EVgo (EVGO) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We are an early-stage growth company with a history of operating losses and expect to incur significant expenses and continuing losses at least for the near- and medium-term45% rewritten
2. 02Our growth and success are highly correlated with and thus dependent upon the continuing adoption of and demand for EVs and OEMs’ ability to supply such EVs to the market27% rewritten
3. 03We have experienced rapid growth in recent periods. The expected continued growth and expansion of our business may place a significant strain on management, business operations, financial condition and infrastructure and corporate culture
4. 04Our business and growth prospects have and continue to benefit, in part, from federal, state and local policies, as well as incentives and regulatory frameworks that support the adoption of EVs and the deployment of EV charging infrastructure, which are subject to change and uncertainty outside of our controlNew
5. 05restrictions that may impact the ability of us and our competitors to take advantage of such initiatives, cannot be known with any certainty at this time, and we may not reap any or all of the expected benefits of such initiativesNew
6. 06Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate
7. 07We currently face competition from a number of companies and expect to face significant competition in the future as the market for EV charging develops
8. 08We rely on a limited number of vendors for our charging equipment and related support services. A loss of any of these partners could materially and adversely affect our business, financial condition and results of operations22% rewritten
9. 09equipment, some of our charging stations may become obsolete and we may be required to incur additional costs to replace them. The occurrence of any of the foregoing may materially and adversely affect our business, financial condition and results of operationsNew
10. 10Because we are currently dependent upon a limited number of customers and OEM partners, the loss of a significant customer or OEM partner could materially and adversely affect our business, financial condition and results of operations
11. 11Our success and growth depend on our relationships with automotive OEM and fleet partners
12. 12We are required to install a substantial number of chargers pursuant to the GM Agreement. If we do not meet our obligations under this agreement, we may not be entitled to payments from GM and may be required to pay liquidated damages46% rewritten
13. 13We are required to install a substantial number of chargers pursuant to the Pilot Infrastructure Agreement. If we do not meet our obligations under this agreement, we may not be entitled to payments from the Pilot Company and may be required to pay liquidated damages, which may be significant
14. 14We are 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 payments made pursuant to the Pilot Infrastructure Agreement
15. 15Our business is subject to risks associated with construction, cost overruns and delays and other contingencies that may arise in the course of completing installations, and such risks may increase in the future as we expand the scope of such services with other parties
16. 16Disruptions in our supply chain could materially and adversely affect our business, financial condition and results of operations26% rewritten
17. 17We may need to raise additional funds, and they may not be available when needed or may only be available on unfavorable terms, which could impact our ability to fund our operations, our growth and the build-out of our network
18. 18A failure of service by one or more of our key vendors, including third-party providers of software, technology, applications or communication services that we rely on, could materially and adversely affect our business, financial condition and results of operations
19. 19If we are unable to attract and retain key employees and hire qualified management, technical, engineering, financial, legal, sales, marketing and business development personnel, our ability to compete and successfully grow our business and customer base could be harmed
20. 20We are dependent upon the availability of electricity at our current and future charging stations. Cost increases, delays and/or other restrictions on the availability of electricity would materially and adversely affect our business, financial condition and results of operations
21. 21Further, severe natural disasters could affect vendors’ data centers in a temporary or longer-term fashion which would adversely affect our ability to operate our networkNew
22. 22Some of our business objectives are dependent upon the purchase of RECs, and an increase in the cost of such certificates may adversely impact our business and results of operations30% rewritten
23. 23If we fail to offer high-quality support to Site Hosts or drivers or fail to maintain high charger availability and strong user experience, our business and reputation will suffer
24. 24Our use of artificial intelligence technologies, including generative AI, may expose us to operational, regulatory, and competitive risksNew
25. 25We may acquire additional assets, products, technologies or businesses in the future, and would be subject to risks associated with completing and integrating such acquisitions
26. 26Our business is concentrated in certain markets, exposing us to region‑specific risksNew

Risks Related to the DOE Loan

1. 27Our failure to comply with the covenants or other terms of the DOE Loan, including as a result of events beyond our control, could result in a default under the DOE Loan that could materially and adversely affect the ongoing viability of our business
2. 28The DOE Loan is secured by a substantial portion of our consolidated assets, resulting in the lack of substantial remaining assets available for incurring additional secured indebtedness22% rewritten
3. 29The restrictions imposed on Swift Borrower under the DOE Loan limit our flexibility in operating the business of Swift Borrower and could limit our flexibility in operating our business
4. 30We depend upon cash distributions from our subsidiaries, including Swift Borrower, to fund our operations, and restrictions on Swift Borrower’s ability to distribute cash to us under the DOE Loan could adversely affect our business plans33% rewritten

Risks Related to the EV Market

1. 31Changes to fuel economy standards or the success of alternative fuels may negatively impact the EV market and thus the demand for our products and services
2. 32We derive revenue from the sale of regulatory credits. There are a number of factors beyond our control that could have a material adverse effect on our ability to generate such revenue25% rewritten

Risks Related to Our Technology, Intellectual Property and Infrastructure

1. 33Our business, financial condition and results of operations may be materially and adversely affected if we are unable to maintain, protect and enforce our technology and intellectual property
2. 34We may need to defend against intellectual property infringement or misappropriation claims, which may be time-consuming and expensive and our business, financial condition and results of operations could be materially and adversely affected
3. 35The current lack of industry standards, and the anticipated future transition to the NACS charging standard, may lead to uncertainty, additional competition and unexpected costs
4. 36We currently incur, and expect to continue to incur, research and development costs and devote significant resources to developing new products, which could significantly reduce our profitability and may never result in revenue to us32% rewritten
5. 37We may be unable to leverage customer data in all geographic locations, and this limitation may impact research and development operations
6. 38Privacy concerns and laws, or other regulations, may materially and adversely affect our business, financial condition and results of operations39% rewritten

Risks Related to Finance, Tax and Accounting

1. 39Our financial condition and results of operations are likely to fluctuate on a quarterly basis in future periods, which could cause our results for a particular period to fall below expectations, resulting in a decline in the price of our common stock38% rewritten
2. 40For further discussion of our internal control over financial reporting and a description of the identified material weaknesses, see Part II, Item 9A, “Controls and Procedures” in this Annual ReportNew
3. 41Changes to applicable U.S. tax laws and regulations or exposure to additional income tax liabilities could materially and adversely affect our and EVgo OpCo’s business, financial condition and results of operations
4. 42Our or EVgo OpCo’s after-tax profitability and financial results may also be adversely affected by changes in relevant tax laws and tax rates, treaties, regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive effect39% rewritten
5. 43Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could materially and adversely affect our business, financial condition and results of operations

Risks Related to Our “Up-C” Structure and the Tax Receivable Agreement

1. 44EVgo Holdings owns the majority of our voting stock and therefore has the right to appoint a majority of our board members, and EVgo Holdings’ interests may conflict with those of other stockholders
2. 45Our only principal asset is our interest in Thunder Sub, which, in turn, holds only units issued by EVgo OpCo; accordingly, we depend on distributions from EVgo OpCo and Thunder Sub to pay taxes, make payments under the Tax Receivable Agreement and cover our corporate and other overhead expenses
3. 46We will be required to make payments under the Tax Receivable Agreement for certain tax benefits that we may claim, and the amounts of such payments could be significant84% rewritten
4. 47In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, the Company Group realizes in respect of the tax attributes subject to the Tax Receivable Agreement
5. 48If the Company Group’s payment obligations under the Tax Receivable Agreement are accelerated upon certain mergers, other forms of business combinations or other changes of control, the consideration payable to holders of Class A common stock could be substantially reduced
6. 49We will not be reimbursed for any payments made under the Tax Receivable Agreement in the event that any tax benefits are subsequently disallowed

Risks Related to Legal Matters and Regulations

1. 50Increasing and evolving attention to ESG matters may increase our costs of compliance and materially and adversely impact our business, financial condition and results of operations
2. 51Failure to comply with anti-corruption laws and regulations, anti-money laundering laws and regulations, economic sanctions, and/or export control regulations could have an adverse impact on our business

Risks Related to Our Securities

1. 52We are a “controlled company” within the meaning of the rules of the Nasdaq and the rules of the SEC. As a result, we qualify for, and rely on, exemptions from certain corporate governance requirements that would otherwise provide protection to stockholders of other companies
2. 53Provisions in our Charter and Delaware law may have the effect of discouraging lawsuits against our directors and officers
3. 54Provisions in our Charter may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for Class A common stock and could entrench management
4. 55LS Power, non-employee directors and their affiliates are not limited in their ability to compete with us, and the corporate opportunity provisions in our Charter could enable such persons to benefit from corporate opportunities that might otherwise be available to us
5. 56The market price of our Class A common stock could be adversely affected by, and our 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 us, EVgo Holdings or other large holders29% rewritten
6. 57Because we have no current plans to pay cash dividends on Class A common stock for the foreseeable future, you may not receive any return on investment unless you sell Class A common stock for a price greater than that which you paid for it30% rewritten
7. 58Our Warrants are exercisable for our 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 our stockholders
8. 59The Warrants are being accounted for as a warrant liability and are recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of the Class A common stock
9. 60If securities or industry analysts cease publishing research or reports about us, our business, or our market, or if they issue negative recommendations regarding our securities, the price and trading volume of our securities could decline