Electric vehicle manufacturer Lightning eMotors Inc went publicvia SPAC and saw shares fall below $10 after the merger was completed.
Here’s why shares are spiking past the $10 level Tuesday.
What Happened:Lightning eMotors announceda multiyear deal with Forest River, a company owned by Berkshire Hathaway(NYSE:BRK-A)(NYSE:BRK-B).
The deal could be valued at up to $850 million with a total of 7,500 vehicles that could be delivered.
The agreement will have Lightning eMotors build electric powertrains and provide charging products for four and a half years. The products will be shipped to Forest River’s factory for final assembly of the Class 4 and Class 5 passenger buses.
Forest River will dedicate 100,000 square feet of its factory to installing the Lightning eMotors powertrains.
The buses will have a range of 80 to 160 miles and can recharge over a “lunch break” with DC fast charging from Lightning eMotors. The buses are designed to have 12 to 33 passenger seats according to the release.
Why It’s Important:Forest River is the largest shuttle bus market producer in North America. The company delivered 100,000 buses in July 2020.
Forest River has more than 100 bus dealership locations in the U.S. that will sell and service the buses from the Lightning eMotors partnership.
The deal calls for up to 7,500 buses and $850 million in revenue for Lightning eMotors, which would be the largest deal in company history and also a major milestone for the industry.
“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,” Lightning eMotors CEOTim Ressersaid.
The partnership with Fox River will allow Lightning eMotors to provide a price point for customers “that results in a very compelling ROI,” Reeser said.
ZEV Price Action:ZEV shares are up 61.93% to $10.38 Tuesday.