Lightning eMotors
Zev Production Line 2

Lightning eMotors sees supply chain slowing growth ‘for the next few quarters’

March 30, 2022
After working through battery procurement problems last year, the EV builder now faces worsening chassis shortages as OEMs wrestle with semiconductor supplies.

The leaders of Lightning eMotors say supply chain hang-ups, some ongoing and others relatively new, are pushing a share of the commercial electric vehicle builder’s revenues into future quarters. To help manage that shift, they say they are focusing more on repowering existing chassis—including for Forest River Bus, which has expanded its partnership with Lightning.

Boosted by a $40 million accounting gain on the fair value of earnout liability, Colorado-based Lightning posted a profit of $22.2 million in the fourth quarter on sales of $4.2 million. The company’s adjusted EBITDA for the quarter was negative $15.9 million, about three times its late-2020 equivalent.

Lightning sold 36 in the last three months of 2021, down from 43 in the third quarter, and hurt by major OEMs, such as Ford Motor Co. and General Motors, pausing production for lack of parts, especially semiconductors. Earlier last year, the company had addressed battery bottlenecks by signing supply agreements with Proterra Inc. and Coulomb Solutions Inc.

See also: Pace of heavy EV sales quickens with two recent deals

Lightning ended December with an order backlog worth about $169 million, down slightly from three months earlier. But that figure doesn’t include all of the possible business from school bus company Collins or shuttle bus and passenger van maker Forest River, which is part of Berkshire Hathaway. Forest River and Lightning executives recently expanded their work together to make eligible for repowering more than 50,000 class 4 shuttle buses already in service. President and CEO Tim Reeser said both sides are still figuring out what the partnership’s volumes might look like in the coming years.

The Forest River news speaks to a likely shift toward work more focused on powertrains only rather than full vehicles, Reeser added. That will lower Lightning’s average selling prices but lift profit margins.

“I think any good company has to be able to be a bit agile in [its] approach,” Reeser said on Lightning’s fourth-quarter earnings conference call earlier this week. “We’re looking out every day saying, ‘What do we know we can get and what can we build and what can we revenue?’ [T]hat's why we've really looked at this opportunity around repowers and taking advantage of that while medium-duty chassis are constrained.”

Looking ahead, Reeser and his team expect to sell around 70 vehicles and powertrain systems in the first quarter and book revenues of $5 million to $6 million.

Shares of Lightning (Ticker: ZEV) fell more than 10% after hours March 28 but recovered that ground and more the day after as the market broadly rallied around signs of progress in ceasefire negotiations between Ukraine and Russia. They ended the day up more than 2% at $5.79 but are still down about 30% over the past six months.

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