EVgo Stock Forecast: Electric vehicles are on the verge of mainstream adoption. While they certainly haven’t surpassed traditional gasoline-powered cars and trucks yet, some industry experts have come to believe the balance could tip within the current decade.
In 2021, EVs made up nine percent of all new vehicle sales worldwide. A total of 6.5 million EVs were purchased globally, which represents growth of 109 percent year-over-year.
Most of the EVs are going to consumers outside of the United States of America. Chinese drivers bought 3.2 million EVs in 2021, and another 2.3 million were sold in the European market. In fact, EVs made up more than 25 percent of all new vehicles purchased in some European countries.
The United States is lagging behind a bit – just 535,000 EVS went to US consumers, which is four percent of total new car sales in the US. It is interesting to note that 60 percent of electric vehicles sold in the US were Teslas, though that could change as American carmakers like General Motors get in on the action.
The EV market is exploding, both in the United States and around the globe. The specifics differ depending on which analysts are reporting, but an example includes Fortune Business Insights’ projection of a 24.3 percent compound annual growth rate (CAGR) from 2021 to 2028, taking the global EV market from a total value of $287.4 billion to a value of $1.3 trillion.
One of the biggest obstacles to growing EV sales, particularly in the United States, is a sort of chicken vs. egg situation. Increased interest in electric vehicles depends on consumer confidence that they can find convenient charging stations. Of course, until there is demand for charging stations, there isn’t a lot of motivation for private companies to install them.
EVgo is ready to interrupt this cycle by creating a massive network of EV chargers throughout the United States. Can it make this business model profitable before electric vehicles overtake gasoline-powered cars? What is the EVgo stock forecast, and more importantly, is EVgo stock a buy?
EVgo Installs Fast-charging Stations
At its core, EVgo is dedicated to creating the infrastructure necessary to make electric vehicles the new car of choice among US consumers. To put it more succinctly, “EVgo’s mission is to expedite mass adoption of electric vehicles for everyone.” So far, the company has installed more than 800 fast-charging stations in 34 states, covering 65 major metropolitan areas.
More than 130 million Americans live ten miles or less from an EVgo fast charger. In California, more than 80 percent of the total population is within that ten-mile radius. The company expects to triple its charging network over the next five years in preparation for its projection that electric vehicles will make up more than 50 percent of US vehicles by 2030.
EVgo’s fast chargers are powered by 100 percent renewable energy, and they are noted for their reliability. The chargers boast 98+ percent uptime, and consumer reviews are overwhelmingly positive.
To date, EVgo has enrolled 300,000 customers in one of its three payment plans. Occasional users typically choose the Pay-As-You-Go option, while those who need the station roughly once a month tend to prefer a standard EVgo Membership.
Drivers who need more frequent charges can subscribe to the EVgo Plus plan, which offers lower rates in exchange for a monthly fee.
EVgo Vs Chargepoint, Blink Charging & Volta
Of course, EVgo isn’t the only company working towards a sustainably-fueled future.
There are a number of competitors after the same target market. Three of EVgo’s biggest challengers include ChargePoint (CHPT), Blink Charging (BLNK), and Volta (VLTA). Tesla also has its own network of charging stations.
For the moment, when it comes to their share prices, EVgo, ChargePoint, Blink Charging, and Volta are rising and falling together based on EV-related news. For example, the ongoing debate over the massive US infrastructure spending bill created weeks of volatility for all of the EV charging stocks. In mid-November 2021, all four soared up only to come crashing down by early December.
ChargePoint currently holds the largest share of the market, but it is too early to say whether it can remain the market leader. The global EV charging market, valued at $17.59 billion in 2021, is expected to realize a CAGR of 30.26 percent through 2028.
If accurate, the global EV charging market will hit $111.90 billion by 2028. That gives EVgo plenty of room to grow and expand its market share, perhaps surpassing its current competitors.
Will Lawmakers Derail EVgo Plans?
The transition to electric vehicles appears inevitable, despite the fact that consumers have been hesitant about the change until recently. That puts EVgo in the right place at the right time to be a part of this emerging industry.
Nonetheless, EVgo stock has its share of risk factors. For example, investors who bought in when share prices went up during US infrastructure legislation discussions would likely point out that relying on lawmakers when making trading decisions is unwise. There are sure to be more ups and downs related to proposed clean energy and infrastructure legislation, so investors should be cautious during these volatile periods.
Other concerns are primarily centered around the fact that the industry is in a very early stage. As with any emerging industry, it is unclear how it will grow, expand, and organize in the coming years. While EVgo appears to be ready to assume a leadership role in the future of EV charging, all of that could change with the entrance of new competition – particularly if more advanced technology is involved.
EVgo Stock Forecast
EVgo began trading publicly in July 2021 by merging with a special purpose acquisition company (SPAC).
As with any new stock, price has been volatile. That was amplified by volatility within the larger industry. For now, EVgo isn’t turning a profit, but that is also no reason for concern so early in its development. However, it does make forecasting the stock more difficult.
There isn’t a consensus among analysts in terms of whether to buy EVgo stock. For now, those that cover the company are evenly split between buy and hold recommendations. That is likely to change as EVgo’s trajectory becomes clearer through its Q2 2021, full-year 2021, and Q1 2022 earnings reports.
What Is EVgo Price Target?
Since EVgo began trading, prices have ranged between $7 per share and $20.15 per share. As of mid-February 2022, the stock has gained just over five percent since July 2021.
Analysts have estimated that EVgo share prices could range between $9 and $22 per share over the next 12-months, with the median EVgo price target coming in at $15 per share.
EVGO Stock Prediction: Is EVgo a Buy or Sell?
In the growing EV charging marketplace, EVgo is poised to be an industry leader. Among other smart moves, it has partnered with companies like Subaru, General Motors, and Uber, and there are other large alliances in the works.
Construction on additional charging stations is going full-speed ahead, and the total number of customer accounts is growing.
While any emerging industry is fairly risky, and a new company in a new industry is doubly risky, investors interested in adding EV-related assets to their portfolios should consider EVgo a buy.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.