Lightning eMotors (ZEV) Earns New 'Buy' Rating After 'Game-Changing' Berkshire Deal, Sees 56% Upside
Yesterday, August 10th, Lightning eMotors (NYSE: ZEV) announced that they have entered into a strategic partnership with Forest River, Inc., a Berkshire Hathaway company (NYSE: BRK-A). The partnership, worth $850M, calls for Lightning eMotors to build fully electric powertrains and provide charging products, and services for Forest River over the next four and a half years.
DA Davidson initiated coverage on Lightning eMotors, with a Buy rating and $17 price target, following the announcement. Analyst, Michael Shlisky believes that the company’s focus on “niche vehicle categories”, such as ambulances and busses, provides a unique in-road to the market. Others may come along, but ZEV has the advantage of being first and has developed partnerships with some of the major upfitters.
ZEV will manufacture powertrain systems at their facility in Loveland, Colorado and ship the powertrains to Forest River’s factory in Goshen, Indiana, for final assembly of the Class 4 and 5 all-electric passenger buses.
“We decided to work with Lightning eMotors after several years of extensive research because of their market and technology leadership in the commercial EV segment,” said David Wright, president of Forest River’s bus division.
“This has the potential to be the largest contract ever in the electric shuttle bus market, and we believe it will be the catalyst for other large commercial vehicle OEMs and fleets to accelerate their adoption of commercial electric vehicles,” said Tim Reeser, CEO of Lightning eMotors.
Manufacturing of Forest River Lightning EV shuttles has already begun, and Forest River expects to deliver several dozens of the new electric shuttle buses to its dealerships by the end of this year.
By Michael Elkins | [email protected]