of which could have an adverse effect on its business.

In addition, the cost of any such damage may not be covered by EVgo’s insurance in full or at all and, in the event of repeated damage to EVgo’s charging equipment, EVgo’s insurance premiums and deductibles could increase and it could be subject to additional insurance costs or may not be able to obtain insurance at all, any of which could have an adverse effect on its business.

EVgo is dependent upon the availability of electricity at EVgo’s current and future charging stations.

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Changes in utility electricity pricing or new and restrictive constructs from regulations applicable to pricing may adversely impact future operating results.

For example, some jurisdictions have required the Company to switch from pricing on a per-minute basis to a per-kWh basis and other jurisdictions may follow suit.

Utility rates may change in a way that adversely affects fast charging or in a way that may limit EVgo’s ability to access certain beneficial rate schedules.

Utility rates may change in a way that adversely affects fast charging or in a way

that may limit EVgo’s ability to access certain beneficial rate schedules.

In addition, utilities or other regulated entities with monopoly power may receive authority to provide charging services that result in an anti-competitive advantage relative to the Company and other private sector operators.

Some of EVgo’s business objectives are dependent upon the purchase of renewable energy certificates, and an increase in the cost of such certificates may adversely impact EVgo’s business and results of operations.

As part of EVgo’s business strategy, EVgo markets the electricity provided from EVgo’s charging stations as 100% renewable.

As part of EVgo’s business strategy, EVgo markets the electricity provided from EVgo’s charging stations as 100% matched with purchases of RECs.

EVgo purchases various RECs in order to qualify the electricity that EVgo distributes through its charging stations as renewable.

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While higher renewable energy portfolio standards may also increase the amount of renewable energy available, EVgo cannot predict the impact such regulations may have on the price or availability of RECs.

If EVgo is unable to purchase a sufficient amount of RECs, EVgo may be unable to achieve this objective, which may negatively impact EVgo’s reputation in the marketplace.

If EVgo is unable to purchase a sufficient number of RECs, EVgo may be unable to achieve this objective, which may negatively impact EVgo’s reputation in the marketplace.

If the cost of RECs increases, EVgo may be unable to fully pass the higher cost of RECs through to EVgo’s customers and increases in the price of RECs may decrease EVgo’s results of operations.

EVgo’s success depends on EVgo’s ability to develop and maintain relationships with automotive OEM and fleet partners.

The success of EVgo’s business depends on EVgo’s ability to develop and maintain relationships with OEMs, such as GM, Nissan, Tesla and others.

These relationships help the Company access new customers and build brand awareness through co-marketing.

EVgo may also benefit from promotional programs sponsored by OEMs, such as prepaid charging credits.

In some cases, EVgo’s OEM partners have agreed to fund capital expenditures related to the build-out of EVgo’s charger network.

For example, GM is providing payments for performance obligations that will help fund the accelerated build-out of 3,250 charger stalls for EVgo’s fast charger network through March 2026.

If EVgo fails to maintain or develop relationships with OEMs, or if OEMs opt to partner with competitors rather than the Company, EVgo’s revenues may decline and EVgo’s business may suffer.