Okay, great. Well, thank you everyone for joining us, including those of you on the webcast. My name is Mark Delaney, and I cover autos and industrial tech for Goldman Sachs. I'm very pleased to have with us today, Cathy Zoi, the CEO of EVgo.
Nice to be here. Thank you.
Yeah, Cathy, I thought to start, perhaps you could give a quick overview of the products and services that EVgo provides, and maybe talk about what's unique about EVgo compared to some of the other charging options.
Yeah. Okay. So we, EVgo has been around for about 10 years. We are among the largest owner-operator of fast charging assets in the United States. And those are for people that are needing to charge on the go and spend sort of 15-40 minutes or whatever, depending on how much juice you want and how powerful your car is, charging away from home. So that's what we're experts in. Vast majority of Americans live within 10 miles of an EVgo station, but again, it's early innings in the sector, as we know, and everything's growing very, very fast and, electrification is happening, and we just wanna continue to be a provider of convenient, reliable, fast charging.
Well, that's a great intro for a lot of the topics that we'll dig into here. You mentioned a lot of people live within 10 miles of an EVgo charger, but maybe talk in a little bit more detail around how you decide where you place those chargers.
Yeah. So we, one of our core principles is financial discipline, so we invest money where we can make money. So we have developed, over the course of the past few years, some proprietary tools that allow us to determine where we're going to invest CapEx in these assets that we own, charging assets. And, you know, again, a station is, like, you know, it's a seven-figure investment. So we figure out where we can get those returns based on a combination of factors. How many EVs are in that market? What's the density of multi-unit housing? Because people who don't have access to a garage are more likely to use fast charging. How big is rideshare? Rideshare is one of our key segments.
So we choose markets where that will deliver a double-digit return to us. So we're now in over 30 states and over 60 metropolitan areas and continue to expand that footprint. And what the truth is, is that with increasing penetration of EVs, what used to be kind of a coastal phenomenon in a few, in a few sort of blue states, is completely happening everywhere. I mean, our fastest growing states, markets at EVgo right now are Florida and Texas.
Hmm.
You know, we are seeing... We're seeing electrification happening everywhere, and we wanna be where that is.
You talked about targeting a double-digit return. Is there a threshold in terms of number of charge sessions per day or utilization that you need to reach in order to have that kind of a return?
We look at the unit economics of every location. And again, it's painstaking detail, but that's how we make money. What is the CapEx required at that location? How much are we gonna have to pay for electricity? What are the demand charges for that electricity? Because it's not just the kilowatt hours that we have to pay as a commercial and industrial customer, but what is the demand charge structure? What is the operations and maintenance there? Are there any offsets for being there? So is there a utility program that will help pay for the connection up to the charging station? That means that comes right off of our cost basis. Is it someplace that one of our partners wants us to build?
So we have a ninety-seven million dollar partnership right now with General Motors, where they effectively offset about a third of the cost of the CapEx for a typical station. And so that comes off the top of our cost basis. Are there grants available in that location? And there are a variety of different grants. There's state grants, local grants, and now federal grants happening. All of that sounds all very complicated. It's not that complicated. There's line items in our model that we've named Bertie after the famous mathematician, Bertrand Russell, because it's just plain old logic. But Bertie tells us, is this gonna pencil to double-digit returns based on those particular circumstances at that site? So that's how we figure out where we're gonna build.
Well, and I think on your last earnings call, you mentioned some utilization rates on a number of your sites, and many of them have pretty good utilization.
Yeah. In fact, yes, so your question is, are we? We're looking for returns. We're indexing on where we can get that return on investment over a 10-year period. Sometimes, you know, the utilization is going to be so high, and the subsidies or the offsets to our CapEx are so high that we only need a couple sessions a day to make money. Other places that are not quite as favorable, it might be a longer term payback, where we need a higher utilization to make money. Overall, we never sort of model that we'll get more than, you know, low 20% in the utilization category. That even though on our network today, we've got stations that are used with over 50% utilization, many over 30% utilization.
But we model conservatively, just to be sure that we're, you know, gonna get our money back.
You know, I think you also have your extended business line, where the customer ends up owning the charger rather than EVgo. So you'd be, you know, like, relatively agnostic to the utilization rates of the site itself. Maybe talk in a bit more detail around what kind of growth EVgo is seeing in that business.
Yeah. So our seminal... We had a few contracts that were the eXtend business model before we named it eXtend. And then we had this, we scored this very, very big deal with Pilot Flying J, which is 2,000 stalls at truck stops across the country on highway corridors. Now, why is that interesting to EVgo? We would look at corridor locations, highway locations, that we could never really make them pencil because the utilization on corridors wasn't, at that time, good enough to meet our return hurdles. However, Pilot Flying J was really excited about the electrification of transportation and said, "No, no, no, we'll take the risk on the utilization.
In fact, we wanna own the assets, but can you design them, construct them for us, and operate them for us?" And so we have a lovely sort of revenue stream that complements our own business model that, that is not exposed to utilization risk... So that's, that's going very, very well. And now with NEVI money available across the board, there are other site hosts that are in places where we might not necessarily wanna own the assets, but they, those site hosts do wanna own the assets, and so we're in conversations with them about the eXtend business model. I mean, Meijer is one of them. Meijer, we do have some locations at the Meijer grocery store, a very big grocery store chain in the Midwest, where we own the assets.
And then we have another set in Ohio that's receiving NEVI money, that Meijer will own the assets on their books, but EVgo will do. It's a classic eXtend offering, where we'll design, construct, and then operate those locations for Meijer.
You touched on software and services a little bit. Can you elaborate on what you provide and maybe how that's different if it's the extended business versus your own assets?
Look, every successful business in the world today is a software business, and EVgo is no exception. We've invested very heavily in really clever software that is 24/7 network operation center, so we can always see what's going on on our network. We have customer-oriented software so that if you plug in at an EVgo station, you can get a coupon for stores that are nearby. We have reservation software so that you can make a reservation to know that the charger's gonna be available when you show up there.
And then we have software that is a B2B software, where we have developed a product called EVgo Inside, for example, that we are able to provide a white label service to an OEM, so that when you're, like, driving a Toyota bZ4X, you'll see the charging stations in the app. That's powered by EVgo Inside, but it looks like it's Toyota. We have developed another fleet optimization software called EVgo Optima. Again, that is provides connective tissue between the logistics management, that fleets need to do to make a lot of money with the charging services and energy management.
EVgo has a handful of initiatives, that I think can be pretty positive for retention, membership programs, OEM partnerships, and, and hopefully drive a lot of repeat users and help with the, utilization rates as well. Is there anything you can share, with respect to the traction that EVgo has with these efforts, like membership programs?
Yeah. I mean, we have almost everybody who buys an EV comes to EVgo. And so they come to the website, they sign up, and they become a member of EVgo. We're maybe even over 600,000 now. I think at our last earnings call, we were at about 600,000 EVgo members, so that's really great. What we have in addition to that is we have a rewards program to keep those people coming back more and more. And, you know, that we're continuing to enhance that program. As I mentioned, we've got the coupon programs and the reservation programs that also create customer stickiness. But at the end of the day, I think what people really want is they want good locations and a reliable network.
So that's one of the things that EVgo has invested in partnering with all of the top grocery store chains, many of the big box retailers, because our philosophy is charging. You know, when you're charging, other than when you're on a road trip, but when you're charging around a metropolitan area where you live, charging shouldn't have to be a separate destination where you just sit in your car. You can charge while you're doing something else, like going to get a coffee, going to the grocery store, going to the gym, watching your kids play sports, et cetera. So we tend to locate our stations in places that are convenient for lifestyle choices.
You could do the playgrounds, and that'd be good for younger kids and parents with younger kids.
Like yours.
Yes. Yeah, I wanted to get into some of the government funding. You mentioned NEVI, you know, but, you know, more broadly, there's the IRA, the Bipartisan Infrastructure, but maybe talk a little bit around the opportunity that EVgo has to, you know, be able to capitalize on some of those, programs.
Well, we've all heard it. This is, between the Bipartisan Infrastructure Law and the IRA, the single biggest investment in climate technologies ever in the history of the world. And I've been working on climate stuff for decades. So this is really, really exciting. And that's across all clean energy, you know, non-carbon emitting sources. I mean, it's the whole plethora of stuff. Agriculture, it's across the economy, and it needs to be. When we for EV charging and EV, the EV sector, there are consumer incentives for purchasing EVs and even used EVs now. And then there are incentives like the IRA, the 30C tax credit, that's gonna be really terrific for EVgo because we get a tax credit when we're building in particular geographies.
And it turns out, when we overlay those geographies with where we wanna build, it's not limiting at all. So that'll be super helpful to our financials. It extends you know, as I mentioned at the beginning, Mark, we only will invest our investors' dollars where it pencils to double-digit returns. But if we get an IRA offset or a NEVI grant, that expands the geographic footprint where we can get that double-digit return. So we're super excited about, about the tailwind that it is going to provide to be able to, like, just sort of maintain a big market presence while electrification continues apace.
Do you have any sense of how much of the CapEx EVgo will save as a result of some of these initiatives from the government?
Well, if... Yeah, we're, I think a kind of good estimate is at least 25%, kind of what we're thinking, you know, net-net.
And then, any idea on the timeframe? Because some of these government programs, I think NEVI was a little bit slow, you know, getting out of the gates, but maybe starting to see some of the states able to move forward now.
Yeah, it is... Yes. Yes, it's being slow, and I think, as I said in a couple earnings calls ago, it's like a tail breeze rather than a tailwind. However, the speed, the wind velocity seems to be picking up. So, we're, you know, we're... You know, we were always sort of hopeful, but not optimistic, if you can make that differentiation, that we would start to see some grants in 2023, but mostly it would happen in 2024. And I think we've been on the record saying that, and I think that is, it is indeed what's happening. I mean, Pennsylvania's given some awards. Ohio, we were the big winner in Ohio. A couple of other new awards have been announced. You know, we've got a whole team of people that is applying for the grants...
Then waiting, waiting for them to come out. But just be aware, even when the award announcements are made, what follows then is still a somewhat arduous process of contracting, of having EVgo or the other award winners sign contracts with the state departments of transportation. So that's a multi-month process. So we're still probably even for the awards that have already been made, you're not looking at electrons flowing until next summer, realistically speaking.
Maybe I can ask you to put your public policymaker hat on for a little bit, and you were gracious enough to agree to let me ask you a few questions around public policy more broadly. I've been very much looking forward to these next few questions and hearing what you have to say. I promise you some tough ones. So, you know, first around the IRA, it was a very transformative bill in many ways. If you were a policymaker and you were designing it from scratch, any changes that you'd make?
No, I mean, I'm more specificity and timetables from the government. I mean, we're still waiting on the IRS to give us the specific guidelines about how the IRA is gonna work. Now, we think we have a good sense of it, but it's taking too long. And this is true, this is also true with the NEVI grants. Nobody the unintended consequence of having this big pot of money coming is that it stymies activity until the money comes. So I think all of us in this, you know, if you know that you might get 25% CapEx offset in a few months' time, you're not gonna spend the money in that location now. I mean, you'd be silly to do that. So there's some momentum that is kind of like you were on this up trajectory of growth. It might be... The slope of that line might be down temporarily because we're waiting for the money to flow, both from the 30C tax credit and from the NEVI grants, but it'll pick back up again. So again, I would just—I would love to have the government officials be accountable for the timetable because it is affecting us. Other than that, I actually think it's pretty well designed. I think there's flexibility in it. I think that they are not picking individual winners, which I think is good because the technology is changing.
I mean, but let me say, like, all of the OEMs, almost all the OEMs have announced that they're gonna go with the NACS connector.
Mm-hmm.
Right? EVgo is sitting there, we're ready to put the NACS connectors in. We're actually sourcing them right now. We'll be ready to provide electricity to EVs through NACS connectors before the cars are gonna be ready to receive it that way, I... is my projection. However, some of these NEVI states, some of the NEVI grants are requiring, like, either requiring NACS before they're ready, or they're saying, "No, we're not gonna do NACS." Public policy has to stay flexible when it comes to dynamic young sectors and be agile enough to change technology and the government program shouldn't specify the technology. It should just say, "The outcome we're trying to achieve here is reduction in greenhouse gas emissions," and let's design policies that will embrace better and better and better technologies along that way.
Yeah, that's an interesting perspective. I ask that, too, I mean, with the, you know, if you're trying to target carbon reduction in particular, you could, you know, try and do something also along the lines of Cash for Clunkers, where you'd get some of these older vehicles off the road, although the conundrum has been there haven't been enough vehicles, so that has probably tied hands as well for people in the government.
Yeah. Yeah.
Well, you brought up NACS, and maybe just, you know, talk about what the cost would be to EVgo to retrofit a station.
It's a few thousand dollars. I mean, so, like, EVgo has charged all EVs since our inception, I mean, predating my arrival at EVgo. So first it was CHAdeMO, which was the plug that the Japanese manufacturers were using, and then it was CCS because the U.S. and the German automakers said, "We want CCS." I mean, it truly was. They said, "CCS." Then we, because Tesla was such a big market and Tesla Superchargers were constrained, we added Tesla Sidekicks, Tesla connectors to our many of our chargers in locations where it made sense. And now the new thing is going to be NACS, and so we are working with our cable... It's a cable, it's a connector. We're working with our cable manufacturers to do that, and the cost, again, is a few thousand bucks.
Our overall CapEx per stall is over $100,000, so it's relatively modest. But you know, we'll get there. We'll get there. I mean, the bigger exercise is going to be for the OEMs to move from a CCS configuration, where the brain of the charging is in the connector that's connected to the charger. With Tesla, half of the brain is in the charger and half of the brain is in the car. So GM, Ford, all of the OEMs that have announced they're going to NACS, they need to build a charging brain inside their vehicle that they never had to do before. So they have some real engineering to do.
There, before we move on to some other NACS-related questions, which I do wanna cover, there was another public policy one that I skipped over by accident. You know, and it's around electrification, and I think, you know, all of us as, you know, in the world have read media reports of air conditioning causing blackouts and that the grid can't support higher levels of electric demand. You know, and in your view, how much infrastructure CapEx may be needed in order to support the roughly 285 million U.S. car park becoming all electric over time?
Look, that is actually a question for the electric utilities. I think it is all doable and handleable. With the EVs. So part of it is the capacity to charge the cars, but also, we need to reconfigure the grid, and we have an opportunity to do so really, really cost-effectively because each one of those cars becomes a battery where the power can flow two ways. So, I mean, it's interesting because you know, my husband and I were looking at this. We've got this rural property where he was thinking and we're putting solar on the roof. That's a good thing to do.
He was like: "Well, so maybe we should get some storage because we're in a rural property, and maybe the power is gonna go down." He's, you know, again, he's an energy engineer, too, so we have really interesting conversations. We used to take our children to power plants, like, during summer vacations. They're like, "Oh, my God!" They're now grown up, and they're not too damaged. But my husband has pointed out that, well, actually, the battery that's in an EV can be our standby power. So once all of these EVs start to be enabled with the two-way power flows, that's actually that needs to get factored into the macroeconomic analysis that you're talking about.
We are also going to have more distributed solar. We're gonna have... You know, every rooftop should be generating solar. So the, it's, it's not simply building more power plants to charge EVs, it's, it's reimagining two-way power flows, distributed generation, distributed renewables, and then cars that also serve as batteries. So I, you know, again, in my, in my post-EVgo CEO life, it's one of the things that I'm really excited to be able to contribute to that conversation on.
Well, we look forward to hearing more in the future. You know, in terms of the NACS discussion, maybe we could broaden that out a little bit. With Tesla opening up parts of its network, what does that mean for EVgo in terms of demand and utilization rates?
Well, we know we're right now in America, we're at about 30,000 fast chargers. We need to move to somewhere between 200,000-300,000 by 2030. There's there is so much growing that needs to be done to satisfy the forthcoming demand in EVs. There's going to be... There, there's room for Tesla, there's room for EVgo, there's room for others. I think it's gonna be a thriving, interesting market. And I think, you know, what, what we have done is tried to put the customer first and be in places where people wanna be, and we're gonna continue to do that. We're gonna continue to cost down all, all of our, all of our hardware, so that we provide reliable, convenient, and cost-effective experience for drivers, and I think people are just gonna keep coming back for more.
you know, as you think about the power levels that EVgo's chargers can provide, I think you have 350 kW-
Yeah
... capable chargers. Is that compatible with a NACS connector?
Well, the Tesla system today doesn't do 350. So actually, for many of the, like the Hummer and some of the big GM vehicles, they will have a better, faster charging experience on EVgo today than they will on the Tesla charging system. The Tesla NACS now, because it's lower power, doesn't have liquid-cooled cables because it's not so hot. 'Cause for 350 kilowatts, you need liquid-cooled cables. So as we're thinking about NACS connectors, we're also thinking about powerful NACS and liquid-cooled cables, and so that's what we're talking to our suppliers about. Because, again, the end game is that we wanna provide the best charging experience for all EVs.
And what you see is, you know, one of the things that we've witnessed at EVgo is our throughput. I mean, I don't know if you guys have listened to our earnings call, but our throughput is going through the roof. Like, we are, we are charging so many vehicles, so much of the time. 30% of our chargers today are over 15% utilization. That surpasses even what you know we believe in the business, but it surpasses our expectations. There are a number of things that contribute to that. One is the increasing number of EVs. No surprise there, so you would have expected that. Another one is that we're our growth of our network, so that, which is fine. Another one is that we're actually... The cars themselves are becoming more powerful.
So that's—we call that the charge rate, the average charge rate over a session. So the cars can... Their max power went from, in the old days, of 50 kW, up to a Porsche Taycan is maybe now 270, a Lucid is about 300 kW. So they're more powerful at the beginning of the charge, and then even when it, the charge rate goes down to conserve the battery, and that's all sort of programmed by the automotive engineers, they're absorbing more power more quickly. That means in 5 minutes, even if our utilization is 15%, we're selling more of our power in that same time period because the cars can absorb more. They're thirstier. So that is a sectoral trend that is accruing to EVgo's benefit.
And then the fourth thing that's happening, these are all compounding effects, that if you own your assets, you're in a good business in electrification. But is it because we have actually run to ground some of the challenges of the early days in charging experience? We're taking market share from others. So all of those things are happening together, and it just puts us in a really good spot as electrification continues.
One of the concerns I've heard from investors when I speak to them on the charging industry broadly, is the risk that with Tesla opening up its network, that some of the other OEMs, be it GM or Ford or any anybody, you know, take your pick, that they may be less interested in partnering with other charging companies like EVgo. It's like, oh, some of my charging needs may be addressed without me having to fund it myself if, if, if I can access the Tesla network. Have you seen any change in OEM willingness to partner?
Well, so with our partnership with GM is going great, and we're in conversations with the new—with the consortium, like they, we call it the G-O Seven, the Gang of Seven. And they announced, was it in August? July? July, maybe, that they were gonna get together and pool some money to, again, build even faster. And that's good news, because America needs more fast chargers more quickly. So we're hoping that we're gonna be, you know, able to be helpful to them, maybe via Extend, maybe by investing alongside them, it doesn't really matter. But the what is pretty clear is that those OEMs need more chargers to sell their cars, A, and B, Tesla's a competitor. So the idea that there won't be a multitude of charging networks-...
I think that's overblown.
That's a very good context. You know, speaking of that specific consortium is one of the things I was gonna ask you about. But, you know, the timeframe for when you think EVgo could potentially address, you know, that sort of an opportunity, is that a couple of years away, or could it be sooner?
Oh, I would say, I would think immediately. Immediately. I mean, look, you know, we, we've got relationships with each of the individual OEMs that are part of the consortium. I mean, we've got good long-standing relationships, and, you know, with GM is obviously the most—the biggest one that everybody's heard about because they're investing in infrastructure. But we have software relationships with EVgo Inside, with a number of them. We have charging credit programs with others of them. So we're continuing to have those conversations, and then they know that we're a good player, that we do what we say we're gonna do. So as they...
I mean, their first task is to organize themselves and they have trade rules so that there has to be walls between the core business of the OEM and whatever the consortium does, so there's a bunch of legal things. But as soon as they're formed and ready, then, you know, EVgo is excited about helping them get that work done.
Can you talk a little bit about your portfolio between L2 and DC Fast, and how you see that evolving over time?
Yeah. We have a legacy network that's L2. We've got maybe 1,200 L2s that are at workplaces, largely at, like, Kaiser Health Hospitals. It's not... On our own asset throughput model, it's difficult to make money providing standalone L2, so it's not really our core business. You have to do a sales and service model, not unlike ChargePoint, right?
Mm-hmm.
They sell, they sell the L2s, and then they service them, and that's fine. That's not really a big part of... It's not a core part of our business. Where we're seeing L2s is on two places. On the fleet side, we've got fleet customers that have lots of their vehicles come back to base overnight, and so having banks of L2s complemented by some fast chargers is a good model, and we're right there with that, and our EVgo Optima software can integrate those. And then the second thing is where we have site hosts, like shopping centers, where we're gonna provide fast charging for the shoppers. But those employees, they say, "Well, could you just put some L2s here?
Because our employees are driving EVs now too, and they're here all day long." So and we don't see it as a standalone business. We see it as more of a complement to the other offerings.
Yeah. That's a tough one, and it makes sense. You spoke about some of the variety of OEMs that you work with and, you know, EV owners of all sorts of different brands can use the EVgo network. What does that entail in terms of supporting all of those different types of cars, and what would have to happen to support plug and charge more holistically?
Yeah, so, and I often have to talk about this. So we charge over 50 different models of EVs on the network. They all have their own battery signature, software stack, firmware configurations, and all the different bugs that come with that. 'Cause again, really, you know, you've heard some people say it, like, cars are actually computers on wheels now. And so what we do is we have an innovation lab out in El Segundo, near LAX. We try to get all the OEMs to bring their cars before they get, like, you know, when they're still in disguise, bring them to the lab so we can test them with all the different manufacturers' chargers and identify bugs in the software. So look, what's involved is tech development and then continued maintenance.
I mean, so, so, you know, we're, we're right there working hand in glove with the OEMs to try to create a really nice charging experience.
You know, is there anything that needs to happen with the hardware in order to support that, or is it more just software development and debugging and working closely?
No, it's hardware and software.
Okay.
It's hardware and software. I mean, you know what? So one of the funny things that people don't really understand, the CCS protocol, you know, you're putting a lot of power through a cord. Safety really, really matters. This is the most direct power that average mortals that are driving around are ever gonna come into close contact with, right? I mean, it's way more than your dryer outlet, right? And that's, you know, the... So you need protocol. So when you plug in a CCS charger to your car, there's a whole series of steps that have to be taken that are part of, like, what the engineer said to make sure that it's all good. It takes time.
So people plug in, and it's going, clickety-clack, clickety-clack, da, da, da, da, da, da, da, da, da. It could take 15 seconds for that checklist to be gone through. It sometimes takes 60 seconds, and people don't know. So sometimes what happens is they plug in, you don't hear the- you don't. The signal doesn't come up on the screen that you're charging yet, so people unplug. One of the things, in an unintended way, with some of our manufacturers, when it was unplugged, they had a protocol inside the charger that said, "Oh, gosh! Shut it down." And so that would cause, you know, that would, that would interrupt charges. So what we've now done is work with the manufacturers and written new code with them to say, "When people, like, when people unplug, don't, don't disable the charger.
You know, let it go again. There's... I mean, and again, there's lots of little gremlins like that that we're running to the ground. So it's, it's a connection between, to answer your question, it's a connection between what happens in the hardware to make sure everything's going smoothly and the software.
I think, you know, you made the point the last time we spoke of consumer education-
Yeah
... and making sure they plug in first.
Yes, yes.
Not at the gas pump.
Yes, that's right. That's right. But, you know, we're all accustomed to, like, however, everybody turns 16, they go to the gas station when they get their driver's license, you know, and you don't plug in first. So anyhow, but it's the opposite. Or we could change that, or we could say, you know, we could change the protocol on EVs. But it... And here's the thing: with Tesla, because it's all behind the curtain, you don't have to do that, right? Like, you know, I'm a Tesla driver, so Tesla got my credit card when I bought my car. Tesla doesn't have payment at the screens. They don't even have screens, right? So I just drive up to a Supercharger, and I plug in, and there's nothing.
But if you're a dedicated charging company charging 50 different models of car, we need to get payment. Funny that. So there is a process that has to be gone through.
One of the things I've heard that could gate growth for the charging industry and, perhaps, you know, something applicable for EVgo, has been permitting times. And maybe talk about, you know, the ability to get permitting to put new charging sites in. How efficient is that, and is that something that's holding you back at the moment in terms of how fast you're deploying sites?
Yeah. So the average time from idea to energization is 12-18 months. One of the things that takes a lot of time is local permits. In most places, it's starting to get faster because most of the local government authorities now have some experience with charging infrastructure, with charging stations. So that seems to be getting faster. The longest pole in the tent at the moment is utilities, and that's a couple reasons. One is that, you kind of alluded to this, they've got everybody's electrifying everything, so they've got full plates. Second thing is they've got crazy weather events that have been affecting the grid, right? And that's, you know, whether you're in the Gulf Coast, whether you're in the Northern Midwest, whether you're in California, it doesn't matter.
There's been these crazy weather events. And then the third thing is we're all building. Everybody in the EV industry is building larger stations with bigger footprints, with more capacity needs. So every single station that EVgo builds now requires a transformer upgrade. The utilities can rate base those transformers, so we love that because they pay for them, but they each have their own little special design of transformers, and that still seems to be experiencing some supply chain shortages. So the lead time on those transformers can be 12-18 months sometimes. So what we're doing to ameliorate that is we're actually in advance, ahead of time, providing utilities where we're gonna build 12-, 18-, 24-month timetables. Okay, here's where we wanna build. Here are these layer. Here are these areas.
We've overlaid it with your local grid, so we think this is okay, but if you know about something that we don't know, we can maybe move this a little bit here and there. So working in closer lockstep with the utilities is helping.
Is there anything that is holding back the rate of growth via capital, supply chain, permitting, or I mean, kind of what would, you know, it take for maybe EVgo to go faster than it has?
Well, in contrast to a couple of years ago, where we were actually limited on the number of projects that would pencil, right? I told you, we've got this financial discipline. It's an absolute mainstay at EVgo. Now we have probably 10,000 locations that pencil to double-digit returns, so that's a lot. Now, the limiting factor is capital. We could go faster if we had more capital. But, you know, the good news is we, there's capital sources that are coming. You know, the DOE Loan Program is another one that's gonna provide a, you know, fingers crossed, a lovely source of cost-competitive capital, cost-competitive debt for EVgo to expand its network more quickly.
Yeah. Um-
I realized I didn't answer your Autocharge+ question.
Yeah.
Okay, so do you want... Yeah.
Yeah, yeah.
Just quickly, Autocharge+, Autocharge+ is the Tesla-like experience.
Mm-hmm.
So EVgo developed, again, wanting to create a great customer experience, developed software that would allow people to just plug in. Like, so if they give us their ID of the car and a credit card, all they need to do is drive up and plug and charge. It's very, very similar to what Tesla had done for its own little network, closed network. It's a function, though, of the OEMs allowing it. So GM does it. We just announced Rivian has done it. So we've got, it's—we're ready to do it with any OEM that wants to do it because we've developed our part of it, and we're just waiting for the. You know, there's a few other holdouts that haven't done it on their side, but they will.
We have time for one more question. I wanna see if anyone in the audience would like to ask it. Otherwise, I can do it. Yeah, we have a question in the back.
Hi, just a quick question. Do you think the, I guess, the energy companies will have a play, or do you guys feel like you will work with them at some point in the future, given they have the infrastructure with the gas stations, or do you think that's just not something-
The oil and gas energy companies?
Yeah, yeah.
Yeah. Yeah, I think so. I mean, like, look, both Shell and BP have made some investments in charging stuff, and we, EVgo, has partnered with Chevron in a number of places to build. Like, we've got stations at 14 different Chevron stations in California right now, and we've got a master site agreement with Chevron nationally. But those individual station owners are franchisees, so they get to decide. So I... Look, I think so. You know, it's possible that they decide to go big and just buy an existing company, or maybe they'll try to do it organically, but there's room for lots of activity.
Great. Yeah, we'll squeeze one last one in. How expensive and complicated is it for you to move to NACS? I mean, you talked a bit about the, maybe you can-
Yeah, I mean, we're pretty used to change, you know, to adapting as technology changes, and so it's... You know, and Mark sort of asked this. It's $2,000 per stall that we would do in terms of the upgrade. It's not that expensive in terms of development. I mean, like, a number of our connector suppliers, because we don't manufacture, you know, we write the spec. We're thinking about this anyway. So it's just not a big deal. It's really not a big deal. I think, as I say, I think it's a heavier lift for the OEMs because they're gonna have to do some brain building inside the car, and I think that there will be, once... I mean, I think this is gonna be true for Tesla, too.
Once there's a next brain inside non-Tesla cars, and it's connecting outside, there's gonna be gremlins that we have to run to ground as well. But there always is. It's a... Look, it's a young sector, and I just want the drivers to hang with us as we work with this all the way around.
Great. Well, Cathy, really appreciate you taking all of our questions.
Thanks for the invitation. Lovely to be here.