EVgo, Inc. (EVGO) CEO Cathy Zoi on Q1 2021 Results - Earnings Call Transcript

EVgo, Inc. (NASDAQ:EVGO) Q1 2021 Results Conference Call March 11, 2022 11:00 AM ET

Company Participants

Ted Brooks - Vice President of Investor Relations
Cathy Zoi - Chief Executive Officer
Olga Shevorenkova - Chief Financial Officer

Conference Call Participants

Maheep Mandloi - Credit Suisse
Ryan Greenwald - Bank of America
Andres Sheppard - Cantor Fitzgerald
Bill Peterson - JP Morgan
Oliver Huang - Tudor Pickering Holt

Operator

Greetings, and welcome to EVgo First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I will now turn the conference over to your host, Ted Brooks, Investor Relations. Thank you. You may begin.

Ted Brooks

Hi everyone. Welcome to EVgo’s first quarter 2022 earnings call. My name is Ted Brooks and I head Investor Relations of the Company. Today’s call is being webcast and can be accessed from the Investor section of our website at investors.evgo.com. The call will be archived and available there. And the Company’s results, investor presentation, and a transcript of today’s proceedings will be available at the Events & Presentations section of the Investors page after the conclusion of today’s call.

Joining me on today’s call are Cathy Zoi, EVgo’s CEO; and Olga Shevorenkova, the Company’s Chief Financial Officer.

Today, we will be discussing EVgo’s latest financial results for the first quarter of 2022, followed by a Q&A session. During the call, management will be making Forward-Looking Statements regarding the 2022 fiscal year and our outlook for expected growth and investment initiatives.

These forward-looking statements involve risks and uncertainties, many of which are beyond our control and could cause actual results to differ materially from our expectations, including among other risks and uncertainties, the severity and duration of the effects of the COVID-19 pandemic.

These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call. For a more detailed description of factors that could cause actual results to differ, please refer to our Form 10-Q filed soon with the SEC and posted to the Investor section of our website.

Also, please note that certain financial measures we use on this call are on a non-GAAP basis. For historical periods, we provide the reconciliations of these non-GAAP financial measures to GAAP financial measures, and the investor presentation can be found on the Investors section of our website.

With that, I will turn the call over to Cathy Zoi, EVgo’s CEO. Cathy.

Cathy Zoi

Thanks, Ted, and good morning, everyone. EVgo had a strong first quarter advancing our position as the nation’s most expansive public fast charging network for electric vehicles. Our results, including the recent partnerships we have signed, demonstrates the advantages of being a pure play EV charging company with a robust and rapidly growing DC fast charging network.

Our ability to drive technological innovation and deliver new products and solutions for both consumers and partners alike will continue to provide us with a competitive advantage in an exponentially growing EV charging market.

First quarter of 2022 shows that we are on the right path to achieving this growth. EVgo realized revenue of $7.7 million and 86% increase compared to the first quarter of 2021 with throughput growing by 95% to eight gigawatts hours relative to the same quarter last year. We ended the quarter with 375,000 customer accounts, which represents a 51% increase over the first quarter of 2021.

Q1 of 2022 was EVgo’s best quarter ever for operational and mobilized charging stalls, representing a 166% increase in newly mobilized and newly operational stalls when compared with the first quarter of 2021. Newly operational stalls in the month of March alone exceeded every previous full quarter, except for one.

Total stalls in operation are under construction reached approximately 2100 at the end of the first quarter, putting EVgo on track to achieve our full-year target. We achieved this impressive performance, despite continued headwinds from supply chain issues and inflationary cost pressures.

We increased our active engineering and construction development pipeline in important progress gauge for our business to more than 3300 stalls, which marks a considerable jump from the 1500 stalls in the end of the first quarter of 2021. This growth in the funnel has been substantial largely due to the experience of our team and EVgo’s reputation as a dependable partner.

EVgo has been scaling operations to capture the demand growth for fast charging. We have focused both on increasing the size of our development pipeline and the capacity of the sites themselves, both in terms of stalls per location and power level of the chargers.

OEM have started to produce EVs with bigger batteries with more powerful charging capacities, and they intend to sell off of them. In anticipation of this market evolution, EVgo’s standard station configuration will be built with 350 KW charging and at least six stalls and more if the site hosted utility grid can accommodate it. This is an exciting development for the overall EV industry.

Turning to business development and new partnerships. In the last several weeks, we have signed and announced partnerships with Toyota and Subaru, growing our list of OEM partners. Together, our OEM partners are responsible for more than 40% of vehicle sales in the U.S.

Those partnerships are moving into the implementation stage with software and marketing integrations underway as Subaru has announced pricing for the Solterra and begun making orders available to reservation holders. Both Toyota and Subaru anticipates delivering new EV models in Q2 and Q3 of this year.

EVgo also entered into a partnership with Chase Bank to add DC fast charging stations at many of its retail banking locations across the U.S. and we already broke ground at the first chase site that will host EVgo fast charges in Indiana, continuing to make charging more convenient and accessible for drivers.

On the site host front, we also went live with our first five EVgo fast charging site at expanding our presence in the Midwest as EV’s increase in popularity across the country. EVgo also opened news sites with existing retail partners like Wawa, Whole Foods, and Alberton Safeway, and with bricks more and Regency shopping centers in Marcus from Worcester Mass to Tacoma, Washington.

EVgo also launched the implementation of a data sharing and roaming agreement with Shell Recharge Solutions, which provides drivers with accounts on either charging platform, access to the others’ network. Agreements like these enhance the interconnectedness of the charging ecosystem and put drivers first, making it easier for them to find a fast, reliable charge.

This latest agreement allows EVgo drivers access to approximately 50,000 charging stations across the U.S., and brings drivers using the shower recharge solutions, charging apps the EVgo network, further increasing our throughput.

Demonstrating the broadening geographic diversity and wide reach of EV, EVgo also announced a partnership with the City of Portland, Maine building on our long history of serving as a partner of First Resort to deliver innovative charging solutions to forward leaning municipalities.

This new partnership will bring EVgo fast charges and level two charges to city controlled properties and provide a direct commercial relationship with the City of Portland municipal fleet vehicles, helping to accelerate their ability to reach their sustainability goals.

Fleet beyond municipalities continue to take advantage of the benefits EVs can offer. And this week, the EVgo team is exhibiting at the ACT EXPO in Long Beach, California. It is kind of like the Woodstock for clean transportation, where we are highlighting EVgo Optima and our other customized charging solutions for fleet and - like.

This past quarter EVgo and Uber launched a new joint marketing program, including direct in-app messages to drivers on the Uber platform, informing them of the special pricing available to them on the EVgo Network.

Those efforts are yielding real results, as monthly EVgo throughput from drivers on the Uber platform increased by almost 50% in April, from the average first quarter usage this year. Also during the quarter, we continued successfully securing funding awards from governmental agencies and utility partners we worked with across the U.S. including the California Energy Commission and New Jersey’s Public Service in Electric and Gas, as well as many others.

EVgo continues to deliver software-driven ancillary services like EVgo Advantage and EVgo Reservations, which have demonstrated solid success and provide us with a competitive differentiation in the charging market.

We have observed a steady increase in customer demand for reservations and have doubled the number of EVgo locations, where reservations are available. We are now offering reservations at nearly 50 sites across 7 different states in the U.S. and plan to roll out the offering more broadly. We currently charge $3 per reservation with a $2 no-show fee. Such services have the potential to be highly accretive to our financial profile, as these fees fall directly to the bottom-line and enhance our margin profile.

As EV penetration grows, we expect to offer a wide array of ancillary software-driven services that like reservations that need EVgo Advantage, set EVgo apart and allow us to efficiently monetize driver interactions.

Also in the software vein, in the last quarter, we launched EVgo Inside, a suite of application programming interfaces that enable third-parties to embed the full EVgo charging experience into their own applications.

This capability allows third-parties like auto OEM to provide holistic experiences for their new EV owners that include the complete EVgo charging experience. As an example, we are currently working with Toyota as they leverage EVgo Inside and build their integrated driver application within the Toyota app.

As you can see, this quarter, we have been executing on each and every element of the business that makes EVgo stand apart. Infrastructure build out in locations where drivers want to charge, partnership development with marquee names in the transportation space and addition of value-creating software services, that delight our customers and partners alike. We are excited to build on this momentum in the quarters to come.

And with that, I will turn it over to Olga to discuss our financial results. Olga.

Olga Shevorenkova

Thanks, Cathy. I will begin with a review of the key operational highlights. As Cathy noted, stalls operational or under construction were 2110 at the end of the first quarter, with a total of 1772 stalls being in operation and 338 under construction. This is a 23% increase from the first quarter of 2021.

Our active engineering and construction development pipeline more than doubled year-over-year to 3,344. Altogether during the first quarter, we placed stalls into operation in 12 different states. For example, aside from California, we have been active in Michigan, Ohio and North Carolina to name a few.

We extremely focused on exhilarating the pace at which sites are selected, developed, constructed, and commissioned, while making sure that we retain our profitability and return targets.

EVgo continues to work collaboratively with others in the charging ecosystem, utilities, government, side hosts, and equipment suppliers to get the charter development flyable spinning. And that illustrated by EVgo’s banner months in March, we are making progress in shrinking those development timelines.

In parallel, though, we are implementing a variety of process improvements internally that are already bearing fruit in terms of cost and time savings. Notable among them is the use of drones to speed up and automate part of the site survey process. By increasingly utilizing drones instead of physical onsite walks, EVgo can achieve the same or better information accuracy at a much lower cost.

As a result, our overall survey activity in the first quarter increased by almost 25% as compared to the fourth quarter of 2021. Network throughput was eight gigawatts hours for the quarter with March being our highest throughput months in the history of EVgo.

As a reminder, vehicle miles traveled for both IC and the electric vehicles have some analysis with the spring and summer being the busiest time on U.S. roads. Volume tends to fade in the fallen winter, usually bottoming out in January and February.

While with sort saw a repeat of that trend in this year’s first quarter, coupled with the Omicron spike at the beginning of the year, and fleet throughput volatility, we still delivered network throughput that was 95% higher than the first quarter of 2021 as more consumers in the U.S. transition to EVs and the COVID recovery continues.

Turning to financial results, we reported $7.7 million of revenue in the first quarter of 2022, which represented an 86% increase over the first quarter of 2021. Charging revenue was up 66% over the first quarter of 2021. Ancillary revenue was up 265%, and regulatory credit sales were up 142% over the same period.

In charging revenue, retail growth was the main driver posting the 94% increase. Ancillary revenue continues to benefit from the addition of block share - July, 2021. It is worthwhile to dive a bit further into the realized increase in regulatory credit sales during the first quarter. As many of you know, pricing of LCFS credits has come down in the last year.

We have historically had a two quarter lag between generating and monetizing these credits, but beginning in the first quarter, we have a new trading partnership that allows us to reduce the lag to just one month.

This means that for the first and second quarters of 2022, we will be bringing forward five months of credit monetization. So you should expect an elevated regulatory credit sales line from us for Q1 and Q2. After that, we expect the line item to normalize.

Adjusted gross margin was 37% for the first quarter and benefited from this regulatory credit sale acceleration. Even without the benefit reference, we estimate our adjusted gross margin would have been 29%, an increase of approximately 10 percentage points from the first quarter of 2021.

As expected, CapEx has increased materially year-over-year as our pace of charter deployment has accelerated significantly. G&A expenses remain in line with our expectations. We reported adjusted EBITDA of negative $18.2 million, which was in line with our expectations as well.

We started the year consistent with the ramp up as expected and are on track to achieve our financial and operational guidance for full-year 2022. We look forward to seeing many of you in the coming weeks.

That concludes our prepared remarks. And with that, I would like to turn the call back to the operator to open up the line for questions.

Question-and-Answer Session

Operator

Thank you [Operator Instructions] our first question comes from Maheep Mandloi with Credit Suisse. Please proceed with your question.

Maheep Mandloi

Hey good morning everyone and thanks for taking my questions here. Just on the guidance itself. Could you just talk about the drivers over here? I think on the last call we talked about recovery and ride share kind of providing some upside over here. So, just given fight check companies themselves expecting a faster growth here. Do you see some growth on that end? And then I have some follow-ups here. Thanks.

Cathy Zoi

Hi, Maheep, Cathy here. So we do expect overall everything to be ramping back up during the course of the year. So we expect the ride share recovery to continue. We expect the EV sales to rise. We expect the EV penetration to rise.

So as you know, like our business model is tied to the through put on the network is tied to the number, the amount of EVs being driven on the roads. So the COVID recovery we expect to continue of pace.

Olga do you want to add anything to that?

Olga Shevorenkova

Right. Especially I would like to emphasize that our throughput especially sensitive to the number of EVs of our OEM partners driving on the road, such as GM, Nissan, Toyota, and a few others. So we get a higher share of those drivers. And again, especially sensitive to those and we are monitoring how the sales are unfolded.

Maheep Mandloi

Got it. Thanks for that. And just like on the high level from a Federal incentives point of view or State incentive, could you just remind us what - where are we - what is the status of the infra build and expectations on kind of like some of that money kind of flowing through the difference date here?

Cathy Zoi

Yes, you bet. So, again, the $5 billion infrastructure build money is not likely to start to flow until the end of this calendar year at the earliest. So where we are in the process Maheep is that the states are now preparing their plans, their individual plans for implementation based on the guidance that the Federal Government produced, I think it was in March.

And those plans from the States are due August 1^st. And then the Federal Government has to review those plans and has undertaken to provide a yes, no, that works with what we want, by the end of September, I think it is. So that is all sort of happening right now.

In addition, the Department of Transportation is meant to issue technical guidelines on the program. Again, they were supposed to come out on this Friday. We hear keeping kind of the runways in Washington that may be delayed just a little bit, but those are technically specific guidelines.

What our team at EVgo has been doing is we have been liaising with State DoT as they think about their own individual state plans. And the feedback that we are getting is some of EVgo’s own best practice documents, our Connect to Watts program has been very, very helpful, particularly to those states that have not had much experience to-date in deploying fast chargers.

So we are actively engaged. We are really excited about this. But again, it is not necessarily going to be material financial close until end of the calendar year at the earliest.

Maheep Mandloi

Got you. Thanks for that clarity. And just like one last housekeeping -.

Cathy Zoi

One other additional point that I should make about Federal stuff, which is so that is the $5 billion infrastructure money known as NEVI. There is the other part of it, which again, the formerly referred to as build back better. This was the package of incentives that got stuck at the end of last year that Senator Manchin held up.

Again the latest is that there may be a deal to be struck on tax incentives, with Senator Manchin coming on board. And that would include both 30-C and 30-B. So 30-C is the tax break for building the infrastructure and 30-D is the tax incentives for individual purchases of EVs.

And again, our folks in D.C. are hearing that, there is potentially a deal that the terms of which could conceivably be agreed to by Memorial Day. Now it wouldn’t become law that quickly, but where everybody kind of sad, depressed, the thought this isn’t going to happen.

There is now a new cautious optimism, I would say, floating around policy circles that indeed this might go ahead. So that again, that will accrue to EVgo benefit, but we haven’t modeled it that [indiscernible].

Maheep Mandloi

That is interesting. Memorial Days is probably the timeline for that, right. At least in terms of negotiation, if not the final one.

Cathy Zoi

Yes, in terms of the negotiation.

Maheep Mandloi

Alright. And one last one on housekeeping on that $7.7 million number, Ogla can you just remind us the regulatory credit. Is that part of that 7.7 or is that in addition to that 7.7? And how should we kind of think about seasonality on an annual basis? Thanks.

Olga Shevorenkova

So $7.7 million rev - it is a GAAP revenue, which we reported this quarter, so it includes regulatory credit sales. So, roughly $1.4 million, we don’t give a specific guidance on, how much of specifically regulatory credit sales we expect to happen this year, included in our overall guidance, which we have regulated.

But we are looking at a bit of a lower credit, the price for credits right now, they have actually been going up in the last few days. But it counter balanced by us changing the methodology by which we recognize the credits, as I described earlier. So net-net, we are looking at a similar number for the two years, we were looking at a few months ago.

Maheep Mandloi

Got it. No really helpful. Thanks a lot to everyone and talk to you soon. Bye.

Cathy Zoi

Thank you.

Operator

[Operator Instructions] Our next question comes from Ryan Greenwald with Bank of America. Please proceed with your question.

Ryan Greenwald

Good morning team. I appreciate the time. Maybe just starting with throughput for the quarter. Can you unpack that a bit more, it looks like 2% sequential drop despite AF DC data suggesting 10% plus increase in stalls. How much do you guys kind of attribute this to seasonality any noticeable pressure from competition and I know you guys alluded a bit to other factors as well, but if you could just kind of quantify that a bit more?

Cathy Zoi

Olga. Do you want to - you and I have been talking about the unpacking of this, do you want to take that?

Olga Shevorenkova

Yes. Sure. So this just a reminder, the number of stalls is not as a thrown of a driver of throughput for everybody, not just us. The key inputs into how much people are charging is how many cars are there and how much they are driving.

Those are absolutely key, so that is I think explains why you see the increase in number of stalls, including you on our network, where you see flat slight decrease in the overall throughput. So the reasons for it, the seasonality January and February the lowest months in terms of vehicle miles traveled in the United States, whereas it increases by the time it is summer.

Then another thing is Omicron, the December and January, both months were actually affected by Omicron serge and you can look at better data points, so looking at an open table, for example. And how much restaurants bookings have planned in December and January, and we saw that really represent magic for the demographics, which uses our network.

And we saw that January, it is in the normal year would be slower than other month. But here it was accentuated by Omicron serge where most people - a lot of people were sick and they were not driving.

And I think, we published the graph in our presentation, which clearly show in January and February below, February also had 28-days compared to January in compared to March, but if you are just February for 31-day already will see a recovery by the end of February. And then you clearly see, how much we recovered in March. And that is associated with even kind of a temporary easiness.

We will observe COVID it goes on, but March was - I think COVID in March was slightly suppressed. So people went back on roads and also seasonality played a role where by the time it spring people just drive more.

And another reason is fleet volatility in some of our dedicated contracts, just a reminder, we have take or pay contracts with autonomous vehicle partners, where it doesn’t matter how much they use. They pay us some form of a floor. And those guys, they are still in a testing mode, and they ramp their usage up and they ramp their usage down, and they don’t have a consistent usage part just yet. They also shift their cars around just as a function of where they are in their development cycle.

And we just saw a little bit of a decrease on their front throughout January, February as well, which is now recovering, but that is really - we don’t have much insight into their tested departments. It obviously doesn’t affect our revenue, but it affects our throughput as well. And that complemented the Omicron and seasonality on the retail side

Ryan Greenwald

Got it that is helpful. Any color you guys can provide around same stall economics and utilization versus comparable periods?

Cathy Zoi

Sorry, say that again, Ryan.

Ryan Greenwald

In terms of just the same stalls on an apples-to-apples basis without the additional capacity here, can you help kind of frame utilization and profit per stall first comparable period, even just kind of one Q 2021?

Olga Shevorenkova

Yes. So, maybe just to take a step back when you add - when you add a stall to the network, it doesn’t necessarily mean that that stall by itself comes with some additional utilization. You are kind of looking at the overall market and our research and data analysis indicates that people kind of risk spread themselves as you wish. And the growth really happens when people start driving more or when you add new cars to the market.

So looking at a same stall basis as it is not how we will look at our network, we are good in depth analysis about the utilization percentage and how it is being driven. Because if you add too much capacity, but your traffic hasn’t grown at the same rate over the period you are looking at, you will see some utilization drop and we will look at it region by region, this is not the level of detail we would like to disclose at this time.

But frankly, I’m not sure that would be that useful for your purpose useful for us and for our network development activities, which we are doing by utilizing that data and learning from it. I think what is important is there are more EV sales, definitely Q1. We saw strong EV sales, despite all the challenges, we hope that trend continues.

We saw a very great recovery in March, which is indicative of again, recovery of the users, but also additional EV sales. And we think those are all positive news, the same stall utilization is a bit of a foreign concept of how we are looking at it, but I’m also not sure that that is going to be helpful for your overall model and purposes. But let me know if you would like to unpack version.

Cathy Zoi

Yes. I mean, Ryan, as I think about it, like in a fast growing market, like this I’m kind of withhold, I’m not sure what that level of that precision would be useful for either for you or for us. We tend to look at the overall sort of profitability in a network basis as a number of EVs on the road growth and that is what actually really, really matters to us at the end of the day, so.

Ryan Greenwald

Any color just on regional utilization overall versus last year?

Cathy Zoi

Sure. I mean, look, as we talked about it in our last call, California’s profitable and we have a number of other profitable regions that are interesting in like Portland, Denver. What were the other cities that we highlighted Arizona, Phoenix. Phoenix is a great market.

And I would, I would venture to say that a year ago, that wasn’t the case. So that is absolutely a function of the penetration rising in those metropolitan areas and us having a good stable of charges to meet that demand.

Ryan Greenwald

Understood. Got it. I will leave it there. Thank you so much for the time.

Cathy Zoi

Thanks Ryan.

Operator

Our next question comes from Andres Sheppard with Cantor Fitzgerald. Please proceed with your question.

Andres Sheppard

Hey good morning guys and congrats on another great quarter. I was just wondering if you could maybe expand a little bit on the revenue seasonality for the remainder of the year, right? So you have reaffirmed guidance, which is great. I’m just wondering, should we kind of assume the next two quarters to continue to ramp up and maybe Q4 to be a little bit less than the previous ones, or better to kind of assume increasing revenues quarter-after-quarter?

Olga Shevorenkova

Sure. That is a good question. We are simultaneously dealing with the seasonality and also the rate at which EVs are being added to the network. So those - and sometimes in those particular months, when there a lot of it is been were added on the network, it could mass seasonality and vice versa.

So, it is not enough for some reason, because they are not even months-to-months, sometimes when EVs the number release, which got edited to the network wasn’t as high. But, this is analogy which show the higher months, you will get a average month.

So those two play in together. And frankly, we have some ideas about how EVs are going to be added to our network, but obviously those forecast, which are outside of our control. So, I would be caution on making statements that Q2 and Q3 will be very high and then Q4 will go down.

They might not be the case. I’m looking at various different scenarios, but in general we could definitely expect that summer is very strong because of the driving patterns. And you would see some elevation. How Q4 play out, the time will show it. It is a little bit difficult to say right now.

Andres Sheppard

Got it. That is very helpful. Appreciate it. And maybe for my follow-up. I’m wondering if you could maybe expand a little bit on EVgo eXtend. I think it is a very interesting addition to the business model. And so, I’m just wondering if you can maybe add a little bit more color there or when should we expect to hear more about it? When does that kind of start to ramp up? Any color there would be helpful.

Cathy Zoi

Sure. So we talked a bit about what, what EVgo eXtend is for the other listeners, in the last call. For the other listeners, EVgo eXtend is a kind of a branding of the service that we provide where EVgo goes and identify some sites that are great to construct, operates and operates chargers, but the assets are actually owned by the site host, if you will.

And there is a giant opportunity. I mean, as you know, what EVgo does is we only build sites where they pencil to double-digit returns and part of that is a function of utilization, et cetera, cetera.

With the Biden Infrastructure money focused on rural areas in particular and corridors, which don’t necessarily have great utilization in the near-term, but there are a number of site hosts who want to participate in the electric vehicle charging infrastructure, the growth phenomenon.

They might be interested in owning the assets, where we actually don’t want to take the risk on utilization, but we want to be able to add those stations to our geographic footprint and earn some revenue from them.

So what we are, we lost EVgo eXtend, which is that business model. So those site hosts will have EVgo operated chargers on their locations, and we will collect money to do the EPC and to keep those on our network overtime. So, it is a great revenue accretive stream.

We are, as I alluded to in the last call, we are in advanced conversations with a number of really interesting partners. And we will, when those deals are inked, we look forward to sharing them with you.

But it is a very, very exciting way for EVgo to extend its reach to grow our revenues at sort of a very sort of - without exposing ourselves to any sort of utilization risk in places where we are not confident the utilization will necessarily be the way the business model will work the best. So stay tuned on we’ll come at you as soon as we can with it specifics.

Andres Sheppard

Thank you very much Cathy, that is very thoughtful. I appreciate it. I will pass it on. Thanks again and congrats on the quarter.

Operator

Our next question comes from Bill Peterson with JP Morgan. Please proceed with your question.

Bill Peterson

Thanks for taking my questions. Nice job on the quarterly results. My first question is you mentioned the account increase to I guess approximately 375,000 looks like a 30K increase. Can you share how many customers came as a result of OEM and ride share customers? And I guess the second part is looking ahead, I’m curious on VP business from customers that have accounts to OEM partnerships, for example, can you share any metrics of customer usage of car owners, such as I think like Nissan, where the first year credits goes away, have expired just trying to get a feel for the stickiness of the business, as we think about these partnerships?

Cathy Zoi

Olga, do you want to take this one?

Olga Shevorenkova

Sure. So the vast majority of those 30,000 - 35,000 say are retail customers. We don’t disclose the exact fleet between OEM and kind of normal retail, but retail is still an overweight on fleet with ride share customers, the number will be very small, but they bring a lot of traffic, so they have an out outside effect. But I would think about it as about majority retail for now.

And the second question. It is so if you could repeat it, because I had a hard time to process the questions as long. Repeat it though.

Bill Peterson

Yes. You have a lot of great partnerships with ones like Toyota and Subaru and older ones like with Nissan, but I remember Nissan, I think was like a one year program. So they come off right? I kind of trying to understand like these guys stick with EV go after their sort of complimentary charging comes off.

Olga Shevorenkova

Yes. So the Nissan was a two year program. So one was one extension, but yes absolutely. They do stick around. We see this in our data. It is a great acquisition channel. It is very early to Subaru on Toyota because those cars are not - our network yet, but we do expect the same effect and we expect the same effect from our General Motors customers, when General Motors that is selling their cars are Nash.

And all of our contracts will get the full use. We will see the same effect. So we love those partnerships precisely because it is a great sales channel, because early data shows us that people do stick with the initial charging provider.

Bill Peterson

Okay. Thanks for that. And I will also have a question on seasonality, not so much, I guess, for the retail or network throughput, but I think you mentioned that you are going to see an outsized portion of all CFS credits coming in the first half of the year, but what is - does it go I’m just trying to get a feel for how that, how we should model that for the full-year, maybe more importantly, longer term. I mean, I assume we should assume some compression, but any sort of color you can provide on I’d say the other non charging related portions of your seasonality.

Olga Shevorenkova

Yes. So it is kind of actually even easier to model that business line now. Because we used to recognize the [LTFS] (Ph) revenue regulatory, the credit sales revenue took waters after those credits or kilowatt hours were generated.

We now have an offtake agreement with the third-party provider where they get or we record revenue one month after we have been generated. So when you - one month, just call it immediately. So, that it depends on how much kilowatt hour was generating California. And it is around 65% to 75%. It fluctuates but it is around that.

And then, the amount of revenue will record will be super proportionate to those California kilowatt hours and Q1 and Q2. We kind of using both methods where we recognize those - California kilowatt hours, as they come in and we sell the balance, which we had from past quarters that creates a bit of an elevated number in Q1 and Q2.

But then Q3, Q4, it is actually pretty easy California kilo hours, which is a certain percentage of total. And that correspond into how many credits - how much revenue we book in a proportionate way?

Bill Peterson

Thanks for that. I appreciate it.

Operator

Our next question comes from Oliver Huang with Tudor Pickering Holt. Please proceed with your question.

Oliver Huang

Good morning everybody and thanks for taking my questions. The current year end target for under construction and operational DC fast chargers implies a fairly steep ramp. And I know it is tough given certain timing aspects that are beyond your control, but was hoping to get a bit more color on the expected cadence of installs and construction as we kind of move through the rest of the year or anything really that might help provide the market confidence in being able to achieve your reiterated for your charger count outlook from this morning.

Cathy Zoi

Yes. So I think what you have to do is you kind of have to go all the way up the funnel. So we have got a really large engineering and construction or active EMC pipeline as we call it, which then feeds into what is going to get mobilized and then energized by the utility.

So it is large. I think what this is starting to say, and you have heard me talk about this before Oliver is the flywheel spinning. When we first came out of the public company, the data we gave it that takes 18-months on average from my idea of having a station at a location to utility energization, with my Cathy Zoi Aspirations to getting it down to six months. And we are not at six months yet.

But we are starting to see the processes pick up in many jurisdictions. And so we are - we have got that confidence that with our banner month in March and again, that is everybody pulling together and the attire, it takes a village to build chargers. The utilities are coming together. The local government authorities, the site host are super excited. We have a lot of confidence that that is going to continue to ramp so that we can actually reach our year-end target.

And we feel confident that we are on track to do that because of the pipeline, because of the speed with which things are picking up in every stage of that process. It still takes us four to eight weeks to do the construction, but the bits on either side of contracts signing with between site host and utilities for easement, utility energization time tables, all of those sorts of things. So that is actually the good news side.

Oliver Huang

Thanks that is very helpful. And for a second question, just operationally, any color on what the average rate of acceptance that you are seeing today, relative what you all kind of spoke to last summer? Just kind of given the greater mix of upgraded the theses as there have been more of those entering the vehicles and use mix and just higher powered capability of your newer charger ads and any change in terms of the timeline of being able to hit that 80 or so threshold.

Cathy Zoi

Rate acceptance.

Oliver Huang

Yes, the rate of throughput that you are seeing on average. I think you all spoke to it being in the low thirties previously in the summer of last year.

Cathy Zoi

Do you mean charge rates?

Oliver Huang

Yes.

Cathy Zoi

Okay. Got it. Got it. So we do see the charge growing slowly but steadily. So every single month, it goes up and I was just this morning looking at the analysis, showing that, if you look at the charge rate of people who joined in the last five months, versus everybody else, they are quite a bit 15% higher on charge rate, than everybody before.

And then also when you look at the charge rate on our higher power 350 charges, which is mostly what we are deploying right now, the charge rate is nearly double, a little bit less than double versus on 50 kilowatt charges.

So we absolutely see the rise of the charge rate and we expect that to go up with new models, being introduced to the market and just dominate and circulation so, that absolutely goes as planned.

Oliver Huang

Perfect. Thanks for the time.

Operator

Our next question is from [Noel Parks] (Ph) with [indiscernible] Please proceed with your question.

Unidentified Analyst

Hi. Good morning. Just want to touch on a couple things and I apologize if you touched on this earlier. But I was curious if you could talk about the sales cycle for the fleet market. And I wonder within your organization, is there a dedicated group or team that has that as its primary focus or is it essentially within just the broader sales effort?

Cathy Zoi

You know. We do have a dedicated team. We have a dedicated fleet BD team and many of them are in Long Beach right now at the [indiscernible] conference where everybody who does anything on fleet is on an annual basis.

And so, the sales cycle, it is a great question, the sales cycle tends to be a bit longer for a couple reasons. One is that, the fleets themselves have not been able to access EVs. So, they have been kind of sitting - they had until kind of maybe six to nine-months ago, and they are kind of sitting on the sideline saying, well, I’m not going to worry about infrastructure until I get my vehicles.

They now have had the, aha, realization that they need to be planning these things concurrently. What most of them are doing is they are doing either small pilots or they are doing RFP. So, EVgo has been very, very busy over the past few months, responding to RFPs and that process is a multi-month sort of process to get responses.

So, we have got lots and lots and lots of irons in the fire. And as soon as something happen, we are be excited to tell you about it. But I can tell you that, the reception that we are receiving from a combination of our EVgo Optima software, when we demo it for fleets, and when those fleet providers come and visit our innovation lab and also - which is something follow yet.

As I said, really, really, really well received our expertise at operating a public network where our financial success is predicated on making sure that it is up and running is expanding as a good stead with fleet providers as they consider who they want to partner with on their own fleet operations and electrifying.

Unidentified Analyst

Great, thanks. And I wanted to turn to the big pile of money that is the Federal Infrastructure bill. And I have been hearing, a little bit here and there about the process of, I guess, the states, that they can then use to sort of come up with their own sort of allocation and distribution criteria. Could you talk about that? And I’m just curious if in your own modeling, you sort of envision a time horizon when that funding will actively be in play?

Cathy Zoi

Yes. So we EVgo, helped - we used our experience in liaising with the Federal Government before it issued those guidelines that came out in March. So we felt like the general guidelines that were issued by the Federal Government.

Again, their guidelines, they are not rules per se. Their guidelines to give to the states was pretty well inform. What we are now doing is we are liaising with the states is they develop their more detailed program design.

And again, our team, our market development and public policy team is feeling pretty confident that this - most of the states are looking at what happens in the real world and what will bode well for success of electrifying transportation.

So we are fingers crossed again that these program designs that are going to come from the states are going to be really pretty grounded in what was what is going to be successful. So that is the good news.

On the timing, again, we talked a little bit about this earlier in the call. We don’t expect that the money will shake loose until at the end of this calendar year at the earliest. And so we haven’t modeled that we are going to get anything like before that time anyway.

So we are what you see in our guidance is not predicated on accessing that Federal money to the extent like there are existing grant programs at the state and with utilities that we know about that we have access to that are included in what our plans are for this year, but the Federal Government money when it flows is upside.

Operator

We have reached at the end of the question-and-answer session, and this concludes today’s conference. You may disconnect your lines at this time, and we thank you for your participation.