Montreal-based electric vehicle (EV) charging company Flo has reportedly lost access to the largest EV charging markets in North America, facing significant setbacks in California and New York. These exclusions stem from the company's inability to meet updated payment processing standards and follow the alleged withdrawal of a multi-million dollar contract by General Motors (GM). The developments underscore the intense competitive pressures and evolving regulatory demands within the rapidly expanding EV charging infrastructure sector, posing substantial challenges to Flo's North American expansion strategy.

According to The Logic, Flo's charging technology became ineligible for new installations in California as of July 2023 due to its prior inability to process credit card and contactless payments. California, a pivotal market with 1.1 million electric vehicles and a population of 39.5 million, requires such payment functionality for new public charging infrastructure. While existing Flo chargers installed before the rule change remain operational, the company's spokesperson, Maude Blouin, confirmed that their new generation of chargers are now equipped with integrated credit card readers.

The challenges extend beyond California. Flo has also been removed from Charge Ready NY 2.0, a US$12 million New York state program designed to subsidize public and private charging station installations. The New York State Energy Research and Development Authority (NYSERDA), which manages the program, stated that Flo's equipment and network services 'did not meet the updated rules,' leading to its delisting. This decision, effective after July 2023, does not, however, preclude Flo from other state charging programs.

These market access issues are compounded by internal corporate challenges. The Logic reported that General Motors withdrew from a multi-million dollar contract to purchase Flo's charging equipment in 2023, leaving Flo with an estimated $10 million in raw materials. This significant financial blow coincides with recent layoffs of 80 employees and the closure of Flo's manufacturing plant in Shawinigan, Quebec, as reported by La Presse. The company's workforce has reportedly shrunk from approximately 600 employees in 2023 to 255.

Founded in 2009, Flo operates over 140,000 charging stations across North America. The company has secured substantial funding, totaling $471 million in equity and loans since 2021, including a $136 million Series E round led by Export Development Canada. Other notable investors include the Caisse de dépôt et placement du Québec, Investissement Québec, Business Development Bank of Canada, Energy Impact Partners, and MKB. Despite this capital infusion, internal company documents obtained by The Logic indicate that curbing cash burn rates and R&D investment are crucial for Flo's path to profitability. The documents also highlight challenges such as lower near-term EV adoption rates and the capital-intensive nature of its manufacturing operations, which could limit investor appeal.