Electric vehicle charging company EVCS is raising a $20 million round, TechCrunch+ has exclusively learned.
The startup has so far raised $7.5 million of the $20 million target, according to paperwork the company filed with the SEC on Wednesday.
If EVCS can raise the rest, this round would make for a slight step up from the $18.8 million Series A the company raised in July 2022, perhaps as an extension to that round.
But the round also suggests a tempering of expectations at the startup, which reportedly explored raising $125 million as recently as this June. The funds would have helped the company add more than 2,000 fast chargers to its network.
It’s unclear how the new round is structured. EVCS did not immediately respond to requests for comment.
Most large, public-facing EV charging companies are developing coast-to-coast networks. It’s a logical approach: If a network has a sufficient footprint, the thinking goes, drivers will come to favor it over competitors, knowing that no matter where they travel in the U.S., that company will have a charger within range.
EVCS, on the other hand, has been focused exclusively on the West Coast. The company has 327 fast chargers and 686 slower Level 2 chargers at 186 locations in California, Oregon and Washington.
In California, at least, its presence is the densest in Los Angeles, and its chargers in the Central Valley are scattered haphazardly along Hwy 99 instead of I-5. (It’s possible the good real estate and grid connections along I-5 have already been spoken for.) North of the California-Oregon border, where the company has likely benefited from the West Coast Electric Highway public-private partnership, its network starts to look more consistent. The new funding round could go toward filling in gaps in its California network.
If EVCS sticks to its regional strategy, it would mimic the business model used by many gasoline retailers. Many companies have become very profitable by focusing on specific parts of the country, in part because it limits logistical costs for distributing gas. EVCS doesn’t have those same concerns, of course, since you don’t have to haul electricity like you do the fossil fuel. But EV charging does have other logistical challenges, mostly related to maintenance. Taking a regional approach, at least to start, can help keep those costs down.
For an EV charging network, the West Coast is a logical beachhead market. EV adoption is high in those states: 22% of passenger vehicles sold in California in the third quarter this year were EVs, the highest share in the country, with Oregon second at 16% in the first quarter. The population in California, Oregon and Washington tends to be concentrated on the coasts, too, and people who venture east tend to fly rather than drive.
EVCS also takes a different approach to pricing. Most companies charge per kilowatt-hour or by session duration, and some like Electrify America and EVgo also offer discounts to drivers who pay a monthly fee. EVCS also offers pay-per-use, but it heavily touts its subscription plans, which include a set amount of electricity as well as discounted per-kWh rates. It’s most expensive, at $199 per month, offers unlimited charging and is targeted at ride-share drivers.
EVCS is well on its way to completing its new round, so it’s notable that the target is lower than previously reported. It’s possible that the opening of Tesla’s network threw a wrench into the company’s plans. That wouldn’t be surprising given the timing. Reuters reported on EVCS’s pitch deck in June 2023, and Ford’s and GM’s deals with Tesla weren’t public until May 25 and June 8, respectively; other automakers’ deals didn’t start to hit the wire until July. Within two months of that deck’s creation, the EV charging landscape looked radically different.
Investors might have balked at the idea of EVCS expanding rapidly, which often comes at a cost to profitability. Instead, they might have preferred the company to solidify its existing operations, a tack that would require far less capital.
Investors may reevaluate after the Tesla wave has washed over the EV charging world and things settle down. But for now, they’re probably pushing for profitability from EVCS’s existing footprint.