Q1 2023 EVgo In Earnings Call
In the quarter and rural markets.
Why utilization above 10%.
We're seeing metro areas in Texas, Florida, and Nevada, with double digit utilization as well.
These up into the right results from Q1, and those we reported on our last earnings call from the entirety of 2022 are a testament to the long term opportunity at easy go that you've heard us describe since we became a public company a couple of years ago.
Today, I'll lean into three key pillars supporting <unk> success.
First <unk> business model is leveraged to increasing easy adoption when EV sales growth.
<unk> business grows with it.
Secondly, EBIT goes robust market position is built on a foundation of value, creating blue ribbon partnerships with Oems governments site hosts and suites.
These commercial partnerships continue to grow and expand.
And third <unk> technology leadership is charting the course for EV charging and EV ownership more broadly, creating the need for individual drivers fleet businesses automakers retailers and governments to seamlessly be part of the transportation Revolution that is upon us.
First let's talk about <unk> business model leverage to the growth in Evs.
The market for electric vehicles is continuing to grow at a blistering pace.
In 2022, there were $2 2 million Evs in operation and that is expected to grow to over $33 million by 2030.
40% compound annual growth rate.
Bloomberg's 2022, BNET report predicted that more than half of all passenger car sold in the U S will be evs by 2030.
And I'll note optimistically that we've already exceeded BNS original EV adoption figures for the early part of this decade.
As mass adoption of engagements underway in the United States. There is a need for more charging and more fast charging in particular.
S&P global has predicted that the U S would need approximately 170000 fast charges by 2030 and eight.
<unk> growth from today.
Apartment dwellers high mileage drivers such as rideshare drivers and fleets are all going electric and.
<unk> has found that even drivers who primarily charge at home rely on fast charging for day tripping longer road trip and even kilowatt hour top ups, while doing errands around town.
Hence the increase in utilization I referenced earlier that we are witnessing and a growing number of markets across the country well beyond California.
We're committed to building this business in a manner that is sustainable and highly profitable for our shareholders.
As you know <unk> core business is an asset ownership, we carefully invest in charging infrastructure, where we believe it will deliver our targeted returns through ever increasing asset utilization.
We operate a best in class public network, and expanding that own network to new geography that has our rigorous investment hurdles.
And we own and operate charging assets for a variety of fleet customers.
In addition, we apply our expertise inciting building and operating charging infrastructure to accretive capital light business lines, serving both retail and fleet segments.
Easy go extend and are behind the fence offerings to fleet expands <unk> competitive position and broaden <unk> customer reach while providing us with additional predictable recurring revenue streams as a builder, operator, and integrator, but insulating us from utilization risk in markets, where we don't want that.
Closure.
Building a business leverage to rising EV adoption has proven to be a sound commercial thesis.
Next let's talk about the important pillar of partnerships to EBIT goes market leadership and financial position.
<unk> has a long history in cultivating lasting business relationships with marquee partners that create meaningful commercial win wins.
On the OEM side, you've heard us discuss GM, Toyota Subaru and Nissan in particular.
And the countless brand named retail partnerships like target Safeway Kroger whole foods home Depot, Lowe's Chase Bank and the recent addition, chipotle, where onsite fast charging creates foot traffic for brick and mortar stores and restaurants.
Indigo has partnerships with utilities and government funders are equally important financial contributors to our growth to date, and we expect them to continue to be.
With respect to our current auto manufacturer partners.
<unk> provided <unk> go with capital funding to offset development costs. They.
They create and pay for fast charging credit programs to attract EV drivers to <unk>.
Sure they procure easy dose proprietary software solutions to enhance their EV drivers experience.
And with the OEM investment in <unk> on the rise we are hopeful <unk> collaboration with the Oems will deepen further.
G N. The number one U S. Carmaker in 2022, and one of those landmark partners is investing more than $35 billion in electric vehicles and autonomous vehicles over the next several years instead.
In February GM committed to producing about 400000 Evs during 2024.
I think stone to meet its goal of reaching annual production of 1 million Evs by 2025.
GM has announced they will have nine EDI models available in the U S. By the end of this year, including versions of the popular Chevy Silverado pickup truck as well as the equinox and blazer SUV.
Nissan accelerated in PV plants in the U S and can you did nearly $18 billion to electrify more of its overall lineup.
Nissan introduced 19, Evs by 2030, an increase from its original goal of 15, they expect 44% of total sales will be electric by them.
Toyota building on their introduction of a fully electric visa Forex last year is investing $35 billion in evs globally.
Similarly, Subaru, which introduced the soltero last year expects to offer several more EV models by 2025 as it continues to ramp its investments in electrification.
With easy go being leveraged to growth in Evs on the road. These are particularly exciting commitments from EV goes partner OEM.
Another important area is rideshare, where EBIT goes partnerships with both Lyft and Uber continues to deliver both network throughput and revenue as well as positive environmental benefits to the communities in which drivers on their platform live and work.
As we shared before rideshare drivers are ideal customers for fast charging.
Rideshare driver typically drive more than a day and most people do in a week and may need to be able to charge fast. So they can get back on the road.
With such a user profile, we see Uber and Lyft drivers increasing utilization on our network significantly with Q1 throughput more than tripling from a year ago.
Both Hoover endless are great partners and are heavily marketing the benefits of evs for both their drivers and their riders.
Hoover's comfort electric option is now available in nearly 40 cities throughout North America, an important step in the company's effort to reach an easy only fleet by 2030.
Likewise this is helping drivers makes the switch to EV offering a cash bonus for drivers who offer at least 50 by using a qualified E D.
Brighthouse are also important partners at easy go we provide the charging our seacoast partners offer great amenities, while the driver charges.
And our relationships with these marquee partners are deepening through our sophisticated network planning tool <unk> go has identified literally thousands of locations across America, where shareholder value could be created if EDI go build a fast charging station at that partner site.
Earlier today in our earnings release easy go announce we have entered into a new agreement to expand our collaboration with Chevron first launched in 2015 to develop EV charging sites in major California markets.
<unk> will now offer chevron and Texaco locations across the U S turnkey fast charging solutions with a variety of ownership model, including Vigo extent.
There are more than 8000, Chevron and Texaco retail stations across the U S that will have access to <unk> expertise and solutions, including fast Chargers up to 350 kilowatts.
Under the agreement <unk> will provide hardware design and construction of charging at these sites as well as operations and maintenance networking and software solutions.
<unk> and its independently owned retailer and marketer network will also be well positioned to take advantage of the funding available through the government's national electric vehicle infrastructure or Navy program.
With Chevron is the latest example of a deepening retailer partnerships <unk> is excited about the opportunity to bring more convenient fast charging options to EV drivers wherever they need to be.
And on fleet the deepening of partner relationships is again the theme for this quarter with additional sites Avatar two <unk> current fleet partners.
MHS a class eight truck fleet and a national food and beverage company are each building their second EV go dedicated fleet charging site with each also using easy go optima as their fleet management software.
It's still early days in fleet electrification, we're excited to have <unk> business grow alongside the EV investments fleet operators and I think as more vehicles become available to that.
We think those partnerships with governments policymakers is critical to our success as well and the federal government recently announced it is taking more bold action to spur even faster growth of electrification.
On top of the investments under the bipartisan infrastructure law and the inflation reduction that we discussed on our last earnings call in April the Biden administration announced a tighter overall regulatory framework for the auto industry, including new vehicle emission standards through 2032.
Once the new emission standards are in place the EPA estimates that Evs could account for 60% of all new passenger car sales by 2030 and 67% by 2032.
Notably this was surpassed even DNS forecast.
Now returning to the $5 billion in federal funding through the Navy program that I just mentioned.
The latest is at this particular tailwind it's more like a tale breeze at the moment directionally terrific, but moving more slowly than originally indicated by government officials.
The status of this no states have made Debbie awards, yet several states have released Rfps and are reviewing proposals from EV go on others.
And the vast majority of states haven't yet solicited proposals from the industry, partially because of the state's original program beside needed to incorporate the final program guidelines and buy American requirements that the federal government issued in February .
Notwithstanding the current time lag. However, easy go remains excited about the potential to apply nearly funds to both owned assets and stations deployed under easy go extend with the majority of financial benefits likely to be realized in 2024 and beyond.
Similarly, we remain enthusiastic about the opportunities for the expansion and extension of 36 tax credits under the IRI, but while new guidance for the consumer vehicle tax credits had been issued the IRS has not yet issued any further implementation guidance for the 30 C infrastructure tax credits.
The industry is eagerly awaiting treasuries guidance.
And finally, let me turn to the third pillar of <unk> success technology innovation.
We've been a technology leader in the EV charging space and innovation continues to be an important differentiator for you to go and creating value for drivers and for deepening and widening our own competitive moat.
I mean think about it now that we can all do one click ordering on Amazon or cashless car service with an app or electronic boarding passes when we fly it's sometimes hard to remember the overtime really less than 10 years ago. When we had the place orders by phone or cash from an ATM or stand in a long line of the air.
For it to get a paper boarding pass.
The industry is young and are aiming to go with to make the EV charging experience as seamless as one click ordering.
This requires a highly sophisticated approach to our own technology.
Well, we don't manufacture the charging hardware, we painstakingly specify the attributes of each charging products, we deploy undertaking rigorous pre market testing in our lab related to charter performance interoperability and reliability.
In fact, a couple of weeks ago Easy go hosted research leaders from a number of the department of Energy's National Laboratories for a detailed run through of the anatomy of a charging session and the industry wide imperatives for creating uniform reliability and enhanced customer experience.
As you've heard me say if it goes fast Chargers are complex machines that run hundreds of thousands of lines of code and connect in real time to our network management platform and customer facing applications, which in turn run millions of lines of code and integrated dozens of additional platform across the ecosystem such as payment processing.
Industry, and roaming partners and EV Oems the correct functioning of all of which is essential to creating an exemplary customer experience.
Practically speaking EV charges close to 50 different models of Evs, but our network the day each with its own unique charging behavior governed by battery performance in software.
At technology marriage has to work not just between <unk> charging hardware and full software stack, but also between our EV Chargers and the hardware and software of the EV itself.
And between EV Chargers and drive our cell phone and between EV charges and utilities delivering electricity to the charters.
And between EV Chargers and site host retailers and between the EV charging networks with whom we inter operate.
And even though we welcome these demands and in fact, we upped the ante looking beyond basic functionality.
We created auto charge plus so the drivers can charge their car without swiping, a credit card or tapping in that.
We built <unk> reservations. So a driver can be sure of charter is available when they need one we.
We built easy go inside so that Oems can help their customers find the closest charging stations and the dash their EV.
We built pay with plug here to both find charges and help manage charging which we are currently piloting in all of <unk> charges in the L. A area.
We've partnered with Amazon because it a driver will soon be able to ask Alexa to help them find a charter.
And we built indigo advantage to give drivers special deals, while they charge and today announced the latest offering here entering into a new agreement with audible to bring trial memberships to <unk> customers later in 2023, delivering audio book EV drivers, while they charge.
From deploying the first 350 kilowatt charter in the U S. The pioneering power sharing technology to where we are today you can go with setting the benchmarks of what the EV driver experience should be and what our <unk> partners will count on when serving their EV driving customers with innovation in our DNA you can.
That theres more good stuff to come.
With that I'll turn the call over to <unk> CFO Olga to give more detail on first quarter results.
Thank you Kathy.
So it continues to build on our track record of growth and execution in the first quarter of 'twenty, One fifth Street.
If you go added about 220, new stores to our network during the quarter.
And installed and operational under construction were approximately 3100 at quarter end.
Both access engineering and construction development pipeline ended the quarter at around 3500 stores.
First quarter revenue of $25 $3 million grew 229% year over year.
This significant increase in revenue was primarily driven by continued execution of our Eva go expand construct with pilot flying J in partnership with General Motors.
And growing charging revenue.
Adjusted gross margin declined from 37, 2% in the first quarter of 2022 to 25, 3% in the first quarter of 'twenty one to three.
Due to accelerated revenue recognition of regulatory credits in Q1, 2022, and la where else CFS pricing this year.
Adjusted gross margin of 25, 3% in the first quarter of 2023 improved versus the fourth quarter of 'twenty one to two due to annual break its revenue recognition in the network revenue OEM business line of approximately $2 1 million.
Adjusted G&A as a percent of around the new <unk>.
Klein from 273% in the first quarter of 2022.
205% in the first quarter of 2000 went to St.
Illustrating the leverage he would go continues to be alive.
Its investments in G&A, both administrative and grows driven payroll and non payroll and bathroom, we reported adjusted EBITDA of negative $21 million in the first quarter of two 1% to swing.
First was negative $18 $2 million in Q1 'twenty to 'twenty two.
Cash cash equivalents and restricted cash were 106 to three $8 million as of March 31st two lenses one history cop.
<unk> was $65 $2 million during the first quarter as <unk> continued to execute against our long from charter deployment plan.
Roughly 50% of this number was driven by equipment prepayments.
Deliveries for the rest of consequence of screen needs. That's cutbacks levels are not representative of this year's quarterly run rate in April it was all raised $5 $7 million in that proceeds by issuing approximately 892.
<unk> thousand shares of class a common stock.
And at the market equity offering.
We anticipate using the ATM opportunistically going forward.
And we have $183 5 million of capacity remaining under the ATM program now looking at network trends in the first quarter.
As out of manufacturers release, new models of Evs and ramp production electric vehicles in operation or var.
Increasing steadily driving even though revenues and EBIT goes business model is centered around the leverage to the adoption as Kathy mentioned.
At the end of two answers one to two.
Two points to make on Evs in operation and it is estimated the viewing the first quarter of 2023. This climbed by another 300000 movies to two and a half million overall on the U S roads.
If it goes network throughput.
Continued to significantly outpace our operational store growth and E V O O growth total kilowatt hours. The spends were 710.9 Neil N.
124% year over year increase compares to operational growth of 33% and <unk> growth of 53% over the same time period.
This is driven by an increasing contribution of rideshare traffic on our network.
As a reminder, an average commute to drive 11000 miles a year and the average rideshare driver drive what is a 60000 miles a year when driving full time.
And then realize much more on D C charging.
Network throughput also rose as a result of increased EV battery sizes and higher reliance on public charging by our newer retail customers.
Versus early adopters, who relied mostly on home charging.
Average monthly throughput per active customer has increased by more than a third over the last 12 months.
Even though markets with high adoption rates continued to demonstrate solid utilization levels.
Foreign you shows consistent double digit utilization with Los Angeles being the top markets and passing 14, 4% utilization in Q1.
Nationally key markets in Texas, Florida, and Nevada, I, among top 10 performers with consistent double digit utilization as well.
When looking at top performing stores, if you go in that book.
All in high EV adoption rates markets.
We're clearly observing that they all right in line with our long term for Stahl and revenue targets.
Average revenue per store is expected to further increase driven by high utilization with more evs on the road and highest charge rate probably the easiest to themselves.
When taking a look at top 10% install.
Top 20% of installed measured by utilization on our whole network as Kathy mentioned were observing consistent utilization in excess of 25% and 20% respectively.
Clearly signalling potential for additional markets to realize such levels was increasing EV adoption.
The average charged rate realized that even though the size is increasing due to improving Bachelor of capabilities of the east.
And even those ongoing efforts to switch to higher powered equipment.
This higher average charge rates are now in that book men more kilowatt hours expense every hour when somebody is charging.
Driving profitability at all.
Uh huh.
Average network charge rate is poised for an increased overtime further driven by new vehicles was big of batteries coming online.
Such network trends are reinforcing our seizes on the business being leveraged to EV adoption and proving the advantages of our scalable business model underpinned by attractive public network project economics.
As a reminder, we deploy capital following rigorous investment criteria and underwrite our portfolios total boss double digits pretax Unlevered IRR.
Well the assets deployed in the next 24 months, we expect our capex for <unk> to be between 130000 and.
150000, with Rockwood, 60% of it being labor and materials and the remainder being equipment was an eight to 10 year useful life of field.
Useful life range depends on the type of charge are deployed and the size type.
Capex to install is anticipated to decline as we near Taunton facility driven by the English through learning curve on the equipment side.
So I think the capital cost is funding from partner automakers and or grant funding at the local state and federal government levels.
Yeah.
As a central to our business phases, and the commercial opportunity in front of us.
Got plans to continue to grow our public network as EV adoption increases.
The upshot is that one there are 40 meal in electric vehicles on U S throne.
We expect to operate 25 to 30000 public stalled.
All underwritten to our internal profitability hurdle.
As we discussed during our last earnings call the public network, because our core business and is expected to contribute 75% to 80% of either go revenue overtime.
Our fleet have expand and ancillary businesses, what would remain Nashville, and accretive complements to our core business model.
And then optimal risk return profile to illegal.
Even though it is affirming our full year revenue guidance.
$105 million to $150 million and adjusted EBITDA of negative seven to eight to negative $60 million. We expect to have a toggle of 3400 to 4000 DC fast charging adults in operation under construction.
The end of 2023 as a reminder, this metric includes P J salt.
Given the variability of revenue recognition timing of several of our large partner agreements, whereas dissipates some sequential fluctuations in revenue in particular on the extend the revenue line.
The second quarters Twins, just wanted to see our networks throughput is increasing compared to Q1, and we expect sequential revenue growth in our core charging the business throughout 2023.
With this I will turn the call over to the operator for questions.
Yeah.
As a reminder, in order to ask a question press star and the number one on your telephone keypad. Please limit your questions to one initial and one follow up question.
And our first question will come from Gaped out your line is open.
Thanks, Good morning test in Oregon, Olga and everyone. Thanks for all the prepared remarks.
I just was hoping we could maybe just revisit.
Some of the comments around Capex and how <unk> is not really representative of the quarterly run rate.
So maybe older could you just help us understand how that.
Brian's moving forward.
And then also what does that mean for 2024.
All of that.
Prepaying for as much equipment this year, given the step down in capital.
Yeah. So so that's a good question. Thanks, so much Gabe so let's start from the start.
We already paid Iraq was $17 million for 2023 assets last here, just spend 60 meal and a little over 60 million with the first quarter. This year.
Most equipments, which were prepaid will be used for 'twenty, one to three assets. Some of that equipment will be used for 2024 assets. So there is a mix obviously heavily loaded towards sponsors wants us to use it but there is a 2024 usage so the capex.
The quarterly Capex is expected to go down however that does not mean that we will not be.
Preparing for 2024, we will we will start do windows in Q3, and Q4, and we will land the year with assets under construction in line with our transcon before expectation. So we're not worried about that and even again. It's also there was a quite large amount.
What are the span for 'twenty to 'twenty three our system you can judge by looking at the first quarter and how much we spend on them last year. So it all it all makes sense for us at all it'll position us for the optimal cash spans and the optimal start after once it once before in terms of targeted.
Stores in operation.
Got it. Thanks. That's helpful. So then again I guess, the $164 million or so on the balance sheet. That's enough to get you through to 2024 is that right.
So it wasn't my daughters of floods Atlanta four correct.
Okay. The same guidance, we gave oh the same notion we gave a in all during our last call that's enough cash distress in the majority of 2024.
Okay understood great. Thanks, and then just a quick follow up you mentioned Kathy.
Debbie maybe until breeze, and maybe being a bit slower than anticipated, but could you maybe.
Just given some of the biomarker compliant issues around the hardware and can you maybe give us an update on where your suppliers are in that respect in terms of our insurance from U S production. Thanks, everyone.
Yeah. Thanks, Gabe so where are our two suppliers that we talked about last time on the Delta Signet has factories underway and every indication is that there are full speed ahead, and that's all going to plan and we should have more specificity for you probably by the next earnings call about about the guidance, we're still waiting from some.
From the Department of Transportation Federal Highway folks on certain of the buy American provisions. We've also got again, Jonathan Levy, our public policy experts.
On the phone Jonathan do you want to add anything.
I guess just that last point Kathy you were making is that <unk> indicated to a number of policy folks that they're getting a lot of questions about their buy America guidance and therefore, they're planning on issuing an essay queue at some point too. So we've been very engaged with broken the administration about the.
Kind of unintended consequences as well as the practical realities of buy America as currently done as Kathy noted in every forum, we have been working with our suppliers to the U S manufacturing for a long time is that we're still working assiduously with them, but in the meantime, there is some clarity that we're expecting to hopefully come soon from the federal government.
Got it got it thanks, Jonathan Thanks, everyone.
And the next question comes from James West Your line is open.
Hey, good morning, Kathy Olga.
Good morning.
So cut me off.
The what's the gating factor now in terms of <unk>.
Your build out of additional infrastructure digital stores as it is it capital is at the utilities I know you don't want to be too far ahead of the.
The vehicles are rising, but kind of what's the what are the what are the if you could push it harder and go faster what would what the whole job from that.
Why would you not push order I guess.
So to your point about the utilities the utilities are a.
They continue to be a near term gating item, but it's almost like a predictable gating item now. So we had last quarter. We had a couple of hundred called awaiting utility Energizer issued.
And again I think I've said before James I mean, that's just a matter of time, whether it's like and some of them had been waiting for the utilities to show up to do the final inspection for six weeks, but they eventually will show up. So that's that's that's not a near term gating item I mean, the we got a macro tailwind in the sector that is obviously pushing up into the right as you as you've heard me say many many times.
We have identified thousands of perspective stalls it'll create NPV for us with our with our partners one of the reasons I lean so far into our marquee partnerships. If you could go is that they continue to bring us good good good prospects. So over the next five years, yeah, we could put more good capital to work.
But at the moment, we've got a great plan continue to be able to go up into the right for 'twenty three and we got the capital together through 2023 and most of the 24. So it's a it's just really a question of how fast we want to lean in to be kind of.
Going at the right pace, given the macro the macros of the overall economy.
Okay. It makes sense and then on <unk>.
<unk> been testing a lot of different pricing strategies.
Over the last several quarters I'm, just curious how that's been going well.
Lower pricing at off peak times things like that could you maybe update us on how those plans are progressing and kind of what youre seeing in terms of customer behavior.
Yeah sure. So what was seen in terms of customer behavior is a very strong affinity towards subscription plan.
Three different tiers and continues to kind of experiments because the subscription Glenn usually doesn't just include actual subscription plus access to cheaper per kilowatt hour rate, but also some other perks like double.
Some of the points off the reservation. So we'll continue to experiment with those bundles, but we see a very strong uptake on all three different subscription types would have so that means subscriptions are here to stay and will be essential part of our business going forward and on in terms of the time of use rates with <unk>.
We'll observe and that our more customer sensitive.
So the more price sensitive customer segments, such as rideshare, the very very reactive towards those those signals and we'll see how they alter their behavior to show up at all on that book of cheaper times. However, when we're looking at that kind of like daily commuters with.
Which is some response depending on location and then there is a wide range of.
Maybe more affluent locations across the key stated where customers are just not us.
Rate sensitive as we originally thought so all of US remain true and we'll continue to.
To refine those and our Chief revenue Officer, who joined US a few months ago. That's one of the main area of cobalt, which has been a lot of time on it but we'll be updating the market as we learn more interest and insights from that.
Okay got it thanks.
Okay.
The next question comes from Doug Becker Your line is open.
Thank you.
So the record number of installations was highlighted during the quarter you just addressed some of the gating items is it.
Reasonable to assume installations increase each quarter over the course of the EU based on what Youre seeing today.
We've got a plan for us we've got a plan that.
It is probably relatively stable over this year in terms of numbers that are gonna go lives, but the practical reality is that it always bounces around a bit it sounds like the gating item in the utilities. It is nearly impossible for us to predict which utility inspectors are going to show up in which regions of America, and which won't so we've got a general plan, we know well.
We've got the target for the full year that we're confident of hitting that Mike just bounce around a little bit as we as we go through the course of the year.
Completely makes sense and then the follow up kind of a pointed question, but consensus revenue was toward the high end would be the full year guidance range.
Is that reasonable based on everything youre, seeing and particularly in light of the commentary on the <unk> program and just the volatility with the P. S. J.
A alluded to previously.
Yeah, well what won't be refine in our range at this time, we guided the market only a few weeks ago during our Q4 call.
Much of our new information has come in since then but we probably next time, we speak will have or more to fund.
So rather than to inform the market on how the rest of the year will look like and then everybody can jobs because of the concerns but at this time.
<unk> committed to our wider range I'm kind of repeating all the reasons. We explained last time in terms of Bubba qualifications beef jags of Houston, and some still volatility on EV sales fronts. It is sales started off the year quite strong we don't we don't see any recession science, but we're observing with so.
We're not even halfway through the year. So at this time, we won't comment on a more narrow range of our guidance.
Well in the game.
Fair enough.
Kathy Thank you.
Thank you. Thank you.
Yeah.
Your next question comes from Bill Peterson Your line is open.
Yeah, Hi, good morning, and thanks for taking my questions.
You saw that.
<unk> seen that extra Expo last week and I'm sure you had a number of conversations with fleets, but I guess specifically.
<unk>.
Focusing on the extend offerings or more like a rideshare or the comments, we have partners that maybe you'd prefer to use your own owned and operator networks.
Yeah, I'll do that.
I'm going to toss that one to Jonathan Jonathan.
Yes, it's a great question. So I think when we think about the extended offering we typically think about it.
A white label offering for retail.
But you can think of the same kind of logic about the flexibility that <unk> has for fleet operators you are very familiar with what we do with Uber and Lyft with access our public network, but we also have this flexibility on where is it that we own chargers the customers operate as customers use sometimes a dedicated stations like we've been doing with the autonomous vehicle fleets, but most of the folks looking to electrify.
Neither depots in the fleet space Theyre looking to own the charging themselves and so that is a little bit more like an analogue to that extend the business model and I think some of that is driven by the incentive structures a lot of the fleet's doing early pilots are pursuing funding for those projects, which gives them an incentive to buy it whereas we do know there.
Or some others out there that will have more of an interest of more of a charging as a service offering that you could go also has where we retain ownership in the customers that can get more of a monthly fee model.
The answer to the question of the concept is being there's different solutions for different fleets, but the majority of the depot fleet operators are looking to own that charging themselves at this point.
We're just not Jonathan.
Yeah.
Sorry, sorry, so I was just going to add like I said, we've got a couple of contracts with the autonomous fleet guys, where they want what we own the asset. So again. It's this is what we said sort of continuously that we will we will meet the customers where they are as long as we can create a nice return profile for EV go commensurate with the risk that we're taking so and so far.
We know we can do the Ala extends behind defense with some place that we can do the asset ownership model with others.
Yes, yes, that's exactly right, okay that makes sense to me.
Second question, So you talked about utilization in Los Angeles being the highest market.
If you could give us a feel for where that is.
Looking ahead, where would you want utilization to level out past would you prefer to drive it higher in Norway. For example, or would you want to kind of keep a word.
Kind of add sites to kind of match the growth of <unk>.
Cars in the market just trying to get a feel for how you, especially coming out of the pandemic, where you would like some utilization could be arguing about trade too much friction, but obviously give you the best return.
Yeah, So Los Angeles as I have mentioned this during my prepared remarks is a little over 14% for the for the Q1, but it is one of our best performing markets in terms of where we want utilization to be over time, we think mid term when we underwrite the OSM. So of course, we wanted it to be higher.
And we already observed high utilizations in certain pockets of our network like top 10% of all perform install consistently illustrates utilization in excess of 25%. So that's that's probably a good indicator of where the overall macro can go over time now when we think about near term.
Uh huh.
Here, our focus is on growing the network and grow in the throughput on the network there could be some.
Near term fluctuations in utilization, while let's say that in the quarter, when we build a little faster than the throughput because grow now that wasn't this particular quarter, but that's what I can't happen.
That is okay with us so in the near term when the network is still small and we're really focused on positioning for our kind of growth you could see some fluctuations midterm to long term. We of course are very much focused on growing utilization and expect that all of the key markets will will start showing high utilization.
Levels in the next few years on a consistent basis.
Yeah.
Bill I, just just to remind you that that we have like in the early days of the David program. We had some some charging stations up right in the Bay area, where you where you live which had over 60% utilization because of rideshare drivers now that was that that was actually that was a lot, but one of the reasons that we have pioneered both the innovative pricing.
Schemes to sort of attract people to off peak hours and the reservation is it that there is not a it's not as if we want to stop utilization at 20% right. So what we wanted to do is enable the Texas E. The assets to get us optimally by using technology to allow people to.
When they want to go be sure that the charges going to be there.
Yes, it makes a lot of construct thanks for the color.
The next question comes from the heap mentally your line is open.
Hey, good morning, Mohit Monday from credit Suisse. Thanks.
For taking the question too.
Could you give some more details around your arrangement with <unk>.
Everyone in the axon business with it.
Most of the Chevron gas stations are owned by small retailers.
Just wanted to understand how would you kind of walk through the go to market strategy than any exclusivity on EV charges for a neutral.
Hey, Jonathan unless you do it because you were involved in it.
Yes happy to and thanks for the question I think the way to think about this to start is this is a master service agreement with Chevron right. So that's what's in the position of when those retailers want to be maybe charging we can be that first call, but there will need to be individual agreements executed with them on top of that and.
And Additionally, you should think of it as an opportunity for chevron and Texaco retailers to be either <unk> or be able to leverage <unk> extend and thats actually a pretty sizeable denominator, then obligations that could add charging either directly to rejig of ownership.
Especially we see the ones that are along the corridor is might be a really good fit for those public funding opportunities.
Got it.
The thoughts on when we could expect.
The first students that are good the regionals.
I think it's going to depend on those individual retailers and you rightfully pointed out that those are independent operators and so as a result, those are going to be some subsequent conversations underneath this master site agreement that we're working together on.
But just to add a little bit of color me. He made one of those things this chevron and the expansion of our Shanghai Chevron relationships arose in part because of those franchisees are excited about the next frontier, which is providing fueling for easy. So it's it's it's a it's not as if we need to go door knocking.
And making cold calls to these needs gas station owners across America, they're excited about it.
Got it.
That's a great point Kathy one of the things that I talked about is the fact that our cup.
Two years ago, the National Association of convenience stores and fuel Thats too we're doing a lot of information gathering.
Excited about Evs and now you can't go to any other conferences without it being mainly about the excitement about evs EV charging the importance of accessing that demographic as a huge growth in valuable.
Audience for them.
Right.
Second question just from Josh needs.
So on the ATM.
<unk> this quarter.
Just trying to understand how to think about.
The rest of the year.
Given all the things you talked about our Capex plans.
And and maybe it wasn't.
Yeah, well, here's an ACM opportunistically, we last quarter, we didn't raise that much of the trading window was quite short considering the 10-K filing happens a little later in the quarter. So.
And we obviously are limited on the use of an ATM.
It was a daily volumes, but again, we'll access it opportunistically will access any other form of financing a capsule opportunistically as well so we.
I'll I'll limit of that.
Well.
Oh got it okay.
The next question comes from Alex Gabelli Your line is open.
Yeah.
Hey, Kathy Olga Thanks for taking the question.
Appreciate it at the outset, all the commentary about utilization and throughput and some of the drivers there I'm curious just because to.
To your point, Kathy we're sort of at the very early stages, Uber offering comfort electric and I think still sort of coming out of.
The Covid era of people not doing rideshare in the first place.
Where would you say we are sort of in the in the stage of that piece of.
Of your sort of network picking up and also curious to think Augie mentioned the acceptance rate on evs driving higher revenue per dollar per charging assertion as well we're definitely seeing this the evs.
We take a lot more charge than they used to.
Curious if you can unpack sort of those two drivers a little further and where you think we are in the process of those things ramping up thanks.
Yeah on the Uber and Lyft stuff, we were absolutely in the early innings in both Uber and Lyft have committed to going all electric by 2030 and their fleets and my goodness gracious in there.
Jonathan do you happen to know what what what percentage of single single digit percentages that are even now with them. So it's it is very very early days. So the fact that we've tripled.
Year on year from this last quarter just the previous year. It's just it's a great site I mean, the Uber and Lyft drivers charge seven times more.
They need fast charging then than ER than a regular the regular retail driver. So we're really really excited about that one.
Why don't you take the second part.
Oh I'm sorry before.
The thing that I think especially anything into the fact that Uber and Lyft, both made that 2030 goal and most of that right now they are on pace to hit it by 2025 and I think you take that you just close it with the regulatory drivers, especially in California for more zero emission passenger miles traveled and it's a great opportunity even though it is early days to continue to see growth in that segment.
Yeah and on the charge rate with.
Judah front the acceptance rate would've heard the charge right. It's for everybody on the call. It's a pace with which is a car can accept kilowatt hours flowing into its battery that isn't treason, absolutely in line with our expectations. We're doing very detailed modeling looking at all the upcoming models and projections vehicle mixes.
And insulated with Alan that we're kind of trying to discern what charges will be exhibited and were definitely in line with what we were expecting and we are pretty confident that number will continue to go up with new models being introduced into the market and also newer models the comment the majority of it.
Two of vehicles driving around kind of displacing the older vehicles, which are which are much slower so very great trend and we will continue to write it at either go going forward.
Got it appreciate the color.
Just quick housekeeping I guess.
A question for me just as far as the pipeline I know that does tend to move around a little bit as far as the active development pipeline that narrowed in this quarter versus last.
I'm just curious if you can help us frame like exactly how thats defined why it's.
Narrow Dan I know, some others were asking as far as youre sort of.
Earl rate or how you look at future investment and if that's at play, but just if you can help us as far as why that moved in quarter over quarter.
Yeah, so our pipeline ever since ever seen which has hypermobility build.
Everson Everson, much Oh, which has green lighted a little bit the full green light it has high likelihood to be greenlighted by our internal hurdles is included into the pipeline. The pipeline is quite large and as you could see that three and a half thousand installs and that's on top of cells and the duration.
On the construction so all of those pullets are the stores, we need to develop over time and right now the focus is on execution and construction versus inquiries in the pipeline. We think the pipeline is very strong for the upcoming you know year or so and that's why you'll probably not see as much of a pipeline.
Versus you should expect to see more stone going operational.
Got it appreciate the color I'll take the rest offline thanks guys.
Your next question comes from Andres Sheppard Your line is open.
Hey, good morning, Kathy Good morning, Olga congratulations in the quarter into thanks for taking our question a lot of my questions have been asked maybe I wanted to touch on liquidity for a second.
So $164 million roughly in liquidity versus about $247 million in Q4 of last year.
It's about an $80 million reduction in debt and cash.
I just wanted to better understand.
Funded through the majority of 2024.
Help me connect the dots I mean are we including the opportunistic Atms throughout the year or are we including maybe funding in that assumption I'm, just trying to get a better understanding of them get.
Sure.
So Q1 burn was roughly a little over 80 million as you correctly pointed out, but I would like to emphasize that the operational burn was only 19, Neil N and the rest was most capital expenditures. So 65 million in that 65 million as I already mentioned earlier on the call on to engage question.
That's not nearly half of that is equipment repayments for the rest of 2023 equipment needs that actually sounds it sounds like a bunch of 20th so use it expands our capital expenditure number not to be the run rate for the rest of the year not to be in line with Q1, but actually to be lower.
That I think kind of what will how will help you connect the dots a little bit and on a we do not include the ACM as part of our cash plan and that is kind of cherry on the cake on top however regarding the funding.
And when we talk about the funding and there is only one of them.
There are many sources of funds and even go as access than we've been.
In a ground game for many years now and it's been accessed in munis municipal level get grants and state grants for a while we'll continue to do that specifically natty as Kathy mentioned in her remarks, we don't expect much of our inflow of never fun. This year, probably sees next year when would you expect.
A lot of other grant program influence flowing into they even go this year and also let me remind you that we have an agreement with general Motors, where for every store were putting the durations they pay roughly $33000 to us which they already have the data in both Q4 and Q1 and can continue to do.
As well so that's another cash inflow, which is available to us and it's part of our cash plan.
Got it okay. Thank you that's very helpful. So in other words the cash burn.
Should be significantly lower for the remaining of the year given that the majority of like you said was on the Capex side and.
And that accounts for the majority of this year and some into next year. So the operational cash burn, perhaps will be similar but overall cash burn should be significantly less than what it was in Q1, but if I understood that correctly correct. So and that's so let me just also clarify something so the capex is roughly.
Roughly half half on now maybe a little more than 45% equipment, 40% to 45% of equipment, 6% to 65% labor. So when I say that we pre paid most of the equipment. We haven't finished on the labor side, because when you can put stalls in the durations on those labor cost kind of will continue and we will also started doing some work in.
Q3, and Q4 and 2024 assets, so you'll definitely see some labor prepayments the rate will go down but just to clarify it's not that we won't have any cut back spending will have some it's just going to be much lower than what you saw in Q1.
Got it okay. Thanks for clarifying maybe.
Maybe my last question.
Regarding maybe I mean, it must be frustrating that we know by now the amounts but each state has allocated over the you know.
Per each year over the five years.
Is there anything that can be done to try to accelerate the process I know it doesn't obviously you rely on depend on on you but.
I mean is there anything that can be done.
In industry or individually to try to accelerate that process.
Again, given that we have the numbers, it's just a matter of the actual dates being deployed which it.
It sounds like 2024 will be the earliest.
Yeah, John I don't know Josh.
Jonathan do you want to see if there's something we spent a lot of time on this and as both John and I are former government officials in our prior lives. So we are familiar with the with the tooling and throwing but maybe what would you say.
Yeah. It's a good question Andre because I think first of all I don't want to give short shrift to the states that have moved right. There are a couple that out and we've submitted applications to a number of the states that have already opened.
Some states that moved really promptly.
But you have to keep in mind that there isn't one Navy program. There are these 50 individuals maybe corridor programs that each state gets to decide the specific parameters and the federal government was a bit delayed on finalizing their technical minimum standards as well as the buy America guidance, which meant that some states that may have otherwise been ready to go they were.
Then having to revise their plan or make other adjustments and so we're expecting more to come.
There are still some states that we think will make awards in 'twenty three but the question is whether the projects go you're on reimbursement for most of those types of programs. So the funding as Kathy said, we expect the bulk of that to be 2024 and beyond but what we can do about it is continue to engage with them both directly on a state level as well as through organizations like <unk>.
The American State Highway transportation officials organization.
That's what we and our policy team continued to do working both with the whole industry and directly to make sure that they have our best practices for connect what's in other ways to know here's a great way to run these programs as I said, we've been in the granite team for a long time, whether it's <unk>, the California grants that we announced last quarter earlier, this year, rather or the utility.
For any programs that are all important opportunities for funding all of those will continue and the timing will be a little bit of an ongoing.
Saying that we have to keep incorporating.
Got it okay. Thanks, Kathy Thanks, Holger, thanks, Jonathan Congrats on the quarter again I'll pass it on thank you.
Thanks Aldo.
And our final question will come from breakfast Toni Your line is open.
Alright, thanks for.
Taking my question.
Just curious on an update on the EV go renew program and sort of upgrading those.
Boulder 50 kilowatt Chargers kind of where are we at in that.
That process.
Yeah right. So we've got a we've got the program is underway and we're gonna be we're going to be upgrading hundreds of them over the course of the year on in the program is on track and what we're what we're doing as as well as we're actually integrating some communications efforts in the E. V go renew so that so the what we've what we've discussed.
Is that sometimes the Chargers are I felt that sometimes there is an opportunity for driver education on how to actually make the charging what work more effectively. So the program is becoming all encompassing as I think I described last time and it's it's it's on track it's on track.
We've got a few hundreds of them are going to get it over the course of the year.
Yeah, and I would like to add that as of the end of the first quarter as a result of the new efforts and as a result of us continuing to deploy high power charges those fleets as well.
For the first time, well less than half of all in that book. So we could already to clearly see the numbers as well that the efforts bear fruit.
Okay, and then any color on just in terms of Capex for this year associated with that program.
Just just kind of ballpark.
We do not give guidance on that number but it should be higher.
Higher.
Quite a bit higher than than what we reported last year for that.
Okay.
Thank you.
Okay.
At this time I will turn the call back over to Kathy has always CEO for closing remarks.
Well thanks, everyone look E V go had a great first quarter of 2023, our strategy is showing the early proof points that it's working with throughput growing massively and it's exceeding idiot <unk> growth and our own soccer.
The outlook for you to go and the opportunity for fast charging in the U S is getting better and faster. We believe our business is on a trajectory to scale rapidly and deliver really nice returns and we look forward to speaking with you again next quarter about the progress thanks, everyone.
Yeah.
This concludes today's conference call you may now disconnect.
Yeah.
Yeah.
Yeah.