Shares of the electric vehicle charging company EVgo (NASDAQ:EVGO) were up nearly 5% within the first 10 minutes of today’s stock market session, trading at approximately $12.80. Why does EVgo stock have momentum today at the opening of the U.S. stock market?
It’s mainly a news-driven reaction. News announced a partnership with Chase bank to install some electric vehicle stations at 50 branch locations, starting this summer.
Fast chargers provided by EVgo will be installed in “select Chase branch locations in states like California, Indiana, Illinois, New York, Oregon, and Pennsylvania.”
EVgo estimates when the chargers are installed, they’ll “deliver up to 9.4million kWh annually to provide nearly 30 million EV miles charged,” which will certainly help boost revenue.
A notable advantage of EVgo’s electric vehicle chargers is that they are powered by 100% renewable energy and have a focus on promoting environmental sustainability. Chase has a goal to reduce operational environmental impact by adding on-site solar power in 400 branches by the end of 2022. This means EVgo’s agreement could possibly be extended should their goals align.
Other banks, retail stores and businesses that can offer customers the ability to charge their electric vehicles during other tasks like shopping will help EVgo expand its network and make the transition to transportation electrification much sooner than expected.
Chase has a vast network of thousands of retail branches across the U.S. The keyword to focus on for this partnership is “pilot.” As in TV shows, a pilot is a test, and if goes well, more episodes will follow. If Chase evaluates that installing EV fast chargers at some of its branches adds value to its customers, a decision to expand the partnership with EVgo is highly likely. A successful partnership leading to more branch installations would boost EVgo’s revenue growth, on top of an already impressive 52% gain in 2021.
This important partnership with Chase could be the beginning of EVgo’s profitability, especially if similar partnerships are announced in the future. Bullish investors could take this positive news as a signal to start building positions in EVgo stock.
On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.