Truck Talk: Rebranding and Reorganization Edition

This week, Daimler Truck laid out forward plans ahead of trading in December as a stand-alone truck maker; the only publicly traded trailer maker renamed, rebranded, and reorganized; Proterra pushed further into the battery supply business; and Kodiak Robotics maintains it will go it alone in trucking autonomy after a handsome capital raise.

Looking for Big Numbers

Daimler Truck will begin trading as a stand-alone business on the Frankfurt Stock Exchange on Dec. 10 and expects to join Germany's DAX listing of the 40 most valuable listed companies in Q1 2022. Daimler Truck has lived somewhat in the shadow of Mercedes-Benz passenger cars and finally gets to show what it can do on its own.

What that means for Daimler Trucks North America is continuing to pull its load. Assuming a strong market in 2025, DTNA is expected to put up a 12% return on sales, second only to 14% for the financial services business. Overall, Daimler Truck has advanced by two years to 2023 a plan to reduce fixed costs by 15% compared to 2019.  

John O'Leary, DTNA president and CEO, said to meet that target, the unit has to hold down costs and improve its share in the off-highway market where Western Star is rebranding its products as the X-series. 

Rival Paccar Inc. isn't that close to DTNA yet but shares gains for Kenworth and Peterbilt, both of which have revealed new heavy- and medium-duty trucks this year could make things interesting.

The split-off of Daimler Truck is the second reshaping industry move this year. Volkswagen AG's Traton Group now controls Navistar Inc., opening a door to the North American market for Traton.

Just Call it Wabash

Brent Yeagy has been making significant moves in recent years to get Wabash National focused on first-to-last-mile trailers and bodies. With Q3 earnings this week, the CEO took the wraps off the rest, dropping National from the company's name.

All advance platforms, tank trailers, and truck bodies — about 90% of Wabash's sales — are being combined into one segment. The other segment is parts and service, which Yeagy said currently generates a small portion of total company revenue. Wabash will put more resources into growing what it has now and the businesses it might acquire.

Wabash has a 10-year supply agreement for aluminum extrusions critical to adding dry van capacity. Converting existing refrigerated van capacity to dry vans will allow the production of 10,000 dry vans, nearly twice the number of traditional reefers it was building. Yeagy said that it should add 15-20 cents of earnings per share in 2023.

Meanwhile, Wabash is scaling its molded structural composites business for reefers, which Yeagy said will disrupt the cold chain product market with lighter weight, more thermally efficient vans.

"We expect our increased dry van capacity to be a linchpin to many new and expanded customer relationships and our shift to all composite refrigerated technology to drive growth well into the future," Yeagy said on a Q3 earnings call with analysts on Tuesday.

In part due to supply chain constraints, Wabash is sitting on a record backlog, which increased by $600 billion from Q2 to $1.9 billion. That is 87% ahead of last year and provides so much work in 2022 that Yeagy offered an earnings estimate of $170 per share even with no supply chain improvement.

Going it Alone

With two competitors bolstered by lower than hoped for but still significant proceeds from SPACs, Kodiak Robotics thinks its traditional venture capital-backed raise of $125 million puts it in a position to double its headcount and its truck fleet.

And to stay independent.

Asked by FreightWaves about the possibility of merging with a better financially heeled competitor, CEO Don Burnette was having none of it.

"That's not our intended goal and we don't have any conversations like that underway," he told me. "We feel like this fundraise puts us in a position where we can really build this technology and we've always prided ourselves on our capital efficiency.

"I don't think this is a one-company-takes-all type of situation. I don't think you're only going to find one AV company as the king of the hill. I think there's room for multiple players in this space and I think that Kodiak is really poised to be one of the top if not the winner."

You Want a Battery With That?

Proterra Inc. — the startup that isn't a startup — put up solid Q3 revenue of $62 million, 30% ahead of a year ago. But the action to watch is its battery and infrastructure businesses, along with its staple electric bus business. 

Measured in megawatt-hours (mWh), Proterra produced 130 mWh of batteries — 52 for the electric transit business and 78 for other commercial vehicles. It also installed 3 megawatts of charging infrastructure in Q3.

It also expanded a partnership with Lightning eMotors, the Colorado-based converter of Ford Motor Co. Class 4 and Class 5 electric trucks and shuttles. Proterra will deliver 900 mWh of batteries for up to 10,000 electric commercial vehicles through 2025. That incorporates supplying battery systems for Lightning eMotors's partnership with Forest River for zero-emission shuttle buses.

And the good times may only be starting to roll.

The five-year extension of the federal surface transportation bill pumps $39 billion for public transit above today's funding level, including $4 billion for zero-emission transit buses, up to $5 billion for battery-electric school buses, and $7.5 billion for passenger and commercial electric vehicle charging.

"We continue to believe that demand is at a tipping point, not only for electric transit buses but electric commercial vehicles in general," CEO Jack Allen told analysts on the Q3 earnings call Wednesday. "And we've established a firm foundation across all our businesses to take advantage of it."

In brief …

Navistar is implementing an International Truck and IC Bus Uptime Academy, a 12-month technician apprenticeship program that offers paid, hands-on training in a real-world setting. … Alliance Parts, a DTNA brand, has opened its first stand-alone store in Escobedo, Mexico, coincidentally where Navistar has an assembly plant. … Jay Craig is stepping down as executive chairman at Tier 1 supplier Meritor Inc. Six of Craig's 15 years at the company were spent as CEO. He will be replaced by board member William Newlin as non-executive chairman.  … Hyzon Motors is the second fuel cell manufacturer to hook up with Canada's TC Energy to create hydrogen fuel hubs. Nikola NKLA signed a similar development agreement with the pipeline giant in October.

In the Pink

Displaying the color pink for Breast Cancer Awareness Month doesn't necessarily end when  October does. Jason Roycht, global head of fuel cells at Nikola, called attention to the cause by wrapping one of the alpha versions of Nikola's fuel cell electric trucks.

Mack Trucks' holiday catalog, meanwhile, has a pink Mack Anthem version you can buy for $109.99 with part of the proceeds benefiting the National Breast Cancer Foundation.

That's it for this week. Thanks for reading. Click here to get Truck Talk via email. We're taking a couple of weeks off. Truck Talk will return Dec. 3.

Alan

Image Sourced from Pixabay