Potent Partnerships Could Power Lightning eMotors to the Next Level

Potent Partnerships Could Power Lightning eMotors to the Next Level

In the wake of record revenue and unit sales, Lightning eMotors might turn out to be 2022’s surprise EV-market turnaround story.

Colorado-based Lightning eMotors ( ZEV -8.99%) was an early mover in vehicle electrification. The company has provided fleet solutions since 2009, including zero-emission commercial electric vehicles (EVs) and powertrains/chassis. As supply chain issues persist and earlier hype over EV stocks fades in 2022, the burden lies squarely on Lightning eMotors to prove its viability.

Thus, the company’s recently reported quarterly results allowed Lightning eMotors to demonstrate its growth — or at the very least, its narrowing profitability gap. What’s more, by partnering with a pair of well-known vehicle-market companies, Lightning eMotors could surprise the skeptics and bulk up early investors’ ESG (environmental, social, and corporate governance) portfolios. Image source: Getty Images. Problem acknowledged

In the press release for Lightning eMotors’ first-quarter 2022 results, CEO Tim Reeser mentioned “continued supply chain headwinds,” especially as they relate to the chassis, or vehicles’ base frames. Supply chain troubles were again reiterated in the company’s guidance statement. Okay, we get the idea: Supply chain headwinds are a real thing, and any reasonable investor will consider them when evaluating Lightning eMotors’ current and near-term results. So, with this challenge acknowledged, how did the company fare in the year’s first three months?

All things considered, Lightning eMotors did about as well as anyone could reasonably expect. In the first quarter of 2022, the company brought in $5.4 million of revenue, marking an 18% year-over-year increase. That all amounted to 68 units sold over the quarter — while that might not look like much at first glance, it’s worth noting that that is a record for the company and more than double the quantity from the year-ago quarter.

Lightning eMotors isn’t profitable yet, but this should be a familiar story for just about any investor in EV start-ups. In any event, Lightning eMotors’ $10.8 million quarterly net loss represents a notable improvement over the year-earlier quarter’s net loss of $27.4 million. In other words, the company’s path to profitability is at least a little bit clearer now.

Lightning eMotors expects to continue increasing revenue, guiding for between $6 million and $8 million in the second quarter. This optimistic-but-reasonable guidance also includes expected system sales; the EV company estimates that it will sell between 55 and 75 units over the next three months, with the caveat that supply chain delays may impact these numbers. Help from a giant (or two)

Even with all the understandable concerns about the supply chain, Reeser declared without reservation that a couple of recently disclosed collaborations “should begin to alleviate” the chassis shortage “later this year.” It remains to be seen whether this mitigation strategy will work out as hoped, but the company’s partnerships are indeed value-added for the company and its stakeholders.

If you’ve ridden a school bus in the U.S. over the past fifty years, there’s a pretty good chance that it was produced by Blue Bird Corporation ( BLBD -3.37%). Nowadays, Blue Bird seeks to lead the shift to low- and no-emission school buses and, consequently, is teaming up with Lightning eMotors to provide an electric Class 5-6 custom chassis. Apparently, the two companies worked together to build the prototype of this potentially groundbreaking chassis. Understandably, Reeser is “ecstatic that Blue Bird chose us to be their powertrain partner for their debut into the commercial chassis market.”

What could be bigger than a team-up with the American school-bus king? If anything could top that, it would be a collaboration with none other than General Motors ( GM -5.96%) to electrify the GM’s medium-duty truck platforms. More specifically, Lightning eMotors will reportedly be the “first GM Specialty Vehicle Manufacturer (SVM) to provide fully electric Class 3 through Class 6 commercial vehicles.” Reeser said he’s “thrilled” to be working with General Motors on these truck platforms — and Lightning eMotors’ stakeholders should be relieved that the company has such a powerful partner in its quest to put more electrified fleets on the roadways. The right vehicle for profits?

A stake in Lightning eMotors stock is speculative, but this could be said about practically any EV-market start-up investment today. The skeptics will undoubtedly point out that Lightning eMotors remains unprofitable, but the company seems to be closing that gap.

Meanwhile, it’s quite a coup for Lightning eMotors to partner with a school-bus giant and an American automotive icon. It’s only for the risk tolerant, to be sure, but Lightning eMotors’ value-added collaborations make a long-term investment in the […]

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