EVgo Investors Get ‘Holiday Gift’ As Company Closes $1.25 Billion DOE Loan | Global News Avenue

electric car (evgoShares of the electric vehicle charging station maker experienced a roller coaster ride on Friday after it secured $1.25 billion in loan guarantees from the federal government to build more chargers.

The company reported that it had terminated a loan facility from the U.S. Department of Energy’s Office of Loan Programs under its Section 17 Clean Energy Financing Program.

EVgo said the funding will be used to build 7,500 fast charging stations across the country, bringing it to at least 10,000 in its owned and operated network. The chargers will be installed over five years, starting next year.

JPMorgan said in a note to clients that the loan termination was an “early holiday gift” to EVgo investors. Analysts maintained their “overweight” rating after upgrading their rating in October, expecting the loan deal to close by the end of 2024. They added that “the company is expected to remain focused on execution and driven aggressively” likely to capitalize on operational milestones and near-term results. “

EVgo CEO Badar Khan said the agreement with the Department of Energy “will help us continue to scale our operations to serve the vast array of vehicle options that will be available to U.S. consumers in the coming years.”

The news initially sent EVgo shares soaring, but they fell in the morning as the company said in a regulatory filing that failure to meet the terms of the loan guarantee would have a “material adverse effect on our business.” They rebounded in the afternoon before falling into negative territory again.

The stock fell 2% about half an hour before the close. Since the beginning of 2024, EVgo shares have risen approximately 70%.