Lightning eMotors has been cranking out high quality electric vehicles for years now and shortly after going public, hosted a range of customers, analysts, and media at Lightning Day 2021 at its Loveland, Colorado factory.
The day kicked off with an informative, live streamed analyst call that provided a solid grounding in the company and performance, with the usual forward looking statements rolled in. The call provided a forum for institutional financial analysts to hear from the Lightning eMotors leadership team and ask questions about the newly listed company (trading under ticker symbol: $ZEV).
After the analyst call, attendees had a chance to tour the newly expanded factory, talk with the Lightning eMotors team and even take their electric vehicles for a spin around the parking lot. I drove the Class 6 box truck last time I visited so I volunteered to drive the team of analysts around in a massive shuttle bus. I have no formal training driving a vehicle that large and was pleasantly surprised to find that it was very easy to drive and thankfully, we made it back to the factory with everyone we left with.
Lightning eMotors’ bread and butter is their ability to identify and quickly develop scalable electrified builds of niche vehicle segments in the commercial space, spanning from Class 3 transit vans all the way up to fully electric Class 6 box trucks. It is a beast of an undertaking but, after years of building their team, developing capability, finding suppliers willing to invest in electric vehicle components, and finding what feels like the perfect home in a massive campus with room for them to grow into, Lighting eMotors has emerged as the dominant player in the space.
CEO Tim Reeser explained to me that a key enabler for the entry of commercial electric vehicles into the mainstream is very simply the return on investment. If customers will make less money in an electric vehicle than a comparable internal combustion vehicle, developing a sustainable pipeline of orders is difficult. Thankfully, Tim believes the industry just moved past this critical tipping point in the last 12 months.
The single biggest variable was the price of upstream components from suppliers going down, leading to better ROIs for customers. As a result, customers ordered even more products, driving purchasing volumes up, resulting in even better numbers. “Over the last year, those of us in the space have seen prices coming down and volume going up,” Tim said.
The sharp drop in upstream component prices was driven by the tidal shift in the electrification of the broader automotive industry. “We started to see cost reductions in batteries driven by the automotive volume that’s happening,” Tim said. “We’ve been able to share in the fact that Tesla got enough volume up there to drive the price down on some of these components.”
Improved prices have translated to meaningful growth for Lightning eMotors. In the last year, they have seen a staggering 600% growth in orders and 600% growth in deliveries and Tim believes that growth is sustainable for the coming year. “We see that kind of growth being sustainable over the next several years,” Reeser said. “This growth is being driven by existing customers making repeat orders. Those same customers have said they’re going to continue make repeat orders and transition our fleet.”
They currently have an order backlog of 1,600 vehicles which will take them about a year to build based on their current capacity. Lightning eMotors plays in a very interesting space in the electric commercial vehicle segment by building a team that’s good at developing vehicles they can cost effectively build in the tens of thousands per year. This enables the company to drive scale where possible in common areas like powertrains, battery modules, inverters, and power electronics, without getting stuck in the weeds building one-off vehicles for customers.
Vehicles like Class 3 cargo vans, Class 5 and 6 box trucks, and transit bus repowers have all proved to be low hanging fruit for Lightning eMotors. They put together a handy chart in their latest investor deck that effectively communicates where they currently play and why they believe they can be successful in these niches.
Lightning eMotors has strategically identified the gaps between the other major players in the space where they can, collectively, build a rather significant number of electric commercial vehicles per year. One of those niches is, somewhat ironically, in supplying hydrogen fuel cell electric vehicle supplier Plug Power with Lightning eMotors-powered electric vehicles that have been trimmed of most of their batteries.
For Plug Power, Lightning eMotors simply builds any electric vehicle as they normally would and simply leaves out most of the batteries. One battery module remains as it’s still necessary to store power generated by the hydrogen fuel cell and for direct consumption by the onboard motor.
I asked Tim about the other niches he sees as low hanging fruit looking forward and he energetically shared a few of the key niches they’re already working to move into.
- Class A school buses
- Day Trip RVs are lucrative as electrification also enables the elimination of propane and onboard generators.
- Repowering existing motorcoaches and transit buses
- Refrigerated trucks offer the potential to electrify the vehicle powertrain and the onboard refrigeration system.
Beyond the smaller Class A school buses, Tim sees school buses as a significant opportunity for use as distributed grid storage for utilities across the country.
“School buses have this unique proposition because they drive a different drive cycle than the rush hour play,” Tim said. “Most buses can charge all night when electricity is cheap. Then they drive once per day from 6am to 8am, they sit and park until 3pm, then drive from 2:30pm to 4:30pm, then go back and park. So there’s this interesting proposition that you can use them for grid arbitrage.”
The numbers for school buses alone are staggering. “There’s 500,000 school buses in the United States,” Tim said. “There are more school buses in the United States than transit buses.” Each and every one of those buses could be tapped into at night to store excess power from the grid when it’s cheap and abundant, feeding the power back into the grid during the day when power is expensive. He didn’t make any formal announcements about larger school buses, but it was clearly something he’s passionately pursuing, if only as an intellectual exercise.
As part of our factory tour, Tim took us into a building they’re currently remodeling to serve as part of the factory. Plans for the renovation were already finalized and the team was well on its way to using the space amidst the construction.
Underpinning all their products is Lightning eMotors’ mastery of the commercial electric vehicle space. In the last year, the company saw numerous pilot projects convert to sizeable orders. Repeat orders are the ultimate proof that a product is up to snuff (or not) and Lightning eMotors is swimming in repeat orders this year. That’s a testament to the quality, durability, and utility of their electric vehicle offerings. It takes more than a simple corporate or government mandate to “go green” to get fleets to upgrade more than a handful of vehicles to fully electric vehicles.
“Sustainability is a key aspect of our business, but I don’t want it to be the only reason people buy our product,” Tim said. “I want them to buy it because it’s fundamentally a better product. The passengers like it better, the drivers like it better, the people on the curb like it better. And yes, by the way, it’s sustainable, carbon offset and everything else. I’m really a fan of making fundamentally better products.”
For more information about Lightning eMotors, head over to their home on the internet, follow them on Twitter, or stalk them remotely by spending far too much time perusing the pages here at CleanTechnica.
All images credit: Kyle Field, CleanTechnica
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