Shares of electric vehicle charging company EVgo (NASDAQ:EVGO) jumped 3.2% in the morning session after California's governor reversed a pledge to restore the state's EV tax credit, opting instead to redirect funds toward expanding charging infrastructure.

This policy shift was viewed as a significant tailwind for companies in the electric vehicle charging space. The decision to invest directly in building out the charging network, rather than incentivizing vehicle purchases, suggested increased government support for infrastructure development. This move could potentially accelerate the growth of charging station networks.

The positive sentiment was further supported by broader industry trends, including new partnerships designed to improve charging access for commercial fleets and a general rise in demand for charging stations as EV adoption continued to grow.

After the initial pop the shares cooled down to $4.62, up 2.3% from previous close.

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EVgo’s shares are extremely volatile and have had 52 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 6 days ago when the stock gained 3.7% on the news that investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge.

As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points the previous day and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets. This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels.

The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.

EVgo is up 10.3% since the beginning of the year, but at $4.62 per share, it is still trading 48.3% below its 52-week high of $8.94 from October 2024. Investors who bought $1,000 worth of EVgo’s shares at the IPO in November 2020 would now be looking at an investment worth $471.08.

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