EVGO US Equity☆

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of EVgo’s consolidated results of operations and financial condition. The discussion should be read in conjunction with EVgo’s consolidated financial statements and related notes thereto as of and for the years ended December 31, 2022 and 2021, included elsewhere in this Annual Report. In addition to historical information, this discussion contains forward-looking statements that involve numerous risks, uncertainties and assumptions that could cause EVgo’s actual results to differ materially from management’s expectations due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in this Annual Report.

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Overview

EVgo is a key leader in charging solutions, building and operating the infrastructure and tools to expedite the mass adoption of EVs for individual drivers, rideshare and commercial fleets and businesses. Since its founding in 2010, EVgo has led the way to a cleaner transportation future and its network has been powered by 100% renewable energy since 2019 through the purchase of RECs.

EVgo has a flexible business model that derives value through multiple revenue streams. The foundation of the Company’s business is the development and operation of EV charging sites through which it dispenses electricity to EVs driven by individuals, commercial drivers and fleet operators. EVgo’s principal revenue stream is from the provision of charging services for EVs of all types on EVgo’s network. In addition, a variety of business-to-business commercial relationships provide EVgo with revenue or cash payments based on commitments to build new infrastructure, provide guaranteed access to charging and offer marketing, data and software-driven services. EVgo also earns revenue from the sale of regulatory credits generated through sales of electricity and its operation and ownership of its DCFC network. EVgo believes this combination of revenue streams can drive long-term margin expansion and customer retention.

Specifically, revenue is earned through the following streams:

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In addition to offering access to its public network, EVgo offers dedicated charging solutions to fleets. As part of this offering, EVgo typically builds, owns and operates charging infrastructure for the exclusive use of a dedicated customer and is currently offering flexible ownership models, such as its ChaaS offering. EVgo’s dedicated and ChaaS offerings provide a value proposition for fleets who might otherwise feel compelled to procure, install and manage their own EVSE. EVgo offers a variety of pricing models for its dedicated charging solutions, including a mix of volumetric commitments and variable and fixed payments to EVgo for provision of its services. ChaaS and dedicated charging allow for tailored fleet charging solutions without requiring fleets to directly incur capital expenditures or operating and management costs related to charging EVs. Together, EVgo’s dedicated charging solutions and public fleet charging services provide fleets with a more robust and flexible charging solution.

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Recent Developments

Geopolitical and Macroeconomic Environment

During the last several years, the global economy has experienced disruption and sustained volatility due to a number of factors. In particular, the global outbreak of COVID-19 resulted in significant volatility in the global and domestic economies, changes in consumer and business behavior, market downturns and restrictions on business and individual activities, resulting in overall reduced economic activity.

The COVID-19 pandemic impacted EVgo’s operations through reduced network throughput, construction delays and supply chain and shipping constraints. EVgo also experienced delays in its Site Host negotiations as Site Hosts devoted more time to day-to-day operations and employee health and safety. Finally, for some contractual commitments, EVgo is required to adhere to a construction schedule over specified timeframes. Those timelines were impacted due to delays associated with COVID-19 and broader supply chain disruptions and it is possible that the pandemic and its ongoing effects could continue to impact these timelines in the future.

More recently, Russia’s military invasion of Ukraine and the subsequent sanctions imposed on Russia, Belarus, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic have led to and will likely continue to lead to, geopolitical instability, market uncertainty and supply disruptions. Additionally, rising inflation has increased operating costs for many businesses and, together with slowing economic growth and fear of a recession, has led governments to change monetary policy in response. Finally, recent concerns regarding the stability of the U.S. and international financial systems has raised concerns regarding the ability of companies to access deposits; potential losses of uninsured deposits and other financial assets; the potential loss of access to working capital sources and access to favorable commercial financing terms (including terms related to interest rates and restrictive financial or operating covenants); and systemic limitations on access to credit and liquidity sources.

The current economic environment remains uncertain and the extent to which EVgo’s operating and financial results for future periods will be impacted by the ongoing impacts of the COVID-19 pandemic, the ongoing conflict in Ukraine, increasing inflation, instability in the financial services sector, supply-chain disruptions, government efforts to reduce inflation and any recession will largely depend on future developments, which are highly uncertain and cannot be reasonably estimated at this time.

Government EV Initiatives

In order to encourage the use of EVs, the U.S. federal government and some state and local governments provide incentives to end users and purchasers of EVs and EV charging stations in the form of rebates, tax credits and other financial incentives that promote EV adoption and related EV charging infrastructure. EVgo believes the increase in promotion of EVs and the installation of related EV charging infrastructure will continue in part due to the ongoing implementation of the Infrastructure Investment and Jobs Act (the “Bipartisan Infrastructure Law”) and the recently enacted Inflation Reduction Act of 2022 (the “Inflation Reduction Act”), which included extensions, expansions and revisions of various tax credits relating to EVs and EV charging infrastructure and may provide more flexibility and options in monetizing such credits. In particular, the Inflation Reduction Act (i) expanded and extended tax credits for EV charging infrastructure and new EVs while also imposing new limitations and requirements for such credits, (ii) introduced tax credits for used EVs and commercial EVs and (iii) introduced the concept of transferability for certain tax credits, providing an additional option to monetize such credits. However, the impact of the Inflation Reduction Act cannot be known with any certainty, and EVgo may not reap any or all of the expected benefits of the Inflation Reduction Act. States including (but not limited to) California, Colorado, Delaware, Massachusetts, New Jersey and New York also offer various rebates, grants and tax credits to incentivize both EV and EVSE purchases.

Issuance of Common Stock

On November 10, 2022, EVgo entered into a Distribution Agreement with J.P. Morgan Securities LLC, Evercore Group L.L.C. and Goldman Sachs & Co. LLC as sales agents, pursuant to which the Company may sell up to $200 million of shares of Class A common stock in “at the market” transactions at prevailing market prices (the “ATM Program”).

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During the fourth quarter of 2022, EVgo sold 1,588,340 shares of Class A common stock pursuant to the ATM Program, with aggregate gross proceeds of $10.7 million. After deducting commissions of $0.3 million, the Company received net proceeds of approximately $10.4 million.

Granting of EVgo’s 205 Petition

On February 3, 2023, EVgo filed a petition in the Court of Chancery under Section 205 of the Delaware General Corporation Law seeking (i) the validation of the stockholder vote approving CRIS’s certificate of incorporation in connection with the CRIS Business Combination and (ii) the validation and declaration of effectiveness of (a) EVgo’s Charter (including its filing and effectiveness, in each case as of July 1, 2021) and (b) the securities issued or to be issued in reliance on such approval and/or the validity of EVgo’s Charter, as of the respective dates of their issuance (including the 5,750,000 shares of Class A common stock into which the shares of Class B common stock converted upon the consummation of the CRIS Business Combination). EVgo filed the petition due in part to a recent ruling of the Court of Chancery that created uncertainty as to the validity and effectiveness of these corporate acts and, consequently, as to its capital structure.

Such purported uncertainty was eliminated on February 21, 2023, when, following a hearing EVgo’s petition, the Court of Chancery issued an order validating each of the corporate acts described above, effective as of the time each such act was originally taken, notwithstanding any failures of authorization or potential failures of authorization described in, or resulting from the matters described in, the petition.

Key Components of Results of Operations

Revenue

EVgo’s revenue is generated across various business lines. The majority of EVgo’s revenue is generated from the sale of charging services, which are comprised of retail, OEM and commercial business lines, and its eXtend offering. In addition, EVgo generates ancillary revenue through the sale of data services and consumer retail services. EVgo also offers network services to OEM customers, including memberships and marketing. Finally, as a result of owning and operating the EV charging stations, EVgo earns regulatory credits such as LCFS credits, which are sold to generate additional revenue.

Revenue From Related Party

Revenue from related party is for data reporting services provided to an entity related to a former Board member and to various agreements with an affiliate of LS Power for the purchase and sale of LCFS credits at prevailing market prices.

Cost of Sales

Cost of Revenue. Cost of revenue consists primarily of energy usage fees, site operating and maintenance expenses, warranty and repair services and site lease and rent expense associated with charging equipment. EVgo is facing a challenging utility pricing environment where energy usage fees are increasing particularly in the summer months. It is anticipated that this may lead to a margin decrease, as the Company may not be able to fully pass on these energy cost increases to its customers through increases to charging session pricing.

Depreciation, Net of Capital-Build Amortization. Depreciation, net of capital-build amortization, consists of depreciation related to EVgo’s property and equipment associated with charging equipment and installation and is partially offset by the amortization of EVgo’s capital-build liabilities associated with third-party funding received for charging stations and other programs.

Gross Profit (Loss) and Gross Margin

Gross profit (loss) consists of EVgo’s revenue less its cost of revenue and depreciation, net of capital-build amortization. Gross margin is gross profit (loss) as a percentage of revenue.

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Operating Expenses

General and Administrative Expenses. General and administrative expenses primarily consist of payroll and related personnel expenses, IT and office services, customer service and network charges, office rent expense and professional services. EVgo expects its general and administrative expenses to increase in absolute dollars as it continues to grow its business. EVgo also expects to continue to incur additional expenses related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, general insurance and directors’ and officers’ insurance, investor relations and other professional services.

Depreciation, Amortization and Accretion. Depreciation, amortization and accretion consists of depreciation related to EVgo’s property, equipment and software not associated with charging equipment and, therefore, not included in the depreciation, net of capital-build amortization expenses recorded in cost of sales. This also includes amortization of EVgo’s intangible assets and accretion related to EVgo’s asset retirement obligations.

Operating Profit (Loss) and Operating Margin

Operating profit (loss) consists of EVgo’s gross profit or loss less general and administrative expenses and depreciation, amortization and accretion in operating expenses. Operating margin is operating profit (loss) as a percentage of revenue.

Interest Expense, Related Party

Interest expense, related party consists primarily of interest due under the Secured Demand Grid Promissory Note, dated January 16, 2020, by and between EVgo Services and EVgo Holdings (the “LS Power Note”). Pursuant to the terms of the Business Combination Agreement, the LS Power Note was cancelled immediately prior to the CRIS Close Date and converted into equity of EVgo Services, immediately followed by a contribution of such equity interest by EVgo Holdings to EVgo Holdco.

Interest Income

Interest income consists primarily of interest earned on cash, cash equivalents and debt securities.

Other (Expense) Income, Net

Other (expense) income, net, consists primarily of unrealized gains and losses on marketable securities.

Change in Fair Values of Warrant and Earnout Liabilities

The change in the fair values of the warrant and earnout liabilities reflects the mark-to-market adjustments associated with warrants to purchase shares of the Company’s common stock and earnout liabilities for each reporting period.

Income Taxes

EVgo’s provision for income taxes consists primarily of income taxes related to federal and state jurisdictions where business is conducted related to the Company’s ownership in EVgo OpCo. For the years ended December 31, 2022 and 2021, EVgo’s provision for income taxes and effective tax rates were deemed to be de minimis. As of December 31, 2022 and 2021, EVgo maintained a full valuation allowance on EVgo’s net deferred tax assets. There were no unrecognized tax benefits for uncertain tax positions, nor any significant amounts accrued for interest and penalties as of December 31, 2022 and 2021.

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Net Earnings (Loss) Attributable to Redeemable Noncontrolling Interest

Net earnings (loss) attributable to redeemable noncontrolling interest represents the share of net earnings or loss that is attributable to the holder of EVgo’s Class B common stock.

Key Performance Indicators

EVgo management uses several performance metrics to manage the business and evaluate financial and operating performance. EVgo considers the following indicators to be of critical importance:

Network Throughput

Network throughput represents the total amount of GWh that was consumed by EVs using chargers and charging stations on EVgo’s network. EVgo typically monitors GWh sales by three components: business line, customer and customer class. EVgo believes monitoring of component trends and contributions is the appropriate way to monitor and measure business-related health.

Number of DC Stalls on EVgo’s Network

Number of DC stalls represents the total number of DC stalls that EVgo has operational on its network (energized, inspected and commissioned). One stall can charge one vehicle at a time. There are certain configurations of EVgo sites where one DC charger is capable of charging only one vehicle at a time; all chargers at such a site are counted as one stall per one charger. There are certain configurations of EVgo sites where one DC charger is capable of charging two vehicles simultaneously; all chargers at such a site are counted as two stalls per one charger.

Receipts

EVgo defines Receipts as total revenue plus change in deferred revenue over the same period. Pursuant to the term of certain OEM contracts, EVgo is paid well in advance of when revenue can be recognized according to ASC Topic 606; usually, the payment is tied to the number of stalls that commence operations under the applicable contract arrangement. EVgo believes that its Receipts metric provide investors valuable insight into cash that has been generated from EVgo’s customers and EVgo’s periodic performance. EVgo uses Receipts to monitor and measure EVgo’s commercial performance, liquidity and growth as EVgo’s OEM customers pay EVgo in advance for placing stalls in operation and then EVgo recognizes a portion of the related revenue over time.

The following table represents network throughput and the number of DC stalls on EVgo’s network:

​ ​ ​ ​ ​

​ ​ December 31, ​ December 31,

Network throughput (GWh) for the year ended 44.6 26.4

Number of DC stalls on EVgo network as of 2,184 ​ 1,676

The following table presents the calculation of Receipts for the years ended December 31, 2022 and 2021:

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​ Years Ended

​ December 31,

Year-over-year percentage change in total Receipts 53% ​ ​

1 As presented in the consolidated statements of operations.

2 As presented in the consolidated statements of cash flows. Change in deferred revenue for the year ended December 31, 2021 includes the first payment received in March 2021 of $20.0 million under one of EVgo’s OEM agreements.

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Factors Affecting EVgo’s Operating Results

EVgo believes its performance and future success depend on a number of factors, including those discussed below and in “Part I, Item 1A., Risk Factors.”

EV Sales

EVgo’s revenue growth is directly tied to the adoption and continued acceptance and usage of passenger and commercial EVs, which it believes drives the demand for electricity, charging infrastructure and charging services. The market for EVs is still rapidly evolving and, although demand for EVs has grown in recent years, there is no guarantee of such future demand. Additionally, as demand increases, the supply must keep pace for adoption to continue to accelerate at a rapid pace. Factors impacting the adoption of EVs include perceptions about EV features, quality, safety, performance and cost; perceptions about the limited range over which EVs may be driven on a single battery charge; availability of services for EVs; consumers’ perception about the convenience, speed, reliability and cost of EV charging; volatility in the price of gasoline and diesel; EV supply chain shortages and disruptions including, but not limited to, availability of certain components (e.g., semiconductors and critical raw materials necessary for the production of EVs and EV batteries), the ability of EV OEMs to ramp-up EV production and/or allocate sufficient quantities of EV models to the U.S. market; domestic content requirements or other policy constraints; availability of batteries and battery materials; availability, cost and desirability of other alternative fuel vehicles, including plug-in hybrid EVs and high fuel-economy gasoline and diesel-powered vehicles; and increases in fuel efficiency. In addition, macroeconomic factors could impact demand for EVs, particularly since the sales price of EVs can be more expensive than traditional gasoline-powered vehicles. If the market for EVs does not develop as expected or if there is any slowdown or delay in overall adoption of EVs, EVgo’s operating results may be adversely affected.

Electrification of Fleets

EVgo faces competition in the emerging fleet electrification segment, including from certain fleet customers who may opt to install and own charging equipment on their property; however, EVgo believes its unique set of offerings to fleets and its existing charging network position EVgo advantageously to win business from fleets. Fleet owners are generally more sensitive to the total cost of ownership of a vehicle than private-vehicle owners. As such, electrification of vehicle fleets may occur more slowly or more rapidly than management forecasts based on the cost to purchase, operate and maintain EVs and the general availability of such vehicles relative to those of ICE vehicles. The ability of EVgo and its competitors’ to offer competitive charging services and value-added ancillary services may impact the pace at which fleets electrify and may impact EVgo’s ability to capture market share in fleets. Additionally, federal, state and local government support and regulations directed at fleets (or lack thereof) may accelerate or delay fleet electrification and increase or reduce EVgo’s business opportunity. EVgo’s management is currently monitoring several key rules that may encourage fleet electrification, including California’s ACT rule and similar programs recently adopted by Massachusetts, New Jersey, New York, Oregon and Washington and the implementation of California’s Clean Miles Standard, as well as similar proposals in other zero emission vehicle states and potential action at the federal level.

Competition

The EV charging industry is increasingly competitive. The principal competitive factors in the industry include charger count, locations, accessibility and reliability; charger connectivity to EVs and ability to charge all standards; speed of charging relative to expected vehicle dwell times at the location; DCFC network reliability, scale and local density; software-enabled service offerings and overall customer experience; operator brand, track record and reputation; and access to equipment vendors and service providers; policy incentives; and pricing. Existing competitors may expand their product offerings and sales strategies, new competitors may enter the market and certain fleet customers may choose to install and operate their own charging infrastructure. If EVgo’s market share decreases due to increased competition, its revenue and ability to generate profits in the future may be impacted.

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Government Mandates, Incentives and Programs

The U.S. federal government and some state and local governments provide incentives to end-users and purchasers of EVs and EV charging stations in the form of rebates, tax credits and other financial incentives, such as payments for regulatory credits. The EV market relies on these governmental rebates, tax credits and other financial incentives to significantly lower the effective price of EVs and EV charging stations. However, these incentives may expire on a particular date, end when the allocated funding is exhausted, or may be reduced or terminated as a matter of regulatory or legislative policy. In particular, EVgo has historically benefitted from the availability of federal tax credits under Section 30C of the Code, which effectively subsidizes the cost of placing in service EVgo’s charging stations. The Inflation Reduction Act revised the credit under Section 30C to extend the credit until December 31, 2032, introduce the concept of transferability of such tax credits, expand the credit such that it is capped at $100,000 per item and increase eligibility requirements to require installation of EV charging stations in certain census tracts along with meeting prevailing wage and apprenticeship requirements, among other changes. See Part I, Item 1A, “Risk Factors —The EV market currently benefits from the availability of rebates, tax credits and other financial incentives from governments, utilities and others to offset the purchase or operating cost of EVs and EV charging stations. The reduction, modification or elimination of such benefits could adversely affect EVgo’s financial results.” for further discussion. There can be no assurance that the EV charging stations placed in service by EVgo will meet the revised requirements for the Section 30C credits, and compliance with such requirements could increase EVgo’s labor and other costs.

Any reduction in rebates, tax credits or other financial incentives available to buyers or owners of EVs or EV charging stations could negatively affect the EV market and adversely impact EVgo’s business operations and expansion potential. In addition, there can be no assurance that EVgo will have the necessary tax attributes to utilize any such credits that are available and may not be able to monetize such credits on favorable terms. Further, certain features of EVgo OpCo’s ownership may limit the available tax credit that can be monetized or utilized. New tariffs and policies that could incentivize overbuilding of infrastructure may also have a negative impact on the economics of EVgo’s stations. Furthermore, new tariffs and policy incentives could be put in place that favor equipment manufactured by or assembled at American factories, which may put EVgo’s fast charging equipment vendors at a competitive disadvantage, including by increasing the cost or delaying the availability of charging equipment, by challenging or eliminating EVgo’s ability to apply or qualify for grants and other government incentives, or by disqualifying the Company from the ability to compete for certain charging infrastructure build-out solicitations and programs, including those initiated by federal government agencies.

Moreover, a variety of incentives and rebates offered by the U.S. federal government as well as state and local governments in order to encourage the use of EVs may be limited or reduced. In particular, the U.S. federal government offers a tax credit, the maximum amount of which is $7,500, for qualified new plug-in EVs. The Inflation Reduction Act modified the tax credit for new plug-in EVs and added new tax credits for used and commercial EVs. The Inflation Reduction Act removed the phase-out of tax credits for new plug-in EVs with respect to vehicle manufacturers that reached certain production levels beginning in 2023. However, the tax credit is subject to additional requirements and limitations, such as certain adjusted gross income limits for consumers claiming the credit, domestic content requirements for critical minerals and batteries and a requirement for final assembly to occur in North America. Such additional requirements and limitations for such tax credits may reduce incentives available to encourage the adoption of EVs, which could negatively affect the EV market and adversely impact EVgo’s business operations and expansion potential.

Technology Risks

EVgo relies on numerous internally developed and externally sourced hardware and software technologies to operate its network and generate earnings. EVgo engages a variety of third-party vendors for non-proprietary hardware and software components. The ability of EVgo to continue to integrate its technology stack with technological advances in the wider EV ecosystem including EV model characteristics, charging standards, charging hardware, software and battery chemistries and value-added customer services will determine EVgo’s sustained competitiveness in offering charging services. There is a risk that some or all of the components of the EV technology ecosystem become obsolete and that EVgo will be required to make significant investments to continue to effectively operate its business. EVgo’s management believes EVgo’s business model is well-positioned to enable EVgo to remain technology-, vendor- and OEM-agnostic

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over time and allow the business to remain competitive regardless of long-term technological shifts in EVs, batteries or modes of charging.

Sales of Regulatory Credits

EVgo derives revenue from selling regulatory credits earned for participating in LCFS programs, or other similar carbon or emissions trading schemes, in various jurisdictions in the U.S. EVgo currently sells these credits at market prices. These credits are exposed to various market and supply and demand dynamics which can drive price volatility and which are difficult to predict. Price fluctuations in credits may have a material effect on future results of operations. The availability of such credits depends on continued governmental support for these programs. If these programs are modified, reduced or eliminated, EVgo’s ability to generate this revenue in the future would be adversely impacted. In addition to current programs, EVgo’s management is currently monitoring the implementation of Washington’s program and additional proposals in varying stages of discussions including in New York, along with potential changes to the Renewable Fuels Standard.

Results of Operations

Year Ended December 31, 2022 Compared with Year Ended December 31, 2021

The table below presents EVgo’s results of operations for the years ended December 31, 2022 and 2021:

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​ Years Ended December 31, ​ Change

Revenue from related party ​ 75 ​ 562 ​ ​ ​ (487) ​ (87) %

Interest expense ​ ​ (21) ​ ​ — ​ ​ ​ (21) ​ * ​

Interest expense, related party ​ ​ — ​ (1,926) ​ ​ ​ 1,926 ​ 100 %

Change in fair value of earnout liability ​ ​ 3,481 ​ ​ 2,214 ​ ​ ​ 1,267 ​ 57 %

Income tax expense ​ ​ (18) ​ ​ — ​ ​ ​ (18) ​ * ​

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Gross margin ​ (10.4) % ​ (30.7) % ​ ​ ​ ​ ​ ​

Operating margin ​ (273.9) % ​ (404.4) % ​ ​ ​ ​

Network throughput (GWh) ​ 44.6 ​ ​ 26.4 ​ ​ ​ ​

Number of DC stalls ​ 2,184 ​ ​ 1,676 ​ ​ ​ ​

*Percentage greater than 999% or not meaningful

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The table below presents EVgo’s revenue for the years ended December 31, 2022 and 2021:

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Years Ended December 31, Change

*Percentage greater than 999% or not meaningful

1 Therewere no amounts earned from related parties for the year ended December 31, 2022. The amount for the year ended December 31, 2021 includes $0.6 million of revenue earned from related parties.

2 Amount for the year ended December 31, 2022 includes $0.1 million of revenue earned from a related party and there was no related party revenue for the year ended December 31, 2021.

Total revenue for the year ended December 31, 2022 increased $32.4 million, or 146%, to $54.6 million compared to $22.2 million for the year ended December 31, 2021. As further discussed below, the increase in revenue during 2022 was primarily due to a $17.7 million increase in eXtend revenue, a $7.9 million increase in retail charging revenue, a $2.6 million increase in regulatory credit sales, and a $2.2 million increase in ancillary revenue.

Charging Revenue Retail. Charging revenue, retail, for the year ended December 31, 2022 increased $7.9 million, or 71%, to $18.9 million compared to $11.0 million for the year ended December 31, 2021. Year-over-year growth was due to an overall increase in charging volume and subscription fees driven primarily by a growing number of customers and higher utilization, as well as the recovery from COVID-19.

Charging Revenue, Commercial. Charging revenue, commercial, increased $0.9 million, or 39%, to $3.4 million for the year ended December 31, 2022. The increase was attributable to new public commercial contracts that became effective during 2021 and increased charging volume by EVgo’s public commercial customers partially offset by a decrease due to the expiration of a dedicated commercial contract.

Charging Revenue, OEM. Charging revenue, OEM, for the year ended December 31, 2022 increased $0.1 million, or 16%, to $0.9 million compared to $0.8 million for the year ended December 31, 2021. The increase was primarily due to increased usage from OEM customers as well as implementation of new charging programs.

Regulatory Credit Sales. Regulatory credit sales for the year ended December 31, 2022 increased $2.6 million, or 87%, to $5.7 million compared to $3.0 million for the year ended December 31, 2021. The increase was primarily due to increased throughput resulting in additional credit generation and sales and a shift in the timing of when credits were sold during the first half of 2022, which was partially offset by decreases in credit rates from 2021 to 2022.

Network Revenue, OEM. Network revenue, OEM, for the year ended December 31, 2022 increased $0.9 million, or 62%, to $2.5 million compared to $1.5 million for the year ended December 31, 2021 primarily due to increased revenue under an OEM agreement related to marketing activities, membership fees and the breakage of prepaid charging credits that expired unused.

eXtendRevenue. eXtend revenue for the year ended December 31, 2022 increased $17.7 million to $18.4 million compared to $0.8 million for the year ended December 31, 2021 primarily as a result of the new agreement that was executed in 2022 with the Pilot Company.

Ancillary Revenue. Ancillary revenue for the year ended December 31, 2022 increased by $2.2 million, or 85%, to $4.8 million compared to $2.6 million for the year ended December 31, 2021. The increase was primarily due to a $2.1 million increase in PlugShare revenue.

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Cost of Sales

Cost of Revenue. Cost of revenue for the year ended December 31, 2022 increased $24.4 million, or 143%, to $41.5 million compared to $17.1 million for the year ended December 31, 2021. The increase in cost of revenue was due to an increase of $10.4 million in equipment costs related to equipment sold to eXtend and fleet clients, an increase of $5.4 million in non-energy costs related to increased stall count, a $5.1 million increase in energy and other variable costs due to increased throughput, and a $2.8 million increase in engineering and construction costs incurred for eXtend.

Depreciation, Net of Capital-Build Amortization. Depreciation, net of capital-build amortization, for the year ended December 31, 2022 increased $6.8 million, or 57%, to $18.8 million compared to $12.0 million for the year ended December 31, 2021 due to the increase in stall count.

Gross Loss and Gross Margin

Gross loss for the year ended December 31, 2022 improved $1.2 million, or 17%, to $5.7 million compared to $6.8 million for the year ended December 31, 2021. Gross margin for the year ended December 31, 2022 improved to negative 10.4% compared to negative 30.7% for the year ended December 31, 2021 due to higher margins on equipment revenue and improved leverage of fixed network operating costs.

Operating Expenses

General and Administrative Expenses. General and administrative expenses for the year ended December 31, 2022 increased $55.6 million, or 78%, to $126.7 million compared to $71.1 million for the year ended December 31, 2021. The increase was primarily due to a $35.1 million increase in payroll expenses driven by higher headcount and higher share-based compensation, a $5.9 million increase in loss on abandoned projects, a $5.1 million increase in professional services and legal fees, a $4.8 million increase in software expenses and a $2.2 million increase in insurance expenses.

Depreciation, Amortization and Accretion. Depreciation, amortization and accretion expenses for the year ended December 31, 2022 increased $5.2 million, or 44%, to $17.1 million compared to $11.9 million for the year ended December 31, 2021. The increase was primarily due to $3.1 million in increased amortization of developed software, $1.6 million in increased amortization of intangibles from EVgo’s acquisition of PlugShare in 2021, and $0.3 million in increased accretion expense primarily due to additional stalls that went operational during 2022.

Operating Loss and Operating Margin

During the year ended December 31, 2022, EVgo generated an operating loss of $149.5 million, an increase of $59.7 million, or 66%, compared to $89.8 million for the year ended December 31, 2021. Operating margin for the year ended December 31, 2022 improved to negative 273.9% compared to negative 404.4% for the year ended December 31, 2021.

Interest Expense

For year ended December 31, 2022, interest expense was de minimis. There was no interest expense for the year ended December 31, 2021.

Interest Expense, Related Party

There was no interest expense, related party, for the year ended December 31, 2022, compared to $1.9 million for the year ended December 31, 2021. The 2021 related party interest expense was related to the LS Power Note, which was cancelled immediately prior to the CRIS Close Date.

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Interest Income

Interest income for the year ended December 31, 2022 was $4.5 million. Interest income for the year ended December 31, 2021 was de minimis. The increase was a result of the interest earned on cash and cash equivalents and debt securities held by the Company during the year ended December 31, 2022.

Other (Expense) Income, Net

Other expense, net, for the year ended December 31, 2022 was $0.8 million compared to other income, net, of $0.6 million for the year ended December 31, 2021. The change was primarily due to realized and unrealized losses on investments and marketable securities.

Changes in Fair Values of Earnout and Warrant Liabilities

The changes in fair values of earnout and warrant liabilities for the year ended December 31, 2022 were gains of $3.5 million and $36.2 million, respectively, compared to gains of $2.2 million and $31.1 million, respectively, for the year ended December 31, 2021. The increase in gain from the change in fair values of earnout and warrant liabilities of $1.3 million and $5.1 million, respectively, was due to a larger decrease in the liabilities from the prior year. See “Part II, Item 8. Consolidated Financial Statements and Supplementary Data – Note 15 – Fair Value Measurements” for more information.

Net Loss

Net loss for the year ended December 31, 2022 was $106.2 million compared to $57.8 million for the year ended December 31, 2021. The increased loss was primarily due to increased general and administrative expenses incurred to support growth and increased depreciation, amortization and accretion expenses from the expansion of our charging network, which were partially offset by the higher gain from the changes in fair values of the earnout and warrant liabilities and increased interest income earned during the year.

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Non-GAAP Financial Measures

This Annual Report includes the following non-GAAP financial measures, in each case as defined below: “Adjusted Cost of Sales,” “Adjusted Cost of Sales as a Percentage of Revenue,” “Adjusted Gross Profit (Loss),” “Adjusted Gross Margin,” “Adjusted General and Administrative Expenses,” “Adjusted General and Administrative Expenses as a Percentage of Revenue,” “EBITDA,” “EBITDA Margin,” “Adjusted EBITDA” and “Adjusted EBITDA Margin.” EVgo believes these measures are useful to investors in evaluating EVgo’s performance. In addition, EVgo management uses these measures internally to establish forecasts, budgets and operational goals to manage and monitor its business. EVgo believes that these measures help to depict a more meaningful representation of the performance of the underlying business, enabling EVgo to evaluate and plan more effectively for the future.

Adjusted Cost of Sales, Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit (Loss), Adjusted Gross Margin, Adjusted General and Administrative Expenses, Adjusted General and Administrative Expenses as a Percentage of Revenue, EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. These measures should not be considered as measures of financial performance under GAAP and the items excluded from or included in these metrics are significant components in understanding and assessing EVgo’s financial performance. These metrics should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP.

EVgo defines Adjusted Cost of Sales as cost of sales before (i) depreciation, net of capital-build amortization, and (ii) share-based compensation. EVgo defines Adjusted Cost of Sales as a Percentage of Revenue as Adjusted Cost of Sales as a percentage of revenue. EVgo defines Adjusted Gross Profit (Loss) as revenue less Adjusted Cost of Sales. EVgo defines Adjusted Gross Margin as Adjusted Gross Profit (Loss) as a percentage of revenue. EVgo defines Adjusted General and Administrative Expenses as general and administrative expenses before (i) share-based compensation, (ii) loss on disposal of property and equipment, net of recoveries, and impairment expense, (iii) bad debt (recovery) expense, and (iv) certain other items that management believes are not indicative of EVgo’s ongoing performance. EVgo defines Adjusted General and Administrative Expenses as a Percentage of Revenue as Adjusted General and Administrative Expenses as a percentage of revenue. EVgo defines EBITDA as net income (loss) before (i) depreciation, net of capital-build amortization, (ii) amortization, (iii) accretion, (iv) interest income, (v) interest expense, (vi) interest expense, related party, and (vii) income taxes. EVgo defines EBITDA Margin as EBITDA as a percentage of revenue. EVgo defines Adjusted EBITDA as EBITDA plus (i) share-based compensation, (ii) loss on disposal of property and equipment, net of recoveries, and impairment expense, (iii) loss (gain) on investments, (iv) bad debt (recovery) expense, (v) change in fair value of earnout liability, (vi) change in fair value of warrant liability, and (vii) certain other items that management believes are not indicative of EVgo’s ongoing performance. EVgo defines Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue.

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The following unaudited table presents a reconciliation of Adjusted Cost of Sales, Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit (Loss) and Adjusted Gross Margin to the most directly comparable GAAP measures, in each case, for the years ended December 31, 2022 and 2021:

​ ​ ​ ​ ​ ​

​ Years Ended

​ December 31,

GAAP cost of sales as a percentage of revenue ​ 110.4% ​ ​ 130.7%

GAAP gross margin ​ (10.4%) ​ ​ (30.7%)

​ ​ ​ ​ ​ ​

GAAP cost of sales adjustments: ​ ​ ​ ​ ​

Depreciation, net of capital-build amortization $ 18,779 ​ $ 11,986

Share-based compensation ​ 118 ​ ​ 33

Adjusted Cost of Sales as a Percentage of Revenue1 ​ 75.7% ​ ​ 76.6%

Adjusted Gross Margin1 ​ 24.3% ​ ​ 23.4%

The following unaudited table presents a reconciliation of Adjusted General and Administrative Expenses and Adjusted General and Administrative Expenses as a Percentage of Revenue to the most directly comparable GAAP measures for the years ended December 31, 2022 and 2021:

​ ​ ​ ​ ​ ​

​ Years Ended

​ December 31,

GAAP general and administrative expenses $ 126,713 ​ $ 71,086

GAAP general and administrative expenses adjustments: ​ ​ ​ ​ ​

Bad debt (recovery) expense ​ (18) ​ ​ 405

Adjusted General and Administrative Expenses $ 93,461 ​ $ 56,612

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The following unaudited table presents a reconciliation of EBITDA, EBITDA Margin, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly comparable GAAP measure, in each case, for the years ended December 31, 2022 and 2021:

​ ​ ​ ​ ​ ​

​ Years Ended

​ December 31,

​ ​ ​ ​ ​ ​

GAAP net loss margin ​ (194.6%) ​ ​ (260.0%)

Adjustments: ​ ​

Depreciation, net of capital-build amortization 19,103 ​ 12,122

Interest expense ​ 21 ​ —

Interest expense, related party ​ — ​ ​ 1,926

Income tax expense 18 ​ —

Adjustments: ​ ​ ​ ​ ​

Loss (gain) on investments 783 ​ (554)

Bad debt (recovery) expense (18) ​ 405

Change in fair value of earnout liability ​ (3,481) ​ ​ (2,214)

Change in fair value of warrant liability ​ (36,157) ​ ​ (31,105)

Adjusted EBITDA Margin ​ (147.0%) ​ ​ (231.3%)

1 Comprised primarily of $1.8 million in transaction costs related to the CRIS Business Combination and the PlugShare acquisition for the year ended December 31, 2021. See “Part II, Item 8. Consolidated Financial Statements and Supplementary Data – Note 3 – Business Combinations” for more information.

Liquidity and Capital Resources

EVgo has a history of operating losses and negative operating cash flows. As of December 31, 2022, EVgo had $246.5 million of cash, cash equivalents, and restricted cash and working capital of $188.1 million. As of December 31, 2021, EVgo had $485.2 million of cash, cash equivalents and restricted cash and a working capital deficit of $459.5 million. The Company’s net cash outflow for the year ended December 31, 2022 was $238.7 million. EVgo believes its cash and cash equivalents on hand as of December 31, 2022 is sufficient to meet EVgo’s current working capital and capital expenditure requirements for a period of at least twelve months from the filing date of this Annual Report.

To date, EVgo’s primary sources of liquidity have been cash flows from the CRIS Business Combination, revenues from its various revenue streams, government grants, proceeds from sales of EVgo’s Class A common stock loans and equity contributions from its previous owners and proceeds from sales of EVgo’s Class A common stock under the ATM Program. EVgo’s primary cash requirements include operating expenses, satisfaction of commitments to various counterparties and suppliers and capital expenditures (including property and equipment). EVgo’s principal uses of cash in recent periods have been funding its operations and investing in capital expenditures, including the purchase of EV chargers for installation.

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In July 2022, EVgo entered into the Delta Charger Supply Agreement and the Purchase Order with Delta, pursuant to which EVgo will purchase and Delta will sell EV chargers manufactured by Delta from time to time in specified quantities at certain delivery dates over a period of four years. EVgo is obligated to purchase at least 1,000 chargers (which will enable the construction of 2,000 stalls) pursuant to the Delta Charger Supply Agreement and the Purchase Order with the option, at EVgo’s election, to increase the number of chargers purchased to 1,100. Under the terms of the Purchase Order, EVgo will receive delivery of 600 chargers in the 11 months following July 12, 2022 and is required to make full payment on such chargers within sixty (60) days of receipt. EVgo’s obligations under the Purchase Order are take-or-pay obligations; however, EVgo’s liability is capped at a maximum of the greater of $30.0 million or 50% of the value of any outstanding firm orders. EVgo entered into the Delta Charger Supply Agreement and Purchase Order in order to meet its obligations under the Pilot Infrastructure Agreement, other potential contractual commitments and its own needs and intends to fund the capital expenditure required under the Delta Charger Supply Agreement and Purchase Order with proceeds from the Pilot Infrastructure Agreement as well as cash and cash equivalents on hand.

The term of the Tax Receivable Agreement commenced upon the completion of the CRIS Business Combination and will continue until all tax benefits that are subject to the Tax Receivable Agreement have been utilized or expired and all required payments are made, unless the Tax Receivable Agreement is terminated early (including upon a change of control). The actual timing and amount of any payments that may be made under the Tax Receivable Agreement are unknown at this time and will vary based on a number of factors. However, the Company Group expects that the payments that it will be required to make to TRA Holders in connection with the Tax Receivable Agreement will be substantial. Any payments made by the Company Group to TRA Holders under the Tax Receivable Agreement will generally reduce the amount of cash that might have otherwise been available to EVgo or EVgo OpCo. To the extent EVgo OpCo has available cash and subject to the terms of any current or future debt or other agreements, the EVgo OpCo A&R LLC Agreement will require EVgo OpCo to make pro rata cash distributions to holders of EVgo OpCo Units, including Thunder Sub, in an amount sufficient to allow the Company Group to pay its taxes and to make payments under the Tax Receivable Agreement. EVgo generally expects EVgo OpCo to fund such distributions out of available cash. However, except in cases where the Company Group elects to terminate the Tax Receivable Agreement early, the Tax Receivable Agreement is terminated early due to certain mergers or other changes of control, or the Company Group has available cash but fails to make payments when due, generally the Company Group may elect to defer payments due under the Tax Receivable Agreement if it does not have available cash to satisfy its payment obligations under the Tax Receivable Agreement or if its contractual obligations limit its ability to make these payments. Any such deferred payments under the Tax Receivable Agreement generally will accrue interest at the rate provided for in the Tax Receivable Agreement and such interest may significantly exceed the Company Group’s other costs of capital. In certain circumstances (including an early termination of the Tax Receivable Agreement due to a change of control or otherwise), 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. In the case of such an acceleration in connection with a change of control, where applicable, EVgo generally expects the accelerated payments due under the Tax Receivable Agreement to be funded out of the proceeds of the change of control transaction giving rise to such acceleration, which could have a significant impact on EVgo’s ability to consummate a change of control or the proceeds received by EVgo’s stockholders in connection with a change of control. However, the Company Group may be required to fund such payment from other sources and as a result, any early termination of the Tax Receivable Agreement could have a substantial negative impact on EVgo’s liquidity or financial condition.

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Cash Flows

The following table summarizes EVgo’s consolidated cash flows for the years ended December 31, 2022 and 2021:

Year Ended December 31, 2022 Compared with Year Ended December 31, 2021

​ ​ ​ ​ ​ ​ ​

​ ​ Years Ended December 31,

Cash flows used in operating activities ​ $ (58,794) ​ $ (29,603)

Cash flows used in investing activities ​ (199,707) ​ (87,765)

Cash flows provided by financing activities ​ 19,813 ​ 594,635

Operating Activities. Cash used in operating activities for the year ended December 31, 2022 was $58.8 million compared to cash used in operating activities of $29.6 million during the year ended December 31, 2021. This change was driven primarily by the timing of payments during 2022 compared to 2021. The year-over-year change primarily reflected a $23.6 million cash loss from operations, a $8.9 million decrease in cash flows from deferred revenue and an $8.3 million decrease in cash flows from accounts receivable, net, partially offset by a $3.3 million increase in cash flows from prepaid expenses and other current and noncurrent assets, a $2.9 million increase in cash flows from the receivable from a related party, a $2.7 million increase in cash flows from accounts payable and a $2.3 million increase in cash flows from customer deposits.

Investing Activities. Cash used in investing activities for the year ended December 31, 2022 was $199.7 million, primarily comprised of purchases of property, equipment and software. During the year ended December 31, 2021, cash used in investing activities was $87.8 million, consisting of $65.0 million of purchases of property and equipment, and $22.8 million paid, net of cash received, for the acquisition of PlugShare.

Financing Activities. Cash provided by financing activities for the year ended December 31, 2022 was $19.8 million, primarily comprised of net proceeds from sales of shares of Class A common stock in the fourth quarter of 2022 under the ATM Program and proceeds from capital-build funding received for charging stations. Cash provided by financing activities for the year ended December 31, 2021 was $594.6 million, consisting principally of $601.6 million in proceeds received in connection with the CRIS Business Combination and $24.0 million in proceeds from related party note payable, partially offset by $28.4 million in transaction costs paid in connection with the CRIS Business Combination.

Working Capital. EVgo’s working capital as of December 31, 2022 was $188.1 million, compared to $459.5 million as of December 31, 2021. During the year ended December 31, 2022, EVgo’s cash, cash equivalents and restricted cash balance decreased by $238.7 million, accrued liabilities increased by $12.2 million, deferred revenue, current increased by $10.9 million, and accounts receivable, net, increased by $8.5 million.

Contractual Obligations and Commitments. EVgo has material cash requirements for known contractual obligations and commitments in the form of operating leases, purchase commitments and certain other liabilities that are disclosed in “Part II, Item 8. Consolidated Financial Statements and Supplementary Data – Note 13 – Commitments and Contingencies” and discussed below. EVgo generally expects to fund these obligations through its existing cash and cash equivalents and future financing or cash flows from operations.

Critical Accounting Policies and Estimates

The discussion and analysis of EVgo’s financial condition and results of operations is based upon EVgo’s consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of EVgo’s financial statements requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and related disclosures of contingent assets and liabilities. Management bases these estimates on its historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results experienced may vary materially and adversely from EVgo’s estimates. Revisions to estimates are recognized prospectively. for more information See “Part II, Item 8. Consolidated Financial Statements and Supplementary Data –

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Note 2 – Summary of Significant Accounting Policies” for additional description of the significant accounting policies that have been followed in preparing EVgo’s consolidated financial statements.

The accounting policies described below are those EVgo considers to be the most critical to an understanding of its financial condition and results of operations and that require the most complex and subjective management judgment. EVgo considers its critical accounting estimates to be those related to its revenue recognition, business combinations and warrant liability, which are described below.

Revenue Recognition

EVgo recognizes revenue in accordance with ASC 606. Recording revenue requires judgment, including determining whether an arrangement includes multiple performance obligations, whether any of those obligations are distinct and cannot be combined and allocation of the transaction price to each performance obligation based on the relative standalone selling prices (“SSP”). Revenue for performance obligations can be recognized over time or at a point in time depending on the nature of the performance obligation. Changes to the elements in an arrangement or, in EVgo’s determination, to the relative SSP for these elements, could materially affect the amount of earned and unearned revenue reflected in its consolidated financial statements.

Understanding the complex terms of some of EVgo’s agreements and determining the appropriate time, amount and method under which the Company should recognize revenue for the related transactions requires significant judgment. The Company exercises judgment in determining which promises in a contract constitute performance obligations rather than set-up activities. The Company determines which activities under a contract transfer a good or service to a customer rather than activities that are required to fulfill a contract but do not transfer control of a good or service to the customer. Determining whether obligations in a contract are considered distinct performance obligations that should be accounted for separately or as a single performance obligation requires significant judgment. In reaching its conclusion, the Company assesses the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated which may require judgment based on the facts and circumstances of the contract. The Company does not disclose the transaction price allocated to remaining performance obligations for (i) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice and (ii) contracts with variable consideration allocated entirely to a single performance obligation. The Company’s remaining performance obligations under these contracts include providing charging services, branding services, and maintenance services which will generally be recognized over the contract term. The Company’s customer contracts may include variable consideration such as that due to the unknown number of users that will receive charging credits or an unknown number of sites that will receive maintenance services. For such variable consideration, the Company has determined it is not necessary to estimate variable consideration as the uncertainty resolves itself monthly in accordance with the contracts’ revenue recognition pattern. The timing and amount of revenue recognition in a period could vary if different judgments were made. The Company may also estimate variable consideration under the expected value method or the most likely amount method.

Additionally, where there are multiple performance obligations, judgment is required to determine revenue for each distinct performance obligation. Determining the relative SSP for contracts that contain multiple performance obligations requires significant judgment to appropriately determine the suitable method for estimating the SSP. EVgo determines SSP using observable pricing when available, which takes into consideration market conditions and customer specific factors.

At contract inception, EVgo determines whether EVgo satisfies the performance obligation over time or at a point in time. Revenues from charging – OEM are primarily recognized ratably over time or as fee-bearing usage occurs. Revenues from charging – retail, charging – commercial and LCFS are usage-based services and recognized over time or at a point in time upon the delivery of the charging products or services. eXtend and ancillary revenues are recognized over time based on a time-based or cost-based approach or at a point in time as performance obligations are satisfied.

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Business Combinations

Business combinations are accounted for using the acquisition method of accounting and accordingly, the assets and liabilities of the acquired business are recorded at their respective fair values. The excess of the purchase price over the estimated fair value is recorded as goodwill. Assigning fair market values to the assets acquired and liabilities assumed at the date of an acquisition requires knowledge of current market values and the values of assets in use and often requires the application of judgment regarding estimates and assumptions. While the ultimate responsibility resides with management, for certain acquisitions, EVgo retains the services of certified valuation specialists to assist with assigning estimated values to certain acquired assets and assumed liabilities, including intangible assets and tangible long-lived assets. Acquired intangible assets, excluding goodwill, are valued using various methodologies including discounted cash flows, relief from royalty, and multiperiod excess earnings, among others, depending on the type of intangible asset purchased. These methodologies incorporate various estimates and assumptions, such as projected revenue growth rates, profit margins and forecasted cash flows based on discount rates and terminal growth rates.

Warrant Liability

EVgo accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480 and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to EVgo’s common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of EVgo’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end-date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized in “changes in fair value of warrant liability” in the consolidated statements of operations. The fair value of the private placement warrants on the date of issuance and on each measurement date is estimated using a Monte Carlo simulation methodology, which includes inputs such as EVgo’s stock price, the risk-free interest rate, the expected term, the expected volatility, the dividend rate, the exercise price and the number of private placement warrants outstanding. Assumptions used in the model are subjective and require significant judgment.

Recent Accounting Pronouncements

For a discussion of EVgo’s new or recently adopted accounting pronouncements, see “Part II, Item 8. Consolidated Financial Statements and Supplementary Data – Note 2 – Summary of Significant Accounting Policies” as of and for the years ended December 31, 2022 and 2021.

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act includes provisions that, among other things, relax certain reporting requirements for qualifying public companies. Following the CRIS Business Combination, EVgo has qualified as an “emerging growth company” (“EGC”) under the JOBS Act and, as a result, is permitted to comply with new or revised accounting pronouncements based on the effective date for private (i.e., not publicly traded) companies. EVgo elected to delay the adoption of new or revised accounting standards and as a result, EVgo may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, EVgo’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

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As an EGC, EVgo is not required to, among other things, (a) provide an auditor’s attestation report on EVgo’s system of internal control over financial reporting, (b) provide all of the compensation disclosure that may be required of non-EGC public companies, (c) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (d) disclose comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of the Initial Public Offering or until EVgo otherwise no longer qualifies as an EGC.

Additionally, following the CRIS Business Combination, EVgo has qualified as a “smaller reporting company” as defined under the Exchange Act. EVgo may continue to be a smaller reporting company so long as either (i) the market value of shares of its common stock held by non-affiliates is less than $250 million or (ii) its annual revenue was less than $100 million during the most recently completed fiscal year and the market value of shares of its common stock held by non-affiliates is less than $700 million. If EVgo is a smaller reporting company at the time it ceases to be an EGC, EVgo may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, EVgo may choose to present only the two most recent fiscal years of audited financial statements in its Annual Report on Form 10-K and has reduced disclosure obligations regarding executive compensation and, similar to EGCs, if EVgo is a smaller reporting company under the requirements of (ii) above, EVgo would not be required to obtain an attestation report on internal control over financial reporting issued by its independent registered public accounting firm.

​

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

EVgo is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. As a result, pursuant to Item 305(e) of Regulation S-K, the Company is not required to provide the information required by this Item 7A.

​

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Item 8. Consolidated Financial Statements and Supplementary Data.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

​

​ Page

Consolidated Financial Statements: ​

​ ​

​ ​

​ ​

​ ​

​ ​

​ ​

Notes to Consolidated Financial Statements 91

​ ​

Financial Statement Schedule: ​

​ ​

Schedule II – Valuation and Qualifying Accounts 138

​

The financial information in the financial statement schedule should be read in conjunction with the consolidated financial statements. All other financial statement schedules have been omitted because they are not applicable or the required information is included in the consolidated financial statements or the notes thereto.

​

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Report of Independent Registered Public Accounting Firm

​

​

To the Stockholders and Board of Directors

EVgo Inc.:

​

Opinion on the Consolidated Financial Statements

​

We have audited the accompanying consolidated balance sheets of EVgo Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, stockholders’ deficit / stockholders’ and member’s equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes and financial statement schedule II, (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

​

Change in Accounting Principle

​

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2022 due to the adoption of Leases (Accounting Standards Codification Topic 842), and related amendments.

​

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

​

We have served as the Company’s auditor since 2020.

​

Albuquerque, New Mexico

March 30, 2023

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EVgo Inc. and Subsidiaries

​

Consolidated Balance Sheets

​ ​ ​ ​ ​ ​ ​

​ ​ December 31, ​ December 31,

Assets ​ ​ ​

Current assets ​ ​ ​

Cash, cash equivalents and restricted cash $ 246,193 ​ $ 484,881

Accounts receivable, capital-build ​ 8,011 ​ 9,621

Receivable from related party ​ — ​ 1,500

Operating lease right-of-use assets ​ ​ 51,856 ​ ​ —

Restricted cash ​ ​ 300 ​ ​ 300

​ ​ ​ ​ ​ ​ ​

Current liabilities ​ ​ ​

Operating lease liabilities, current ​ ​ 4,958 ​ ​ —

Other current liabilities ​ 136 ​ 111

Operating lease liabilities, noncurrent ​ ​ 45,689 ​ ​ —

Earnout liability, at fair value ​ ​ 1,730 ​ ​ 5,211

Warrant liability, at fair value ​ ​ 12,304 ​ ​ 48,461

Other liabilities ​ — ​ 146

​ ​ ​ ​ ​ ​ ​

Commitments and contingencies (Note 13) ​ ​ ​ ​ ​ ​

​

The accompanying notes are an integral part of these consolidated financial statements.

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​

Consolidated Balance Sheets (continued)

​

​ ​ ​ ​ ​ ​ ​

​ ​ December 31, ​ December 31,

(in thousands, except share data) 2022 2021

​ ​ ​ ​ ​ ​ ​

Stockholders’ deficit ​ ​ ​ ​ ​ ​

Additional paid-in capital ​ ​ 17,533 ​ ​ —

​

The accompanying notes are an integral part of these consolidated financial statements.

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Consolidated Statements of Operations

​ ​ ​ ​ ​ ​ ​

​ ​ Years Ended

​ ​ December 31,

(in thousands, except per share data) ​ 2022 2021

Revenue from related party ​ ​ 75 ​ ​ 562

Depreciation, net of capital-build amortization ​ ​ 18,779 ​ ​ 11,986

​ ​ ​ ​ ​ ​ ​

General and administrative expenses ​ ​ 126,713 ​ ​ 71,086

Depreciation, amortization and accretion ​ ​ 17,139 ​ ​ 11,915

​ ​ ​ ​ ​ ​ ​

Interest expense ​ ​ (21) ​ ​ —

Interest expense, related party ​ ​ — ​ ​ (1,926)

Interest income ​ ​ 4,479 ​ ​ 69

Other (expense) income, net ​ ​ (815) ​ ​ 607

Change in fair value of earnout liability ​ ​ 3,481 ​ ​ 2,214

Change in fair value of warrant liability ​ ​ 36,157 ​ ​ 31,105

Loss before income tax expense ​ ​ (106,222) ​ ​ (57,762)

Income tax expense ​ ​ (18) ​ ​ —

Net loss attributable to Class A common stockholders ​ $ (27,575) ​ $ (5,906)

​ ​ ​ ​ ​ ​ ​

​

The accompanying notes are an integral part of these consolidated financial statements.

​

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​

Consolidated Statements of Stockholders’ Deficit

For the Year Ended December 31, 2022

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​

(in thousands) Shares Amount Shares Amount Capital Deficit Deficit

Share-based compensation ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 23,170 ​ ​ — ​ ​ 23,170

Shares withheld for taxes ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (25) ​ ​ — ​ ​ (25)

Net loss1 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (27,575) ​ ​ (27,575)

​

1 Excludes $78.7 million of net loss attributable to redeemable noncontrolling interest.

​

The accompanying notes are an integral part of these consolidated financial statements.

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Consolidated Statements of Stockholders’ and Member’s Equity (Deficit)

For the Year Ended December 31, 2021

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Stockholders’ /

Warrants exercised ​ — ​ ​ — ​ ​ 3 ​ ​ 0 ​ ​ — ​ ​ — ​ ​ 30 ​ ​ — ​ ​ 30

Net loss1 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (40,938) ​ ​ (40,938)

​

1 Excludes $16.8 million of net income attributable to redeemable noncontrolling interest.

The accompanying notes are an integral part of these consolidated financial statements.

​

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​

Consolidated Statements of Cash Flows

​ ​ ​ ​ ​ ​ ​

​ ​ Years Ended

​ ​ December 31,

Cash flows from operating activities ​ ​ ​

Depreciation, amortization and accretion ​ 35,918 ​ ​ 23,901

Interest expense, related party ​ ​ — ​ ​ 1,926

Change in fair value of earnout liability ​ ​ (3,481) ​ ​ (2,214)

Change in fair value of warrant liability ​ ​ (36,157) ​ ​ (31,105)

Changes in operating assets and liabilities ​ ​ ​ ​ ​

Accounts receivable, net ​ (8,516) ​ ​ (195)

Receivables from related parties ​ 1,500 ​ ​ (1,425)

Prepaid expenses and other current and noncurrent assets ​ (2,364) ​ ​ (5,691)

Operating lease assets and liabilities, net ​ ​ (519) ​ ​ —

Payables to related parties ​ — ​ ​ (904)

Other current and noncurrent liabilities ​ (1,074) ​ ​ (737)

Net cash used in operating activities ​ (58,794) ​ ​ (29,603)

Cash flows from investing activities ​ ​ ​ ​ ​

Purchases of property, equipment and software ​ ​ (200,251) ​ ​ (65,003)

Proceeds from insurance for property losses ​ ​ 710 ​ ​ —

Purchases of investments ​ ​ (37,332) ​ ​ —

Proceeds from sale of investments ​ ​ 37,166 ​ ​ —

Acquisition of business, net of cash received ​ ​ — ​ ​ (22,762)

Net cash used in investing activities ​ (199,707) ​ ​ (87,765)

Cash flows from financing activities ​ ​ ​ ​ ​

Issuance of common stock under the ATM ​ ​ 10,654 ​ ​ —

Proceeds from capital-build funding ​ 10,088 ​ ​ 2,909

Proceeds from exercise of warrants ​ ​ 3 ​ ​ 30

Proceeds from CRIS Business Combination ​ — ​ ​ 601,579

Proceeds from note payable, related party ​ ​ — ​ ​ 24,000

Payments on note payable, related party ​ ​ — ​ ​ (5,500)

Payment of transaction costs for CRIS Business Combination ​ ​ — ​ ​ (28,383)

Payments of issuance costs and deferred transaction costs ​ ​ (907) ​ ​ —

Net cash provided by financing activities ​ 19,813 ​ ​ 594,635

Cash and restricted cash, beginning of period ​ 485,181 ​ ​ 7,914

The accompanying notes are an integral part of these consolidated financial statements.

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EVgo Inc. and Subsidiaries

​

Consolidated Statements of Cash Flows (continued)

​ ​ ​ ​ ​ ​ ​

​ ​ Years Ended

​ ​ December 31,

Supplemental disclosure of noncash investing and financing activities ​ ​ ​ ​ ​

Asset retirement obligations incurred ​ $ 1,822 ​ $ 2,456

Accrued transaction costs ​ $ 312 ​ $ 352

Conversion of note payable, related party, to equity ​ $ — ​ $ 59,590

The accompanying notes are an integral part of these consolidated financial statements.

​

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EVgo Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1– Description of Business and Nature of Operations

EVgo Inc. (“EVgo”) owns and operates a public direct current (“DC”) fast charging network for electric vehicles (“EVs”) in the United States (“U.S.”). EVgo’s network of charging stations provides EV charging infrastructure to consumers and businesses. Its network is capable of charging all EV models and charging standards currently available in the U.S. EVgo partners with automotive original equipment manufacturers (“OEMs”), fleet and rideshare operators, retail hosts such as grocery stores, shopping centers, gas stations, parking lot operators, governments and other organizations and property owners in order to locate and deploy its EV charging infrastructure. EVgo Services LLC (“EVgo Services”) was formed in October 2010 as NRG EV Services, LLC, a Delaware limited liability company and wholly owned subsidiary of NRG Energy, Inc., an integrated power company based in Houston, Texas (“NRG”). On June 17, 2016, NRG sold a majority interest in EVgo Services to Vision Ridge Partners.

On January 16, 2020 (the “Holdco Merger Date”), EVgo Holdco, LLC (“EVgo Holdco”), a Delaware limited liability company and a subsidiary of LS Power Equity Partners IV, L.P. (“LS Power”), completed an acquisition of EVgo Services, pursuant to the merger agreement (the “Holdco Merger Agreement”) among EVgo Services, its investors and EVgo Holdco, whereby EVgo Services became a wholly-owned subsidiary of EVgo Holdco, resulting in a change in control of EVgo Services (the “Holdco Merger”). EVgo Holdco had no operations prior to the Holdco Merger. The Company (as defined below) elected push-down accounting and all of the Company’s assets and liabilities related to LS Power were remeasured at fair value on the Holdco Merger Date. LS Power was considered to be the accounting acquirer and formed EVgo Holdings, LLC (“EVgo Holdings”) and EVgo Holdco as part of the transaction.

EVgo Inc. (the “Company,” or “EVgo”) was incorporated in Delaware on August 4, 2020 under the name Climate Change Crisis Real Impact I Acquisition Corporation (“CRIS”). The Company was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Initial Business Combination”). On October 2, 2020, the Company completed its initial public offering (the “Initial Public Offering”). Simultaneously with the closing of the Initial Public Offering, the Company completed the sale of 6,600,000 warrants (the “Private Placement Warrants”) at $1.00 in a private placement to Climate Change Crisis Real Impact I Acquisition Holdings, LLC (the “Sponsor”), generating gross proceeds of $6,600,000.

On July 1, 2021 (the “CRIS Close Date”), the Company consummated the business combination (the “CRIS Business Combination”) with CRIS, CRIS Thunder Merger LLC (“Thunder Sub”), EVgo Holdings, EVgo Holdco and EVgo OpCo, LLC (“EVgo OpCo” and together with EVgo Holdings and EVgo Holdco, the “EVgo Parties”) pursuant to the business combination agreement dated January 21, 2021 (the “Business Combination Agreement”). Following the CRIS Close Date, the combined company is organized in an “Up-C” structure in which the business of EVgo Holdco and its subsidiaries are held by EVgo OpCo and continue to operate through the subsidiaries of EVgo Holdco and in which the Company’s only direct assets consist of equity interests in Thunder Sub, which, in turn, holds only common units in EVgo OpCo (“EVgo OpCo Units”).

As of December 31, 2022, the Company, through Thunder Sub, owned 26.4% of the EVgo OpCo Units. As the sole managing member of EVgo OpCo, Thunder Sub operates and controls all of the business and affairs of EVgo OpCo and through EVgo OpCo and its subsidiaries, conducts its business. As a result, beginning on July 1, 2021 (the CRIS Close Date), the Company consolidated the financial results of EVgo OpCo and recorded a redeemable noncontrolling interest in its consolidated financial statements to reflect the EVgo OpCo Units that are owned by EVgo Holdings after the CRIS Close Date. As of December 31, 2022, EVgo Holdings held 195,800,000 EVgo OpCo Units, representing 73.6% of the total outstanding EVgo OpCo Units and an equal number of shares of the Company’s Class B common stock.

Each EVgo OpCo Unit, together with one share of Class B common stock, is redeemable, subject to certain conditions, for either one share of Class A common stock, or, at EVgo OpCo’s election, the cash equivalent to the market value of one share of Class A common stock, pursuant to the Amended and Restated LLC Agreement of EVgo OpCo dated July 1, 2021 (the “EVgo OpCo A&R LLC Agreement”).

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Geopolitical and Macroeconomic Environment

During the last several years, the global economy has experienced disruption and sustained volatility due to a number of factors. In particular, the global outbreak of COVID-19 resulted in significant volatility in the global and domestic economies, changes in consumer and business behavior, market downturns and restrictions on business and individual activities, resulting in overall reduced economic activity.

The COVID-19 pandemic impacted EVgo’s operations through reduced network throughput, construction delays and supply chain and shipping constraints. EVgo also experienced delays in its negotiations with commercial and public-entity property owners, landlords and/or tenants (collectively, the “Site Hosts”), as Site Hosts devoted more time to day-to-day operations and employee health and safety. Finally, for some contractual commitments, EVgo is required to adhere to a construction schedule over specified timeframes. Those timelines were impacted due to delays associated with COVID-19 and broader supply chain disruptions and it is possible that the pandemic and its ongoing effects could continue to impact these timelines in the future.

More recently, Russia’s military invasion of Ukraine and the subsequent sanctions imposed on Russia, Belarus, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic have led to and will likely continue to lead to, geopolitical instability, market uncertainty and supply disruptions. Finally, rising inflation has increased operating costs for many businesses and, together with slowing economic growth and fear of a recession, has led governments to change monetary policy in response.

The current economic environment remains uncertain and the extent to which EVgo’s operating and financial results for future periods will be impacted by the ongoing impacts of the COVID-19 pandemic, the ongoing conflict in Ukraine, increasing inflation, supply-chain disruptions, government efforts to reduce inflation and any recession will largely depend on future developments, which are highly uncertain and cannot be reasonably estimated at this time.

​

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The CRIS Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”), primarily due to the fact that EVgo Holdings continues to control the Company through its ownership of the Company’s Class B common stock. As described in Note 1, EVgo Services was acquired by EVgo Holdco on the Holdco Merger Date and EVgo Holdco was partially acquired by EVgo through EVgo’s acquisition of EVgo OpCo Units, on the CRIS Close Date.

The accompanying consolidated financial statements are presented in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). References to GAAP issued by the Financial Accounting Standards Board (“FASB”) in these notes to the consolidated financial statements are to the FASB Accounting Standards Codification (“ASC”). The consolidated financial statements include the accounts of the Company and its subsidiaries and all intercompany transactions have been eliminated in consolidation.

GAAP defines subsequent events as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. Based on their nature, magnitude and timing, certain subsequent events may be required to be reflected in the consolidated financial statements at the balance sheet date and/or required to be disclosed in the notes to the consolidated financial statements. The Company has evaluated subsequent events accordingly.

Use of Estimates

The consolidated financial statements have been prepared in accordance with GAAP. The preparation of EVgo’s consolidated financial statements requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and related disclosures of contingent assets and liabilities. Significant estimates made by management include, but are not limited to, variable consideration estimates for revenue, depreciable lives of property and equipment and intangible assets, costs associated with asset retirement obligations, the

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fair value of share-based compensation, earnout liability, warrant liability and the fair value measurements of assets and liabilities allocated for acquired businesses. Management bases these estimates on its historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results experienced may vary materially and adversely from EVgo’s estimates. Revisions to estimates are recognized prospectively.

Concentration of Business and Credit Risk

The Company maintains its cash accounts in commercial banks. Cash balances held in a commercial bank are secured by the Federal Deposit Insurance Corporation up to $250,000. At times, a portion of deposit balances may be in excess of federal insurance limits. The Company has not experienced any losses on such accounts and believes it is not exposed to any significant credit risk on cash. The Company mitigates its risk with respect to cash by maintaining its deposits at high-quality financial institutions and monitoring the credit ratings of those institutions.

The Company had one customer that comprised 19.7% of the Company’s total accounts receivable as of December 31, 2022. The Company had two customers that comprised 32.4% of the Company’s total accounts receivable as of December 31, 2021. For the year ended December 31, 2022, two customers represented 42.9% of total revenue. For the year ended December 31, 2021, one customer represented 10.5% of total revenue.

For the years ended December 31, 2022 and 2021, EVgo had four and two vendors, respectively, that provided more than 10% of EVgo’s total charging equipment. For the years ended December 31, 2022 and 2021, the amount provided by these vendors were 88.8% and 37.3%, respectively.

Reclassifications

The Company has made certain reclassifications to prior period amounts to conform to current period presentation.

Cash, Cash Equivalents and Restricted Cash

Cash and restricted cash include cash held in cash depository accounts in major banks in the U.S. and are stated at cost. Cash equivalents are carried at fair value and are primarily invested in money market funds. Cash that is held by a financial institution and has restrictions on its availability to the Company is classified as restricted cash.

The Company had unused letters of credit, which were collateralized with cash classified as restricted cash on the Company's consolidated balance sheets, of $0.7 million as of December 31, 2022 and 2021, associated with the construction of its charging stations and in connection with one of its operating leases.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are amounts due from customers under normal trade terms. Payment terms for accounts receivable related to capital-build agreements are specified in the individual agreements and vary depending on the counterparty. Management reviews accounts receivable on a recurring basis to determine if any accounts receivable will potentially be uncollectible. The Company reserves for any accounts receivable balances that are determined to be uncollectible in the allowance for doubtful accounts. After all attempts to collect an account receivable have failed, the account receivable is written-off against the allowance for doubtful accounts. Other accounts receivable of $1.3 million and a de minimis amount were included in accounts receivable, net, on the consolidated balance sheets as of December 31, 2022 and 2021, respectively.

Deferred Offering Costs

Deferred offering costs, consisting primarily of legal, accounting and filing fees relating to public offerings, are capitalized. The deferred offering costs will be offset against public offering proceeds upon the effectiveness of an offering. In the event that an offering is abandoned or terminated, deferred offering costs will be expensed. As of December 31, 2022 and 2021, the Company had capitalized $1.0 million and $0.2 million, respectively, of deferred offering costs in other current assets on the consolidated balance sheets.

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Cloud Implementation Costs

The Company capitalizes certain implementation costs incurred related to cloud computing arrangements that are service contracts. Such costs are amortized on a straight-line basis over the term of the associated hosting arrangement plus any reasonably certain renewal period. Any capitalized amounts related to such arrangements are recorded within prepaid expense and other current assets and within non-current assets on the consolidated balance sheets.

Property, Equipment and Software

Property and equipment includes land, charging stations and other technical installations, construction in process, charging station and related equipment and a building, which are stated at cost or at fair value as of the date of acquisition less accumulated depreciation and amortization.

Land is not depreciated. Depreciation for property, equipment and software is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful life of the building is forty years and the estimated useful lives of the remaining assets are approximately three to seven years. Charging equipment and charging station installation costs are depreciated when they are placed into service. Construction in process consists primarily of charging equipment, charging station installation costs, and software that have not yet been placed into service and are not depreciated. Charging equipment consists primarily of equipment and various components that have not yet been allocated to a project. Leasehold improvements are amortized over the shorter of the estimated useful life or the lease term. Depreciation is reported net of the amortization of the capital-build liability, as described in Note 7. The cost of maintenance and repairs is charged to expense as incurred while significant renewals and betterments are capitalized. Deductions are made for retirements and/or disposals. Following the disposition of an asset, the associated net cost is no longer recognized as an asset and any gain or loss on the disposition, inclusive of any amounts recovered from insurance, is reflected in general and administrative expenses.

The Company has adopted the provisions of ASC Topic 350-40, Internal-Use Software, and therefore the costs incurred in the preliminary stages of software development are expensed as incurred. The Company capitalizes all costs related to software developed or obtained for internal use when management commits to funding the project, the preliminary project stage is completed and when technological feasibility is established. Once a new functionality or improvement is released, the asset is subject to depreciation. Capitalization of costs ceases when the project is substantially complete and ready for its intended use and the costs are amortized into general and administrative expenses using the straight-line method over the estimated useful lives of the software assets, which is generally three years.

Goodwill and Other Intangible Assets

Goodwill represents the difference between the purchase price and the fair value of identifiable net assets acquired in a business combination. The Company’s goodwill and intangible assets are the result of the Holdco Merger and as part of the acquisition of PlugShare LLC (f/k/a Recargo, Inc.) (see Note 3). EVgo completes an impairment test of goodwill at least annually or more frequently if facts or circumstances indicate that goodwill might be impaired. EVgo’s annual impairment test date is October 1st. Goodwill is tested for impairment at the reporting unit level. EVgo first performs a qualitative assessment of EVgo’s single reporting unit. Factors considered in the qualitative assessment include general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of EVgo’s reporting unit, events or changes affecting the composition or carrying amount of the net assets of EVgo’s reporting unit, any sustained decrease in EVgo’s share price and other relevant entity-specific events. If EVgo elects to bypass the qualitative assessment or if EVgo determines, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, a quantitative test would be required. EVgo then performs the goodwill impairment test for each reporting unit by comparing the reporting unit’s carrying amount, including goodwill, to its fair value, which is measured based upon, among other factors, a discounted cash flow analysis, as well as market multiples for comparable companies. Estimates critical to EVgo’s evaluation of goodwill for impairment include forecasts for revenue, EBITDA growth and long-term growth rates, as well as the discount rates. If the carrying amount of the reporting unit is greater than its fair value, goodwill is considered impaired. EVgo did not recognize any impairment losses for any periods presented. It is possible in future periods that further declines in market conditions, customer demand or other potential changes in operations may increase the risk that these assets may become impaired.

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Finite-lived intangible assets are amortized over their useful lives and recorded as either cost of sales or operating expenses depending on the nature of the intangible asset. Costs incurred to renew or extend the term of recognized intangible assets are expensed as incurred. During the fourth quarter of 2022, the Company reviewed its goodwill and other intangible assets for indicators of impairment and performed its annual goodwill impairment analysis as part of this review. The Company did not note any indicators of impairment with respect to its goodwill or other intangible assets as of December 31, 2022 and no impairment charge was required.

Estimated useful lives of the Company’s intangible assets are presented below:

​

​ ​ ​ ​

Site Host relationships ​ 12 years

Customer relationships ​ 4-5 years

Developed technology ​ 10-15 years

User base ​ 4 years

Trade name ​ 15-20 years

​

Long-Lived Asset Impairment

The Company reviews its long-lived assets, including property and equipment, right-of-use assets and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If the Company identifies events or changes in circumstances that could impact recoverability, the Company compares the carrying value of the assets or asset groups with their estimated future undiscounted cash flows. If it is determined that an impairment has occurred, the loss would be recognized during that period. The impairment loss would be calculated as the difference between the asset or asset group carrying values and the present value of estimated net cash flows or comparable market values, giving consideration to recent operating performance and pricing trends. EVgo did not recognize any impairment losses for any periods presented. It is possible in future periods that further declines in market conditions, customer demand or other potential changes in operations may increase the risk that these assets may become impaired. During the fourth quarter of 2022, the Company reviewed its long-lived assets for indicators of impairment, did not note any indicators of impairment and no impairment charge was required.

Lease Accounting

The Company accounts for leases under ASC Topic 842, Leases (“ASC 842”). As a lessee, the Company enters into agreements with various Site Hosts, which allow the Company to lease space to operate the charging stations on their property and with various parties to lease its office, warehouse and laboratory space. The Company, at the inception of the contract, determines whether a contract is or contains a lease. For leases with an initial contractual term in excess of 12 months, the Company records the related operating or finance right-of-use asset and lease liability. Some leases also include renewal and/or early termination options, which can be exercised under specific conditions. Renewal and termination options are not included in the measurement of the right-of-use assets and lease liabilities unless the Company is reasonably certain to exercise the options.

The Company’s lease agreements primarily require lease payments based on a minimum annual rental amount. In addition to minimum lease payments, the Company’s lease agreements may contain variable lease payments based on revenue-sharing or inflation adjustments. The Company has elected the practical expedient to not separate non-lease components from lease components in the measurement of liabilities for all asset classes. Lease liabilities are recognized at the present value of the fixed lease payments using an implicit rate and, if not available, an incremental borrowing rate based on estimated collateralized borrowings available to the Company. The Company incurs initial direct costs and receives landlord incentives that increase or decrease the calculated right-of-use asset, respectively. The Company recognizes lease expense for operating leases on a straight-line basis over the lease term. The Company expenses variable lease payments as incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company has not entered into any finance leases.

As a lessor, the Company has entered into agreements to lease charging equipment, charging stations and other technical installations or sublease properties leased from Site Hosts to third parties. The Company, at the inception of a

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lease contract, determines if it is an operating, sales-type or direct financing lease. The Company has not elected the practical expedient to not separate non-lease components from lease components in the measurement of liabilities for all asset classes. The leases generally provide for fixed monthly payments and sometimes include provisions for contingent variable rent based on the number of charging sessions and minutes used, which are recognized when earned. Fixed payments received under lease agreements for operating leases are recognized on a straight-line basis over the lease term and are reported in revenue in the consolidated statements of operations.

Deferred Revenue

Deferred revenue consists of billings on contracts where performance has commenced and payments have been received in advance of revenue recognition. Deferred revenue is recognized into revenue as the related revenue recognition criteria are met.

Customer Deposits

Customer deposits include prepayments that are refundable. Once deposits are no longer refundable, the Company reclassifies the amounts related to those contracts to deferred revenue. Customer deposits are also comprised of funds that have been received to offset future expenses of the Company for certain marketing expenses reimbursed by customers.

Capital-Build Liability and Expense Reimbursements

The Company receives grant funding in the form of cash from governmental and non-governmental entities to construct and operate EV chargers. As there is no authoritative guidance under GAAP regarding accounting for government assistance to for-profit business entities, the grants directly or indirectly provided by the government are accounted for by analogy to International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance. Grant contracts provided by non-governmental entities are analyzed and if it does not fall under the scope of ASC 842 or ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), they are accounted for under IAS 20.

The charging stations purchased and installed under these programs or agreements are recorded in property and equipment. At the time the expenditures for the charging stations have been incurred, the funding associated with the charging station capital expenditure is deferred as a capital-build liability and amortized against depreciation expense over the remaining useful life of the related assets. The Company retains ownership of these charging stations. Reimbursement under the agreements for operating and maintenance expenses is recognized as an offset to cost of revenue in the consolidated statements of operations in the period in which EVgo recognizes the related costs of operation and maintenance of the chargers.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”). For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the consolidated balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet dates.

Earnout Liability

In accordance with ASC 815, Earnout Shares (as defined in Note 3) were initially recorded as a derivative liability at fair value as of the CRIS Close Date, since they are not indexed to the Company’s Class A common stock. They are subsequently remeasured at each reporting date through the change in fair value of earnout liability in the consolidated statements of operations. The estimated fair value of the contingent earnout liability is determined using a Monte Carlo

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simulation using a distribution of potential outcomes on a monthly basis over the Earnout Period (as defined in Note 17), prioritizing the most reliable information available. The assumptions utilized in the calculation are based on the achievement of certain stock price milestones, including the current common stock price, expected volatility, risk-free rate, expected term and dividend rate.

Until its settlement, the contingent earnout liability is categorized as a Level 3 (defined below) fair value measurement because the Company utilizes projections during the Earnout Period that include unobservable inputs. Contingent earnouts involve certain assumptions requiring significant judgment and actual results can differ from assumed and estimated amounts.

Asset Retirement Obligations

Asset retirement obligations represent the estimated present value of the amount the Company will incur for dismantling and restoring sites (locations owned by unrelated parties where the Company’s chargers are placed) at the end of their agreements, in accordance with their contractual terms. Upon initial recognition of the Company’s asset retirement obligation liability, property and equipment is increased by an amount offsetting the liability and depreciated over its useful life and the obligation is accreted to its estimated future value at the date of retirement. Subsequent to establishing an asset retirement obligation, downward revisions in the liability due to a change in the expected timing or amount of cash flows are recorded as corresponding decreases to the asset retirement costs; however, if the amount of the decrease exceeds the carrying value of the related asset retirement cost and related asset, such excess credits are adjusted through a reduction of accretion expense.

Asset retirement obligations require the use of estimates to determine third-party costs for dismantling and restoring the sites. Discount rates are also included to present value these costs, which are then accreted to the date the Company expects to remove the corresponding asset. Discount rates are based on the Company’s estimated credit adjusted risk-free rate. The Company reviews its estimates of removal costs on an ongoing basis and makes changes to the asset retirement obligations as necessary.

Warrant Liability

The Company accounts for its issued and outstanding warrants (as described in Note 16) in accordance with the guidance contained in ASC 815, under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the warrants as liabilities at their fair value and adjusts the warrants to fair value at the end of each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised or redeemed by the Company and any change in fair value is recognized in the statements of operations. The fair value of the redeemable warrants (the “Public Warrants”), originally sold as part of the units issued in the Company’s Initial Public Offering, has been estimated using the closing price of the Public Warrants as of December 31, 2022 and 2021. The Private Placement Warrants were initially valued using a Monte Carlo simulation model, which was a level 3 (defined below) fair value measurement. Commencing June 30, 2022, the fair value of the Private Placement Warrants was measured by reference to the trading price of the Public Warrants, which is considered to be a Level 2 (defined below) fair value measurement.

Fair Value Measurement

The Company determines fair value in accordance with ASC 820, Fair Value Measurement, which establishes a hierarchy for the inputs used to measure the fair value of financial assets and liabilities based on the source of the input, which generally range from quoted prices for identical instruments in a principal trading market (“Level 1”) to estimates determined using significant unobservable inputs (“Level 3”). Multiple inputs may be used to measure fair value; however, the level of fair value is based on the lowest significant input level within this fair value hierarchy. The Company’s recurring and non-recurring fair value measurements include the initial valuation of asset retirement obligations, the issuance of share-based compensation awards, the initial valuations of the assets and liabilities identified in purchase accounting, including intangible assets and property and equipment and the earnout and warrant liabilities.

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Details on the methods and assumptions used to determine the fair values are as follows:

The carrying values of certain accounts such as accounts receivable, accounts payable and accrued expenses are deemed to approximate their fair values due to their short-term nature. The fair values of the Company’s money market funds are based on quoted prices in active markets for identical assets.

Revenue Recognition

The Company’s sources of revenue are from retail, commercial and OEM charging contracts, regulatory credits, OEM network contracts, eXtend, and ancillary services. Its primary source of revenue is charging contracts with customers. A significant portion of the Company’s charging contracts have upfront payment terms or monthly payment terms. Payments for walk-up retail charging usage are collected at the point of service, except for monthly member fees and member usage fees which are billed monthly in arrears. Payments for development and project management revenue occur either on an installment basis or are received upon completion of milestones. Payment terms vary on a contract-by-contract basis, although terms generally include a requirement of payment within 30 to 60 days. Revenues for regulatory credits such as LCFS credit sales are recognized upon delivery.

The Company recognizes revenue pursuant to ASC 606, using a five-step model: (a) identification of the contract, or contracts, with a customer; (b) identification of the performance obligations in the contract; (c) determination of the transaction price; (d) allocation of the transaction price to the performance obligations in the contract; and (e) recognition of revenue when, or as, it satisfies a performance obligation.

The transaction price for each contract is determined based on the amount the Company expects to be entitled to receive in exchange for transferring the promised products or services to the customer. Collectability of revenue is reasonably assured based on historical evidence of collectability of fees the Company charges its customers. The transaction price in the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied. At contract inception, the Company determines whether it satisfies the performance obligation over time or at a point in time. Revenue is recorded based on the transaction price excluding amounts collected on behalf of third parties such as sales taxes, which are collected on behalf of and remitted to governmental authorities. The Company may also incur fulfillment costs that are reimbursed by its customers as pass-through costs that may or may not be subject to a mark-up. Reimbursement for fulfillment costs is included in the transaction price and is recognized on a gross basis. The Company recognizes estimated losses on contracts immediately upon identification of the loss.

Some of the Company’s contracts with customers only contain a single performance obligation. When agreements involve multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. The Company applies significant judgment in identifying and accounting for each performance obligation, as a result of evaluating terms and conditions in contracts. The transaction price is allocated to each performance obligation based on the relative standalone selling price (“SSP”). The Company determines the SSP based on observable SSP when it is available, as well as other factors, including the price charged to its customers, its discounting practices and its overall pricing objectives, while maximizing observable inputs.

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EVgo’s contracts may provide its customers with the option to renew the agreement. Generally, this option is not considered to provide a material right that should be accounted for as a separate performance obligation because the customer would not receive a discount if it decided to renew and the option to renew is generally cancellable by either party subject to the notice of non-renewal requirements specified in the contract. If a material right is identified, the Company would account for these accordingly as separate performance obligations. EVgo’s contracts may also provide its customers with the option to purchase additional future services. Generally, this option is not considered to provide the customer with a material right that should be accounted for as a separate performance obligation since the cost of the additional future services are generally at market rates for such services and the Company is not automatically obligated to stand ready to deliver these additional goods or services because the customer may reject EVgo’s proposal.

Areas of Judgment and Estimates

The Company exercises judgment in determining which promises in a contract constitute performance obligations rather than set-up activities. The Company determines which activities under a contract transfer a good or service to a customer rather than activities that are required to fulfill a contract but do not transfer control of a good or a service to the customer. Determining whether obligations in a contract are considered distinct performance obligations that should be accounted for separately or as a single performance obligation requires significant judgment. In reaching its conclusion, the Company assesses the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated which may require judgment based on the facts and circumstances of the contract.

Determining the relative SSP for contracts that contain multiple performance obligations requires significant judgment to appropriately determine the suitable method for estimating the SSP. The Company determines SSP using observable pricing when available, which takes into consideration market conditions and customer specific factors. When observable pricing is not available, the Company determines SSP using estimation techniques, but maximizes the use of observable inputs in these estimation techniques.

The Company’s customer contracts may include variable consideration such as that due to the unknown number of users that will receive charging credits or an unknown number of sites that will receive maintenance services. The Company estimates variable consideration under the expected value method or the most likely amount method. If charging station installations are not completed by specified dates, the Company may be subject to installation penalties. The Company may also be subject to other penalties identified in the customer agreements upon failure to maintain specified network uptimes and for other contractual service requirements. Variable consideration for installation, service, and other penalties is estimated using the most likely amount method.

Practical Expedients and Exemptions

The Company elected the practical expedient to not adjust the consideration in a contract for the effects of a significant financing component if the Company expects, at contract inception, that the period between receipt of payment and the transfer of promised goods or services will be less than one year. In some cases, the Company receives payment in advance of the transfer of promised goods or services.

For contracts in which revenue is recognized over time and the entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the Company recognizes revenue at the amount to which it has the right to invoice.

The Company does not disclose the transaction price allocated to remaining performance obligations for (i) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice and (ii) contracts with variable consideration allocated entirely to a single performance obligation. The Company’s remaining performance obligations under these contracts include providing charging services, branding services and maintenance services which will generally be recognized over the contract term.

An asset is recognized for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year. A practical expedient to expense costs as incurred for costs to obtain a contract with

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a customer is applied when the amortization period would have been one year or less. Contract costs are evaluated for impairment in accordance with ASC 310, Receivables.

Contract Balances

Differences in the timing of revenue recognition, billings and cash collections result in contract assets and contract liabilities.

Contract Assets. Billing practices are governed by the terms of each contract based upon costs incurred, achievement of milestones and/or predetermined schedules. Billings do not necessarily correlate with the timing of revenue recognition such as revenue recognized over time using the relevant input method, which is generally either time-based or cost-based. Contract assets include unbilled amounts resulting from revenue under contracts when the time-based or cost-based method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Contract assets are classified as prepaid and other current assets on the consolidated balance sheets.

Contract Liabilities. The Company records contract liabilities when cash payments are received in advance of the Company’s performance of its obligations. Contract liabilities under the scope of ASC 606 include deferred revenue and customer deposits on the consolidated balance sheets. Classification between deferred revenue and customer deposits depends on whether or not the Company has commenced performance of its performance obligations.

EVgo’s contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period, when applicable. From time-to-time, the payment terms of contracts require the customer to make advance payments as well as interim payments as work progresses. These advance payments generally are not considered to contain a significant financing component.

Sales Tax Collected from Customers

As a part of the Company’s normal course of business, sales taxes are collected from customers in accordance with local regulations. Sales taxes collected are remitted, in a timely manner, to the appropriate governmental tax authority on behalf of the customer. The Company’s policy is to present revenue and costs net of sales taxes.

Cost of Sales and General and Administrative Expenses

Cost of sales consists primarily of energy usage fees, depreciation, net of capital-build amortization expenses, site operating and maintenance expenses, customer service and network charges, warranty and repair services, site costs and related expense associated with charging equipment. General and administrative expenses primarily consist of payroll and related personnel expenses, IT and office services, office rent expense and professional services.

Advertising Costs

Advertising costs are generally expensed as incurred and totaled $2.0 million and $1.6 million for the years ended December 31, 2022 and 2021, respectively.

Research and Development Costs

Research and development costs are expensed as incurred and totaled $4.8 million and $2.0 million for the years ended December 31, 2022 and 2021, respectively.

401(k) Plan

The Company has a 401(k) plan that qualifies under Section 401(k) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). The 401(k) plan provides discretionary employer matching contributions to eligible employees up to 2% of an employee’s eligible gross pay up to IRS annual limits. Employer contributions to the 401(k) plan for the year ended December 31, 2022 were $0.7 million and de minimis for the year ended December 31, 2021.