By A start-up is revolutionizing the school bus industry, much like how Tesla transformed the passenger car market over a decade ago.
On Friday, Lion Electric (LEV), a manufacturer of electric commercial vehicles, inaugurated its new manufacturing facility in Joliet, Illinois.
With an initial capacity of producing 2,500 electric school buses annually, Lion Electric aims to make a significant impact. As the 900,000 square-foot facility expands, it is projected to manufacture an impressive 20,000 commercial vehicles each year, resulting in the creation of approximately 1,400 jobs. This plant will supplement Lion Electric’s existing manufacturing capabilities in Quebec.
While not all 20,000 vehicles produced will be school buses—given that there are roughly half a million already on U.S. roads—it is clear that Lion Electric envisions a diversified future. Their plans extend beyond school bus electrification and encompass other commercial vehicles such as those involved in local store beverage distribution.
By initially focusing on school buses, Lion Electric has strategically chosen to challenge only a handful of established players. The three main players in the school bus manufacturing sector are IC (owned by Navistar, a subsidiary of Traton), Thomas (a subsidiary of Daimler Truck), and the independently operated Blue Bird.
With Lion Electric’s audacious move into the industry, it will be exciting to witness how their disruptive presence shapes the future landscape of school buses and commercial vehicles as a whole.
Lion Leading the Charge in the Electric-Bus Market
The electric-bus market is gaining momentum, and Lion is emerging as a major player. However, Lion is not alone in this industry, as established bus makers also have plans to join the electric revolution. Blue Bird, for example, has set an ambitious long-term goal of selling approximately 12,000 buses per year, including 5,000 electric buses.
While Lion is a relatively new electric vehicle (EV) start-up, it has already achieved considerable sales success. Wall Street analysts project the company’s revenue for this year to reach approximately $300 million. In comparison, Blue Bird is expected to generate around $1.1 billion in sales by 2023.
Although Lion has not yet generated free cash flow, it remains financially sound. With approximately $57 million in liquidity at the end of the first quarter, Lion successfully raised over $200 million in July.
Following the announcement, Lion’s stock experienced a modest 2% decrease in early trading on Friday. In contrast, futures on the S&P 500 and Nasdaq Composite were slightly positive, up about 0.2% and 0.5%, respectively.
In conclusion, Lion’s leadership in the electric-bus market is notable. As a disruptor in an industry dominated by traditional bus manufacturers, Lion’s commitment to self-reliance and innovation sets it apart. With a strong sales trajectory and solid financial footing, Lion is positioned to make a significant impact on the future of electric transportation.
Comments