A new partnership permits Lightning Systems to produce Class 6 vehicles powered by electric fuel cells. Courtesy Lightning Systems

CEO: Lightning eMotors committed to Loveland as it plans to go public 

LOVELAND — Although the prospect of raising $270 million in a debut on the New York Stock Exchange would draw a company toward settling in a major metro area, Lightning eMotors CEO Tim Reeser said the company plans to stay put in Loveland for the next several years as it executes a billion-dollar growth plan.

Lightning Energy’s lineup of new chargers includes both AC and DC fast charge options, ranging from 7.2kW AC chargers to high-output 150kW DC fast chargers. Courtesy Lightning Systems.

 

SPAC vs. IPO

Lightning opted against the traditional initial public offering process in its plans to become publicly traded, instead choosing to merge with GigCapital3 Inc. (NYSE: GIK). 

That company’s owner is Gig Capital Global, a venture-capital firm that uses special-purpose acquisition companies, or SPACs, to take private companies to the markets. SPACs are shells that are listed on public exchanges and are later acquired by companies looking to go public outside of the normal procedures of an initial public offering.

In an interview with BizWest Tuesday, Reeser said the deal gave Lightning access to Gig Capital’s advisers and allowed the company to avoid a quiet period wherein it couldn’t share financial projections with the public.

Using a SPAC usually allows a company to go public within six months or so, compared with the longer process within a traditional IPO. Reeser said the U.S. Securities and Exchange Commission still has to approve the company going public, which he estimates could come between March and May depending on how many questions regulators have before they’re satisfied that Lightning is markets-ready.

 

Quietly planning to compete in a flashy industry

The company projects that it will hit $2 billion in revenue in 2025, buoyed mostly by sales of trucks, buses and vans fitted with electric powertrains rather than the combustion systems that would normally be installed in such vehicles.

Reeser believes this revenue will be driven in part by efforts of governments in the U.S. and abroad moving to ban the sale of internal-combustion cars. The United Kingdom, Sweden and the Netherlands plan to ban sales of gas and diesel vehicles by 2030.

California plans to phase out new combustion vehicle sales by 2035, and New Jersey is considering following suit. Reeser said the corporate world is also getting into the game, partially because of the long-term cost savings and partially because of pressure from their stakeholders.

“Ten years ago, there were a lot of companies that gave it lip service and green-washing, but today, there are a lot of companies actually fulfilling their commitments to shareholders and their employees and customers that they will be green,” he said.

However, Lightning seems to have occupied a market that’s lucrative, but doesn’t capture the imaginations of electric-vehicle enthusiasts and investors.

The company is positioned between the Class 1 and 2-size cars and trucks that have been dominated in the EV market by Tesla Inc. (Nasdaq: TSLA), which has had a history in recent years of not meeting lofty production targets.

On the other side are Class 8 vehicles, the long-haul semi-trucks that for much of this year were thought to be on their way to decarbonization with the technology of Nikola Corp. (Nasdaq: NKLA) before a hedge fund accused the company in September of promoting an advertisement of one of its trucks running under its own power, when it was really rolling down a slope. That accusation led founder and CEO Trevor Milton to resign amid reported scrutiny from federal regulators.

While ambulances, buses and delivery trucks aren’t the first vehicles to come to mind when consumers think about electric vehicles, Reeser said they make perfect fits for conversions. He points to delivery vans and buses, which work on scheduled routes, brake often for stops and spend a longer time idling on the road, as a segment where medium-duty vehicles can both be more efficient and environmentally friendly via electrification.

Now, Reeser believes the company’s offerings are ready to scale into a quiet segment of the industry that is estimated to be around $67 billion in addressable market size.

“Many people try to pretend you can go from prototype to 20,000 vehicles a year, but you just can’t,” he said. “You can’t validate it or test it. And the customers are risk-averse; they’re going to force you to prove your reliability over a period of time before they scale up. So we felt it was right to start quietly, do our time, as we like to say, prove that we have the reliability and go through the evolutions of making a better and better early-stage product until we had one that was really ready to be the big time.”

 

No plans to leave Loveland

A growth plan the size of Lightning’s begs the question of whether the company will follow the path of other publicly traded companies that left Northern Colorado or the Boulder area for a home in a major city. For example, power-controls maker Advanced Energy Industries Inc. (Nasdaq: AEIS) moved its headquarters from Fort Collins to Denver despite CEO Yuval Wasserman saying last year that the company wouldn’t move.

But Reeser said Lightning isn’t going to move anytime soon because it already finds itself at a strategic confluence.

The company’s current home in the Rocky Mountain Center for Innovation and Technology sits in the middle of Lightning’s pools for talent and customers, as it’s in between Colorado State University, the University of Colorado Boulder, the Colorado School of Mines and the National Renewable Energy Laboratory and in between its largest markets in California and New York.

Reeser also said the company has the first right of acceptance to take up additional space in the RMCIT if needed to accommodate new orders without needing to build a factory, and can tap into partner manufacturers across the U.S.

“We’re committed to Loveland,” he said, noting that he is a fifth-generation Coloradan. “… It’s not just my love for Colorado and my history here, but also the fact that it really makes sense from a labor pool (and) from a facilities and operations and logistical standpoint.”

© 2020 BizWest Media LLC

 

LOVELAND — Although the prospect of raising $270 million in a debut on the New York Stock Exchange would draw a company toward settling in a major metro area, Lightning eMotors CEO Tim Reeser said the company plans to stay put in Loveland for the next several years as it executes a billion-dollar growth plan.

Lightning Energy’s lineup of new chargers includes both AC and DC fast charge options, ranging from 7.2kW AC chargers to high-output 150kW DC fast chargers. Courtesy Lightning Systems.

 

SPAC vs. IPO

Lightning opted against the traditional initial public offering process in its plans to become publicly traded, instead choosing to merge with GigCapital3 Inc. (NYSE: GIK). 

That company’s owner is Gig Capital Global, a venture-capital firm that uses special-purpose acquisition companies, or SPACs, to take private companies to the markets. SPACs are shells that are listed on public exchanges and are later acquired by companies looking to go public outside of the normal procedures of an initial public offering.

In an interview with BizWest Tuesday, Reeser said the deal gave Lightning access to Gig Capital’s advisers and allowed the company to avoid a quiet period wherein it couldn’t share financial projections with the public.

Using a SPAC usually allows a company to go public within six months or so, compared with the longer process within a traditional IPO. Reeser said the U.S. Securities and Exchange Commission still…