EVgo, Inc. (EVGO) Earnings Call Transcript & Summary

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.

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.

Yes. Okay. So we -- EVgo has been around for about 10 years. We are amongst 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 to 40 minutes or whatever, depending on how much [ juice ] you want and power for your car is charging away from home. So that's what we're experts in. We are -- 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 is growing very, very fast. And electrification is happening, and we just want to continue to be a provider of convenient, reliable fast charging.

Well, it'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?

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 again, a station is like a 6-figure -- it's a 7-figure investment. So we're -- 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 multiunit housing? Because people who don't have access to a garage are more likely to use fast starting. 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. I mean what the truth is, is that with increasing penetration of EVs, what used to be kind of a coastal phenomenon in a few sort of blue states is completely happening everywhere. I mean, our fastest-growing states, markets of EVgo right now are Florida and Texas. And so we're seeing electrification happening everywhere, and we want to 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 there -- 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 going to 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. 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 some place that one of our partners want us to build? So we have a $97 million partnership right now with General Motors, where they effectively offset about 1/3 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 or state grants, local grants and now federal grants happening. All of that -- 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 going to pencil to double-digit returns based on those particular circumstances at that site? So that's how we figure out where we're going to build.

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.

Yes. 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, 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 of sessions a day to make money. Other places where -- 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 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 going to get our money back.

I think you also have your extended business line where the customer ends up owning the charger rather than EVgo. So you'd be, I think, 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?

Yes. 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 a couple of thousand installs in a 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 quarters 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 want to 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 is not exposed to utilization risk. So that business -- so 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 not necessary want to own the assets, but those sites do want to own the assets. And so we're in conversations with them about the eXtend business model. And with Meijer, as one of them, Meijer, we do have some locations of 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 as 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 EVgo provide and maybe how that's different if it's the eXtend business versus your own assets?

We have -- 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 operations center. So we can always see what's going on in 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 charge is going to be available when you show up there. And then we have software that is a B2B software where we have it is 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 bZX4, 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's handful of initiatives that I think can be pretty positive for retention, membership programs, OEM partnerships, 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?

Yes. 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 to EVgo. We're -- maybe we're even over 600,000 now. I think in 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 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 -- when you're charging, other 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 can do the playgrounds and that would be good for younger kids and parents. Yes. I wanted to get into some of the government funding. You mentioned NEVI. More broadly, there's the IRA, the Bipartisan Infrastructure. But maybe talk a little bit around the opportunity that EVgo has to be able to capitalize on some of those programs.

Well, we've all heard it. This is the -- between the Bipartisan Infrastructure Law and the IRA, this is 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, noncarbon-emitting sources, I mean it's the whole plethora of stuff, agriculture across the economy, and it needs to be. When we -- for EV charging and the EV sector, there are consumer incentives for purchasing EVs and even use EVs now. And then there are incentives like the IRA, the 30C tax credit that's going to 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 want to build, it's not limiting at all. So that's going to -- that will be straight. That will be super helpful to our financials. It extends -- 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 the tailwind that it is going to provide to be able to -- like to sort of maintain a big market presence while electrification continues to pace.

Do you have any sense of how much of the CapEx EVgo will save as a result of some of these initiatives?

Well, we are -- I think kind of a good estimate is like at least 25% is kind of what we're thinking net-net.

And then any idea on the time frame because some of these government programs, I think NEVI was a little bit slow getting out of the gates, but maybe starting to see some of the states able to move forward now.

Yes. It is yes. Yes, it's being slow. And I think as I said in a couple of 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 were always sort of hopeful but not optimistic if you can make a 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 it is indeed what's happening. I mean, Pennsylvania has given some awards. Ohio, we were the big winner in Ohio. A couple of other new awards have been announced. We've got a whole team of people that is applying for the grants and then 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 over the other award winners sign contracts with the state departments of transportation. So that's a multi-month process. So you really can't start constructing those charging stations until after the contracts are signed. So we're still probably -- even for the awards that have already been made, you're not looking at electrons flowing until the next summer, realistically speaking.

Maybe I can ask you to put your public policy maker head 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. And I've been very much looking forward to the next few questions and hear what you have to say. And I promise you some tough ones. So first on the IRA. It was a very transformative goal in many ways. If you were a policymaker and you were designing it from scratch, any changes that you'd make?

I mean, I'm more specificity and timetable from the government. I mean, we're still waiting on the IRS to give us the specific guidelines about how the IRA is going to work. Now we think we have a good sense of it, but it's taking too long. And what we -- and this is true, this is all the true with the NEVI grants. Nobody -- the unintended consequence of having this big pot of money coming is that its stymies activity until the money comes. So I think all of us in this -- if you know that you might get 25% CapEx offset in a few months' time, you're not going to 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 upper 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 for the Nevi grants, but it will 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 going to go with the NACS connector, right? EVgo is sitting there. We're ready to put the NACS connectors, and we're actually sourcing them right now. We'll be ready to provide electricity to EVs through NACS connectors before the cars are going to be ready to receive it that way, is my projection. However, some of this 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 going to do NACS." Public policy has to stay flexible when it comes to dynamic young sectors and be agile enough to change -- 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.

Yes, that's an interesting perspective. I asked about teaming with -- if you're trying to target carbon reduction, in particular, you could 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 there's probably tight hands as well for people in the government.

Yes, yes.

You brought up NACS and maybe just 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 -- to many of our chargers and locations where it made sense. And now the new thing is going to be NACS. And so we are working with our cable -- as a cable as connector. We're working with our cable manufacturers to do that. And the cost again, it's a few thousand bucks. Our overall CapEx per stall is over $100,000. So it's relatively modest. But 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.

Before I move on to some other NACS-related questions, which I do you want to cover, there was another public policy one that I skipped over by accident. It's around electrification. And I think all of us in the world have read media reports of air conditioning causing blackouts and that the grid can't support, higher levels of electric demand. In your view, how much infrastructure CapEx may be needed in order to support roughly $285 million U.S. car park becoming all electric over time?

Look, that is actually a question for the 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 then 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 2 ways. So I mean it's interesting because my husband and I were looking at this. We've got this rural property where he was thinking, we're putting solar on the roof. That's a good thing to do. And he's like, well, so maybe we should get some storage because we're in a rural property and maybe the power is going to go down. 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 growing up and they're not too damaged, but anyhow -- but my husband has pointed out that, 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 2-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 -- we're going to have more distributed solar. We're going to have -- every rooftop should be generating solar. So it's not simply building more power plants to charge EVs. It's reimagining 2-way power flows distributed generation, distributed renewables and then cars that also service batteries. So again, in my post-EVgo CEO life, is one of the things that I'm really excited to be able to contribute to that conversation.

Well, we look forward to hearing more in the future. 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?

Right now in America, we're at about 30,000 fast charges. We need to move to somewhere between 200,000 and 300,000 by 2030. There is so much growing that needs to be done to satisfy the forthcoming demand in EVs. There's going to be -- there's room for Tesla, there's room for EVgo, there's room for others. I think it's going to be a thriving interesting market. And I think what we have done is tried to put the customer first and be in places where people want to be. And we're going to continue to do that. We're going to continue to cost down all of our hardware. So that we provide reliable, convenient and cost-effective experience for drivers. And I think people are just going to keep coming back for more.

As you think about the power levels that EVgo chargers can provide, I think you have 350-kilowatt capable chargers. Is that compatible with a NACS connector?

Well, the Tesla system today doesn't do 350 kilowatts. 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 -- this gets really techy, I'm sorry about this -- doesn't have liquid cooled cables because it's not so hot. For 350 kilowatts, you need liquid cooled cable. So as we're thinking about NACS connecters, we're also thinking about powerful NACS and liquid cooled cables. And so that's what we're talking to our suppliers about. Again, the end game is that we want to provide the best charging experience for all EVs. And what you see is, 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 charging so many vehicles so much of the time. 30% of our chargers today are over 15% utilization. That surpasses even what we believe in the business, but it surpasses our expectations. There are a number of things that contribute to that. One is that increasing number of EVs. No surprise there. So you would have expected that. Another one is that our growth of our network, 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 of recession. So the cars can their max power went from in the old days of 50 kilowatts up to a Porsche Taycan is maybe now 270 kilowatt. A Lucid is about 300 kilowatts. So they're more powerful at the beginning of the charge and then even when 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 the 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, and these are all compounding effects that if you own your assets, you're in a good business in electrification. Because we have actually run the 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 via GM or Ford or anybody to take your pack that they may be less interested in partnering with other charging companies like EVgo. Because like, oh, some of my charging needs may be addressed without me having to fund it myself if I can access the Tesla network. Have you seen any change in OEM willingness to partner?

So our partnership with GM is going great, and we are in conversations with the consortium, we call the GO7, the gang of 7. And they announced -- was it in August, July? July maybe, that they were going to get together and pool some money to, again, build even faster. And that's good news because American needs more fast chargers more quickly. So we're hoping that we're going to be able to be helpful to them, maybe via eXtend, maybe by investing alongside them. It doesn't really matter. But what is pretty clear is that those OEMs need more chargers to sell their cars, a; and b, Tesla is a competitor. So the idea that there won't be a multitude of charging networks. I think that's over [ buzz ].

That's a very good context. Speaking of that specific consortium was one of the things I was going to ask you about. But the time frame for when you think EVgo could potentially address that sort of an opportunity, is that a couple of years away? Or could it be.

No, I would think media immediately. I mean, look, 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 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 they know that we're a good player that we do what we say we're going to 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 are formed and ready, then 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?

Yes, we have a legacy network that's L2. We've got maybe 1,200 L2s that are at workplaces largely like Kaiser Health hospitals. It's not -- on our owned asset throughput model, it's difficult to make money, providing stand-alone L2. So it's not really our core business. You have to do a sales-and-service model, not unlike ChargePoint, right? 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 L2 players 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 host like shopping centers, where we're going to provide fast charging for the shoppers, but those employees, they said, "Well, could you guys also put some L2s here because our employees are driving EVs now too and they're here all day long?" So we don't see it as a stand-alone business. We see it as more as a complement to the other offerings.

That's helpful. It makes sense. You spoke about some of the variety of OEMs that you work with and 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?

Yes. So 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. Because again, really, you've heard some people say like cars are actually computers on wheels now. And so what we do is we have to -- 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 -- and they're still in disguise, bring them to the lab, so we can test them with all the different manufacturers chargers and identify bugs and software. So look, we -- what's involved is tech development and then continued maintenance. I mean so we're right there, working hand and love with the OEMs to try to create a really nice charging experience.

Is there anything that needs to happen with the hardware in order to support that? Or is it more just software development.

No, it's hardware and software. It's hardware and software. I mean what we -- so 1 of the funny things that people don't really understand, the CCS protocol, 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 were ever going to come into close contact with, right? I mean, it's way more than your dryer outlet, right? And that's -- so nobody -- 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 click at a clock [indiscernible] da, da, da. And they 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 again, you don't hear -- you don't -- the signal doesn't come up on the screen that you're charging it. 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 -- that would interrupt chargers. 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 disable the charger, 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 a connection between, to answer your question, it's a connection between what happens in the hardware to make sure everything is going smoothly and the software.

And I think you made the point the last time we spoke of consumer education and making sure they plug in first.

Yes, that's right. That's right. But we're all accustomed to like everybody turns 16, they go to the gas station when they get their driver's license and you don't plug them first. So anyhow, but we have to the opposite. Or we could change that or we could say we could change the protocol on EVs. But -- and here is the thing: with Tesla, because it's all behind the curtain, you don't have to do that, right? Like 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, you need -- 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 get growth for the charging industry and perhaps something applicable for EVgo has been permitting times. And maybe talk about 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?

Yes. So the average time from idea to energization is 12 to 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 of reasons. One is that, you kind of alluded to this, they've got everybody's electrifying everything, so they got full place. Second thing is they've got crazy weather events that have been affecting the grid, right? And that -- 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 crazy weather events. And then the third thing is we're all building, everybody in the EV industry is building larger stations with bigger footprint 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 are actually in advance ahead of time providing utilities where we're going to build 12-, 18-, 24-month time tables target. Here's where we want to build here in 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 lock step with the utilities is helping.

Is there anything that is holding back the rate of growth, be it capital, supply chain, permitting or I mean kind of what would 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 the financial discipline. It's an absolute mainstay at EVgo. Now we have probably 10,000 locations that penciled a double-digit return. So that's a lot. Now the limiting character is capital. We could go faster if we had more capital. But the good news is there's capital sources that are coming. The DOE loan program is another 1 that's going to provide, fingers crossed, a lovely source of cost-competitive capital, cost competitive debt for EVgo to expand its network more quickly. I realized I didn't answer your Auto-charge question. Do you want -- so just quickly, Auto charge is the Tesla like experience. 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 -- if they give us the idea of the car and a credit card, all they need to do is drive up and plug and charge, very similar to what Tesla has 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 with any OEM that wants to do it because we've developed our part of it. and we're just waiting for -- there's a few other holdouts that haven't done it on their side, but they will.

We have time for 1 more question. I want to see if anyone in the audience would like to ask it. Otherwise, I can do it. Yes, we have a question in the back.

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?

Yes.

Yes, I think so. I mean, 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 we've got 14 -- we've got stations at 14 different Chevron stations in California right now, and we've got a master site agreement with Chevron nationally, B.ut those individual station owners are franchisees so they get to decide. So look, I think so. 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. 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 -- yes, maybe you can.

Yes. I mean we're pretty used to change -- to adapting as technology changes. And so it's Mark sort of asked. It's a couple of thousand dollars per stall that we would do in terms of the upgrade. It's not that expensive in terms of development. I mean like in a number of our connector suppliers because we don't manufacture. We rate the spec. We're thinking about this anyway. So it's just not a big deal. It's really not a big deal. As I say, I think it's a heavier lift for the OEMs because they're going to have to do some brain building inside the car. And I think that there will be one -- I mean I think it's going to be true for Tesla, too. Once there's a NACS brain inside non-Tesla cars and it's connecting outside, there's going to be gremlins that we have to underground as well. But there always is. It's a -- look, it's a young sector. And I just want -- I want the drivers to hang with us as we work with this all around.

Great. Well, Cathy, I really appreciate you taking all of our questions.

Thanks for the invitation. Lovely to be here.