Colorado electric commercial vehicle producer goes public amid accelerating growth

As Amazon, DHL Express, IKEA and other companies gear up to deploy tens of thousands of electric vehicles across the country, Lightning eMotors is hiring more people and expanding its production space to help meet the rising demand for zero-emissions commercial fleets.

And the fast-growing Loveland-based company sees its new status as a public company as a key milestone in the effort. The company announced May 6 that it closed on its business combination with GigCapital3, a California-based investment fund.

The combined company is called Lightning eMotors and trades under the symbol ZEV. It designs and produces medium- and heavy-duty electric commercial vehicles, including delivery vans, buses, passenger shuttles and trucks.

“Our world is demanding a transition to commercial zero emission vehicles, and being public provides Lightning the resources to scale at a fast pace,” Lightning eMotors CEO and co-founder Tim Reeser said in a tweet about officially going public.

During a tour of the company in an industrial center formerly owned by Agilent Technologies, Reeser said the most important thing about taking the company public is that “it means we have the growth capital to really accelerate the business.”

Business for Lightning eMotors, founded in 2008, has been in high drive the past few years as businesses, state and local governments commit to cutting greenhouse-gas emissions to address climate change. Transportation accounted for 29% of the emissions in 2019, surpassing the generation of electricity, according to the Environmental Protection Agency.

Amazon said it has bought 100,000 electric delivery vehicles. IKEA plans to use all zero-emissions delivery vehicles. Others signing on to go electric include DHL Express, which recently said it will use about 100 electric vans made by Lightning eMotors. In March, Fluid Truck ordered 40 delivery trucks from the company.

Lightning eMotors is adding two to five new people a week to its current workforce of 127 employees and 40 contractors. The company is in two of the buildings on the industrial campus, totaling about 250,000 square feet and has first right of acceptance on 500,000 more square feet.

In a call with investors in December, the company projected revenues of $2 billion in 2025. Last week, Reeser declined to discuss projections while an audit that is part of going public is being conducted.

But Reeser did disclose the growth in revenue the past couple of years: 300% from 2018 to 2019 and 300% from 2019 to 2020. The forecast in the company’s announcement about going public was for 600% growth in 2021.

Lightning eMotors also makes individual powertrains and provides analytics, charging technology and financing. Although the pandemic slowed some business, such as demand for passenger shuttles, Reeser said most of the company’s orders are for longer-term items.

“We’ve still been making vehicles for orders that we received before the pandemic,” Reeser said. “But also, the last-mile delivery business took off like a rocket during the pandemic.”

That business entails home deliveries, which boomed as online purchases and grocery orders proliferated.  Reeser said the industry is seeing an uptick in interest in larger shuttle buses because people are still concerned about being socially distanced.

Slashing vehicle emissions is considered crucial to meeting the state’s goals for cleaning the air and tackling climate change. The state wants to decrease emissions by more than a quarter of 2005 levels in the next five years and cut them in half by 2030.

A plan by Gov. Jared Polis calls for nearly 100% of the vehicles on Colorado roads to be electric by 2050. State regulations require carmakers to offer certain percentages of zero-emission vehicles for sale in Colorado by certain dates. Money the state received from a national settlement with Volkswagen is being spent on electric charging stations and grants for electric vehicles.

The state also requires regulated electric utilities to submit plans to support getting more electric vehicles on Colorado roads.

Legislation that would provide billions of dollars for transportation would include money for more charging stations and electrifying public transit and medium- and heavy-duty vehicles, said Will Toor, executive director of the Colorado Energy Office. He said the bill would generate almost three-quarters of a billion dollars over the next decade for the investments.

“It’s an historic investment in transportation electrification and we think it’s a key strategy both for achieving the state’s goal of a million light-duty electric vehicles on the road by 2030, but also for jump-starting the market for electric trucks and buses,” Toor said.

Reeser said the state could help boost the market by doing what the Biden administration has done: vow to make the transition to an all-zero-emission government fleet.

Toor said the governor has made it clear to all the departments that when vehicles are replaced, the first choice should be electric vehicles if the right ones are available.

Companies are banding together to encourage automakers to increase the variety and number of electric vehicles produced, said Sara Forni, senior manager of the clean-vehicle program for Ceres,a national nonprofit working with companies and investors on social and environmental issues. She said the Corporate Electric Vehicle Alliance at Ceres has 24 members, including Hertz, Lime, Lyft, Uber, Amazon and AT&T.

“The companies are working to collectively aggregate demand for electric vehicles in all segments in order to signal to manufacturers there’s a really corporate demand for those vehicles,” Forni said.

Electrifying commercial fleets is important because of the vehicles’ impact on emissions, Forni said. Medium- and heavy-duty vehicles that use diesel fuel are only 5% of the vehicles on the road, but account for more than 20% percent of the transportation emissions, according to the Environmental and Energy Study Institute.

Right now, the upfront costs of electric vehicles are higher than their conventional counterparts. A seven-year lease on a 30-passenger shuttle bus is about twice as high as one with an internal combustion engine, Reeser said.

“Another important number is that it’s about 80% cheaper to operate the electric vehicle,” Reeser added.

The fuel costs are significantly less, Reeser said. The electric vehicle never needs an oil change or air filters. Brake changes are needed less frequently. A gas-powered shuttle bus gets about 5 mpg while an electric version gets about 20 mpg, Reeser said.

The company makes about 10 vehicles a week and expects that to increase to 20 this summer.

Forni said the prices of electric vehicles are projected to be about the same as conventional vehicles by 2029. “Once zero-emission vehicles’ upfront costs reach parity with internal-combustion-engine vehicles, they’re going to be cheaper the moment they drive off the lot.”

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