EV Commercial Vehicle XL Fleet The Latest To Market Via SPAC

XL Fleet, an electrification solutions provider for Class 2-6 vehicles, is going public via a merger with SPAC Pivotal Investment Corporation II (NYSE: PIC).

About XL Fleet: XL Fleet provides electrification solutions for commercial vehicles using a “proven, proprietary technology and electrified drive systems that work seamlessly across a wide range of vehicle classes and types.”

XL Fleet has hybrid and plug-in hybrid electric drive systems. These reduce carbon dioxide emissions, which follow a growing number of emissions regulations, and also increase fuel efficiency by 25-50%.

XL Fleet’s customer base includes FedEx, Coca-Cola, PepsiCo, Verizon, the city of Boston, and the Seattle Fire Department. The company’s products have been deployed across 3,200 vehicles driven more than 120 million miles.

The company currently adds its products to pickup trucks, utility vans, mini-buses, and city delivery vehicle offerings from Ford Motor Company (NYSE: F), General Motors Company (NYSE: GM) and Isuzu Motors. Class 2-3 vehicles include utility vans, pickup trucks, mini-bus, and city delivery vehicles. 

Growth Plans: XL Fleet plans to launch an “Electrification-as-a-Service” solution. This proprietary offering includes charging infrastructure, power management, and onsite power and storage offerings.

The company is working on all-electric offerings to grow its addressable market. The company also plans on having its services available to outfit Class 8 vehicles, like transit buses, tow trucks, refuse trucks, and semis, in 2022.

Financials: XL Fleet is estimating revenue to hit $21 million in 2020 and $75 million in 2021. The company has $220 million in its sales pipeline. The 2024 revenue estimate is $1.38 billion based on 6% penetration of the commercial vehicle market.

XL Fleet is forecasting to produce positive EBITDA starting in 2022.

EV Peers in Growing Market: “The company’s rapidly deployable technology solutions position it for long-term growth in a total addressable market that is greater than $1 trillion,” the filing says of the energy consumption and vehicle costs for commercial fleets globally.

The company compares itself to rivals Hyliion, who is set to merge with Tortoise Acquisition Corp (NYSE: SHLL), Workhorse Group (NASDAQ: WKHS), Nikola Corporation (NASDAQ: NKLA), and Lordstown, who is set to merge with DiamondPeak Holdings Co (NASDAQ: DPHC).

XL Fleet projects to sell 4,284 units in 2020. That is significantly higher than the company’s peers like Hyliion with 20 and Workhorse with 400. In 2021, XL Fleet forecasts to sell 9,234 units compared to 2,400 from Workhorse, 2,200 from Lordstown, 600 from Nikola, and 320 from Hyliion.

The merger between XL Fleet and Pivotal values the company at $1 billion. XL Fleet will have an enterprise value/revenue multiple of 1.5 times for fiscal 2023 and 0.7 times for fiscal 2024. This compares to median ratings of peer companies of 5.5 times and 2.7 times, respectively.

Hyliion, who electrifies powertrains for Class 8 vehicles, is valued at 6.9 times 2023 EV/Revenue and 3.4 times 2024 EV/Revenue, according to XL Fleet.

EV Performance: Electric vehicle companies have been among the biggest gainers in 2020, including the peers listed above and recent SPAC deals. Shares of Tortoise Acquisition are up 380% in 2020. Workhorse shares have risen 822% in 2020. Nikola shares are up over 230% in 2020. DiamondPeak Holdings share are up 180% in 2020.

Price Action: Shares of Pivotal Investment Corporation II are up 13% to $11.99.

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