Lightning eMotors, which designs and manufactures electric vehicles for commercial fleets, has reached a $850 million deal to provide electric power systems for shuttle buses manufactured by Berkshire Hathaway.
After news of an agreement with Forest River Inc. came out, Loveland-based Lightning eMotors (ZEV) shares soared by more than 80% on Tuesday. By late afternoon, the stock price reached $11.60 per share.
The agreement with Elkhart, Indiana is Lightning eMotors' largest transaction to date, but it is not the first cooperation between the two. Tim Reeser, Lightning's co-founder and CEO, said that one of the company's first hybrid vehicles was a shuttle bus to Forest River 10 years ago.
However, Reeser said that the scale of the new transaction has the potential to incentivize other commercial vehicle manufacturers and fleets to accelerate the adoption of electric vehicles. Lightning eMotors will manufacture electric power systems for up to 7,500 shuttle buses at its 231,000 square foot factory in Loveland.
The power system will be shipped to the Forest River plant in Goshen, Indiana for final assembly.
"It is indeed a great opportunity to be able to improve this relationship in a formal way and to be able to truly accelerate development with the market leader," Reeser said.
Forest River bus division president David Wright said in a statement that the company believes "this will change the rules of the game for shuttle bus operators." The agreement requires the two companies to produce shuttle buses that can accommodate 12 to 33 passengers.
Companies such as Amazon, DHL Express and IKEA all plan to electrify their fleets. Reeser stated that Lightning eMotors has sold vehicles to 46 fleet customers, including DHL, Amazon, ABC and Fluid Trucks.
The company designs and equips electric power systems for commercial vehicle platforms. It produces medium and heavy-duty electric commercial vehicles, including trucks, buses, passenger shuttles and trucks, and provides charging technology.
Colorado hopes to put more electric vehicles on the road to reduce greenhouse gas emissions and combat climate change. Governor Jared Polis has set the goal of nearly 100% of Colorado's cars to be electrified by 2050. State regulations require automakers to provide more zero-emission vehicles for sale.
President Joe Biden’s priorities include combating climate change and increasing the use of renewable energy. He signed an executive order on August 5 requiring the federal government to work to ensure that half of all cars sold in the country by 2030 It is electric.
According to data from the Environmental Protection Agency, transportation generated 29% of heat-absorbing emissions in 2019, the largest of all industries.
"We are very happy to be at the right time and in the right place. We have been working on these products for a long time, and now the market is ready for them," said Reeser, who helped found the company in 2008.
Reeser said that electrified transportation is very important to reduce pollution and carbon emissions. He added that deploying an electric shuttle bus is equivalent to reducing approximately 60 gasoline-burning cars.
Reeser said that other benefits of electric vehicles are much lower operating costs, better performance, no oil changes, and quietness. One problem is that the upfront cost is higher.
But Reesser said that as the number of electric vehicles increases, the transaction between Lightning eMotors and Forest River will help reduce costs.
"We think this is an anchor opportunity, an anchor client," Reeser said. "The part that the customer anchor brings is the critical mass that reduces costs."
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