Company: Vicinity Motor Corp(formerly Grande West Transportation )
Listings :TSXV , US OTC SOON to be up listed at Nasdaq
Ticker: VMC.V (previously BUS ,) BUSXF at US OTC
Market cap at time of publication: $154 MCAD
Stock price at time of publication: $5.23 CAD ( reverse split price 1,75 CAD)
Business: Leading supplier of electric, CNG, gas and clean-diesel buses for
both public and commercial enterprise use in the U.S and Canada
Comparable peer : Greenpower Motor , Market cap $378 MCAD
Vicinity Motors, the top pick for ESGFIRE in the public transportation for Electric vehicles. They are on a successful path to entering the large market in the United States. The company is currently trading at 3X projected sales for 2021 compared to 25X sales for competitor Greenpower Motor. Vicinity Motors already has an impressive market share of their domestic Canadian market and now aims to take advantage of the huge growth for demand in electric vehicles for the public transportation market. We have previously covered this stock in multiple posts. We decided to have an interview with the CEO William Trainer ( 3/5 2021) to hear how he think the company is progressing on their goals:
ESG: Welcome to this interview with ESGFIRE William!
ESG: Can you tell us what the status is for Vicinity Motors with the upcoming Nasdaq uplisting?
We are pushing hard to ensure we are listed as soon as possible. We will announce updates as they are publicly available. This is a priority for management
ESG: What’s the Status on the new production facility in the United States?
It’s going very well, we are working closely with the state of Washington. We have applied for grants and the local government has been very receptive and welcoming to us. We anticipate that the facility should be in production for Q1 2022.
ESG: What number of buses are you aiming on delivering for 2021?
We aim to deliver 150 – 200 units in 2021. Lead times are between 8-12 months from order so any new orders we receive now will be delivered in 2022.
ESG comment: A delivery of 150-200 Units would equal about 52 million -70 million USD in revenues for 2021.
ESG: You have a potential revenue stream of 50-55 million dollars for 2021 which is 100 % more than what the company made in 2020.
Do you foresee that this growth is likely to remain at 100 % year to year and if yes for how long?
Our new factory in Washington can easily produce 1000 buses a year at full capacity ( Equalling revenues of around 350 MUSD/year). We want to get to this full capacity quickly.Right now we are building our backlog to get the factory to full capacity, We have a lot of winds pushing us forward quickly in the United States with good momentum and a US factory helps a lot. We have qualified to sell to many new states already and we are in the process of new bids. We also aim to sell in Iowa, Missisipi, Georgia and getting sales people to gather the orders. We have been very successful in Canada and we are sure we will be successful in the United States too.
ESG:What do you think is the reason that your new EV buses are gaining massive interest ?
We can barely keep up with all the inquiries we get and the easy answer to that question is that we have always built exactly what the customers wants. We are not trying to copy anyone instead we have designed our own purpose-built designed EV shuttle bus.
For example we saw a need for a mid-size buss for the industry to be able to pick up people in residential areas so we listened carefully to our customers to deliver exactly the bus they wanted such as a mid size low floor user friendly bus. Our buses get people off the road with their cars and make it more comfortable to commute. When it comes to our electric bus model we started with a clean diesel and compressed natural gas bus (CNG) . We saw there was a transitioning coming into electric vehicles so we wanted to be able to deliver the bus which was best in class at the best available price and that’s exactly what we have done. We are building 25 electric buses right now out of which 15 are already sold and the other 10 are going to be used as demonstration buses for our sales partners in Canada and the United states.
When we look at new models we look at what the automotive industry does. They look at producing 1 million vehicles of a new model and that’s the way we try to think.
We have a battery pack from our great supplier BMW which is integrated by our other partner Lion E-mobility. This battery pack allows is only 7 inches (18 cm) thick so we can put it in the low floor level which makes excellent low centre of gravity.
We also have onboard charging just like a Tesla car has so there is no need for expensive charging infrastructure for our customers.
Finally we have a costing of components which is highly efficient. We also put hydraulic breaks on our buses so the driver does not need commercial experience.
ESG: What is the pricing on your EV buses compared to competitors?
Our buses charges up very easy on any standard grid and cost around 350 000 USD compared to 1 million USD for our competitors who have to put their batteries on the roof of their buses which also makes them very top heavy.
ESG: What competitive advantage do you see that vicinity motors has over competitors such as NFI, Proterra etc?
William: Our buses are more user friendly and a lot better priced. We are a smaller company than most of our competitors , we are therefore quicker to react to customer needs and we can react more quickly in line with customer demands. We have designed all our buses using our in-house engineering team and then working with industry leading teams like LION Smart and Hindujatech. We focus on customer service, as it’s important to take care of your customer so they are happy with your service. That way we often get recurring orders from our existing customers.
ESG: How can your buses be so affordable in comparison to competitors?
We are definitely the best price compared to competitors and this is because we have developed all our own software and internal communication. When we buy an electric component we embed it into the vehicle. If we were to buy our components off the shelf they would cost 650 000 to 700 000 USD. Since we design everything in house we are super competitive.
To give you an example we offer our standard clean diesel bus to LAX airport shuttle for 250 000 USD. Now we can offer them an electric solution for 350 000 USD which is a no brainer since the maintenance cost is lower for this vehicle , you’re not buying fuel and its also a lot more environmentally friendly. We see major growth in both shuttle bus and public transport coming.
ESG:What do you think of the new competitors in the electric vehicles sector for public transportation?
There are a lot of startups in the electric vehicles space and I wish them all the best. However what you need to realize is that this is a competitive market and it is very tough to get your first order in the transit side. Buyers often look at how long you’ve been around for and how are you going to offer service. If you don’t have any track record of this it’s going to be difficult.
ESG: Have you looked at any partnership for Vehicle-2-grid charging for your customers?
Yes we have we are exploring a possible cooperation with a Vehicle-2-grid supplier .
ESG: Do you have any plans to compete in the school bus industry for EV buses?
Not at this point in time, we are now focusing on shuttle and transit buses.
I must say though now we have developed all the software and such and we are always looking at where we can place a new vehicle. With that said I’m not ruling it out but its not on the map right now.
ESG: What does the cooperation with Exro mean for Vicinity Motors?
We are very excited to be working with Exro and if you look at their cutting edge technology they improve the efficiency of the electric motor which shows they can save 30 % power and therefore increase the range of electric vehicles by 30 % !
We hope to have this solution in our vehicles by the end of this year (2021).
ESG: What are vicinity motors gross margin and EBITDA goals?
We want to maintain a 20% gross margins on vehicles and we are confident we can achieve this. We have a scalable platform and as we scale up our margins will increase considerably. We are breakeven on 100 buses so at for example 300 buses our EBITDA will be very good. The sector EBITDA is around 3 % but we are aiming at a minimum of 10 %.
ESG: What is the growth strategy moving forward?
Our growth strategy is twofold . First we need our factory in place and you need a strong marketing / retail presence. We have aligned ourselves with ABC Companies which is a BIG player and I’m not sure the market realize what a power house of corporation this is.
ABC companies is one of the top 3 contenders in the bus industry.
They started in motor coaches but are now taking on transit and shuttle lines. I think they will do a good job for Vicinity Motors and our core values goes well with theirs.
We are also looking at expansion on the west coast with the states of Washington, Oregon and are also working on California. ABC Companies are big on the west coast and can likely bring in tremendous sales.
ESG: When will you be giving guidance in the form of a back log?
At some point we will start giving official guidance right now you can follow it with our news releases.
ESG: What do you think of the current share price?
I’m confident that once we get on the Nasdaq the evaluation will more fairly reflect our true value. We think we will likely see a better evaluation once we hit the Nasdaq Listing.
ESG: Thank you for participating William!
We own shares of this company personally.
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