Electric vehicle surges as gas prices spike
U.S. drivers seem to be giving electric vehicles another thought as gas prices put them off internal combustion engines ICE for the time being.
The national gas price average has hit a new record high for the third day in a row. According to AAA, the average price for a gallon of gas was $4.41 as of Thursday. It's no wonder that Google's search interest for electric vehicles and where to find them has surged.
The appetite is well and truly surging because of gas prices, but also because there are so many new offerings, EVgo EVGO CEO Cathy Zoi told Yahoo Finance Live in the next 24 months that there are 50 different models of EVs coming to market. You have the choice with EVs, and they are coming from many manufacturers, no matter whether you want to drive an SUV or a pickup truck or a compact car. Over the past year, legacy manufacturers and new startups have been announcing and rolling out new models at every price point.
The Tesla TSLA, the leader in the US in EV market share, reported another quarter of record vehicle deliveries. As they pivot to the electric market, major ICE players like Ford F and General Motors GM are finding huge demand. Ford has stopped accepting orders for its new F-150 Lightning pickup truck. All signs point to 'go' for EV makers and the electric infrastructure providers that support them.
EVgo, a fast-charging developer founded in 2010, has been adding new stations across the country to capitalize on this once-in-a-century transformation of a major sector, Zoi said.
Over the next several years, we expect to deploy 10,000 fast chargers. She said that we are now at about 1,700, 1,800 fast chargers. It is a wonderful, interesting, and accelerating part of the growth curve for us. The company has always chosen to invest in markets where the adoption of electric cars was highest, primarily in California. According to the company, 80% of Californians live within a 10 mile radius of an EVgo charger.
EVgo is looking to expand its reach, especially now that automakers and the Biden administration are doubling down on the electrification of the auto sector.
Zoi said that we only invest where we can achieve a double-digit return. We have got car companies who are excited to sell the vehicles everywhere, so we are building everywhere. In its latest quarter, the company noted that it was focusing its growth in Michigan, Florida, North Carolina and Indiana. Many of its charging stations will be built in existing retail locations in partnership with companies like Chase, Meijer, Whole Foods, and WaWa.
The expansion in the Midwest isn't surprising, given the proximity to the new EV plants General Motors is building in Michigan and the battery plants that Ford is building in Kentucky and Tennessee.
This comes after the Biden administration released a $5 billion plan to boost EVs and get more chargers into remote areas, where private investment may be more hesitant to venture. In any case, there is a concerted push by industry and government to achieve Biden's goal of making EVs account for half of all vehicle sales by 2030 as part of a broader goal to reduce carbon emissions.
What we try to do is kind of the Wayne Gretzky thing, Zoi said, referring to the hockey legend's quip that he skates to where the puck is going, not where it has been.
She said that we try to build infrastructure ahead of demand, and demand is growing in much of America, but it is low. Federal funding can help companies such as EVgo to build ahead of when there are enough EVs on the road, particularly in rural areas and corridors.