Medium-Duty Electric Vehicle Share Leader Lightning eMotors Going Public In SPAC Deal

Lightning eMotors is going public via the SPAC GigCapital3 GIK. The deal values Lightning eMotors at $650 million.

The new company will trade on the NYSE as "ZEV" when the deal is completed in the first half of 2021.

About Lightning eMotors: Operating in the U.S. commercial medium-duty EV market, Lightning eMotors is the market share leader in the Class 3 to Class 7 markets and has a 50% share in the Class 3 to Class 6 market. 

Lightning eMotors is the only company that has delivered electric vehicles for each of the Class 3, Class 4, Class 5, Class 6 and Class 7 segments.

Among the company’s customers are Amazon.com AMZN, DHL, CBRE, Praxair, Winnebago and Cox Enterprises.
Partners for Lightning eMotors include Ford Motor Company F, BorgWarner Inc BWA, Plug Power Inc PLUG and BP BP, who is also an investor in the company. The company has a three-year battery partnership with Romeo Power, which is going public via SPAC RMG Acquisition Corp RMG.

Lightning eMotors owns an energy-as-a-service segment, Lightning Energy, that has patented mobile charging. The company also has Lightning Capital, an EV-as-a-service segment providing financing for potential customers.

Related Link: Electric Last Mile SPAC Merger: What Investors Should Know

Financials: Lightning eMotors says it has high revenue visibility, with 100% of projected 2021 revenue coming from vehicles that were already ordered.

Twenty-five percent of fiscal 2022 is also from firm orders.

For fiscal 2020, the company expects $9 million in revenue. That figure Is expected to grow to $63 million and $354 million in the next two respective fiscal years.

By 2025, the company sees revenue hitting $2 billion. Revenue is seen growing at a compounded annual growth rate of 195% from 2020 to 2025.

Unit deliveries are expected to increase from 78 in fiscal 2020 to 20,000 by fiscal 2025.

The company’s path to profitability sees positive EBITDA in fiscal 2022.

Growth Ahead: The company sees a total addressable market of $67 billion. Lightning eMotors has a backlog of over 1,500 orders.

The company has manufacturing capabilities of 1,000 units annually now and the ability to scale this to 20,000 units by 2025.

The current customers for Lightning eMotors together operate 500,000 vehicles, which could set the company up nicely for future sales.

Competition: According to the investor presentation, Lightning eMotors has a two-year head start in customer validation for the market. The company has over 120 vehicles already on the road.

The company says it is miles ahead of Hyliion Holdings Corp HYLN, Nikola Corporation NKLA and XL Fleet, which is merging with Pivotal Investment Corporation II PIC.

These competitors are only starting to validate their zero-emission vehicle models in 2023, according to the company.

Price Action: Shares of GigCapital3 gained 1.36% Friday, closing at $12.70. 

Shares traded up double digits in the pre-market session.

Disclosure: Author is long GIK, HYLN and PIC.

Courtesy photo.