Local infrastructure companies are increasingly concerned about the impact of President Donald Trump’s executive orders and other actions in the opening weeks of his second term.
At Pasadena engineering and infrastructure company Tetra Tech Inc., the Trump administration’s attacks on the federal agency responsible for implementing foreign aid programs is threatening a key business line that generates hundreds of millions of dollars annually.
Meanwhile, local companies that rely on federal funds to develop electric vehicle charging stations could face dire financial straits as the Trump administration is moving to halt federal funds for the stations.
“These announcements have had a chilling impact,” said Jon Boesel, chief executive of Pasadena-based Calstart, the zero-emission transportation consortium: “My member companies are concerned about their future.”
Boesel said some of the electric vehicle charging companies in the consortium were in the midst of raising outside funds when Trump’s executive order hit.
“Some of the companies in our consortium could face bankruptcy if this situation doesn’t stabilize soon,” Boesel said. “It will be particularly tough for the startups.”
Even more established electric vehicle charging companies like Sawtelle-based EVgo Inc. have faced a tough stretch. EVgo’s shares fell sharply in November after Trump was reelected and continued dropping in January, hitting a low of $3.10 on Jan. 22 – two days after the executive order. The stock has since recovered slightly, closing Feb. 3 at $3.45, down more than 60% from its late October peak of nearly $9 a share.
Boesel said Calstart is now pushing for increased state funding to help offset any loss in federal funds. He said he and consortium members plan to meet with Gov. Gavin Newsom and legislative leaders in coming weeks on the matter.
One proposal that is on the table is to increase the proportion of funding from “cap-and-trade” carbon emissions credit trading programs that would go toward building up electric vehicle infrastructure. The cap-and-trade program has generated roughly $4 billion in annual revenue for the past three years.
In the crosshairs over USAID funding
Returning to Tetra Tech, within 10 days of the start of the Trump administration, Chief Executive Dan Batrack told analysts in the company’s earnings teleconference call that it had slashed its current-year guidance for revenue from the United States Agency for International Development to $400 million from the $600 million to $800 million range. (The company reported $5.2 billion in revenue for its fiscal year ending in September.)
At that time, the administration had made numerous statements about ending most foreign aid programs and the USAID agency that administers most of them and had taken steps to pause funding for 90 days until a review was conducted to see if the programs aligned with the administration’s priorities.
“Now while these may seem like a lot of change in the industry, it’s not that dissimilar from what we’ve seen in temporary government shutdowns,” Batrack said. “We have seen programs that have been put on hold.”
Batrack said he was confident that much of the USAID work would be restored at the end of the 90 days due to its strategic importance. He specifically cited work in the Philippines, which he described as crucial in building up defenses in the South China Sea region against China.
He also noted that the majority of current USAID funds are going to projects in Ukraine.
But those comments were all before Feb. 3, when the Trump administration went much further in its attacks on USAID, shutting down the agency’s headquarters, sending employees home and saying plans were moving forward to merge the agency into the State Department.
Those announcements contributed to a selloff in Tetra Tech stock, which closed that day down 7% at $34.51.
