The Motley Fool highlights reasons to buy EVgo stock despite Trump’s stance on EVs
The Motley Fool has spotlighted two reasons to buy shares of EVgo, a smaller company that builds charging stations for electric vehicles (EVs). The U.S. EV market is growing, and even the new administration of President Donald Trump is unlikely to stifle this growth. Moreover, the company holds a competitive advantage: Its stations can charge a vehicle to 80% in less than an hour. However, the Motley Fool cautions investors to be mindful of risks as EVgo remains unprofitable.
Details
EVgo stock is deserving of investor attention for two reasons, according to Motley Fool contributor James Brumley. First, while EV sales are slowing down, they are still growing and are likely to keep doing so for the indefinite future, he notes. Therefore, demand for EV infrastructure will continue to grow, as well. EVgo stations operate on direct current and can charge an EV to 80% in under an hour, versus several hours with alternatives. This is the second reason to buy EVgo stock, Brumley notes. He believes the company could outperform market expectations.
About EVgo
EVgo is an EV charging station maker that operates over 1,000 stations. In 2024, the U.S. Department of Energy provided the company with a $1.05 billion loan guarantee, which, as noted by industry outlet E&E News at the time, would help expand its charging network. Meanwhile, Reuters points out that this financing would also enable EVgo to compete with Tesla, owned by Elon Musk. EVgo stock soared 60% on the news, peaking at $8.90 per share on October 24.
Since then, however, the stock has plunged more than 60%. On January 31, it closed at $3.47 per share. This decline is not surprising, Brumley notes. Mere hours after his inauguration, Trump revoked an executive order signed by his predecessor, Joe Biden, that required 50% of new cars sold in the U.S. to be zero-emission by 2030.
However, inertia is hard to overcome, the Motley Fool quoted Mack Hogan, deputy editor of industry news website Inside EV, as saying.
«EVs are 22% of the auto market in California, electrified vehicles are half the market in China… There’s nothing the federal government can do to stop it,» Hogan noted.
Thus, despite policy headwinds, new EV sales are projected to grow 10% in 2025, Brumley cites a forecast by Cox Automotive. Credence Research expects the EV charging station market to grow at a CAGR of 34% through 2032.
«Here’s why you might want to take a stake in up-and-coming EVgo in the wake of its share price plunge,» Brumley says.
However, he also cautions investors to remain mindful of the risks. First, the EV industry is still in its early stages, making it difficult to predict what it will look like even a few years from now.
Second, EVgo is currently unprofitable, and it’s unclear when or if that will change. In its most recent earnings report, for the third quarter of 2024, the company posted 92% year-over-year growth in revenue to $67.5 million and an 18% increase in the net loss to $33.3 million.
According to MarketWatch, among the 12 analysts covering EVgo, there are ten «buys,» one «hold,» and one «sell.» Their average target price of $8.17 per share suggests upside of more than 135%.
Context
The U.S. EV market had been growing rapidly until recently. In 2022, sales surged 66%, followed by a 50% increase in 2023, but fell to just 7.5% last year, Brumley cites data from auto dealer service provider Cox Automotive. He attributes the stronger growth in previous years to expanded production capacity and the introduction of new EV models. In 2024, total new vehicle sales of all types grew just 2.2% to about 16 million, according to Wards Intelligence data cited by Brumley.
