Proterra, builder of electric buses, heavy-duty vehicle drivetrains, batteries and charging systems, plans to go public on the Nasdaq exchange via a merger with a special-purpose acquisition company (SPAC), the latest in a string of EV companies seeking access to public market financing to meet growing demand.
Tuesday’s announcement sets the Burlingame, Calif.-based company on a course to merge with ArcLight Clean Transition Corp., with $415 million in private investment in public equity commitments led by Daimler Trucks, as well as Franklin Templeton, Chamath Palihapitiya, Fidelity Management & Research, and funds and accounts managed by private equity firm BlackRock.
The transaction is expected to raise $825 million in cash and set an enterprise value of $1.6 billion for Proterra, which will trade under the ticker symbol PTRA. The company has raised about $682 million from investors including Kleiner Perkins, Daimler, Generation Investment Management, Tao Capital Partners, Soros Fund Management, Cowen Sustainable Advisors, GM Ventures, and utility Exelon's Constellation power retailing unit.
Proterra is one of the oldest U.S. makers of electric transit buses and continues to manufacture its own vehicles under its own brand. Much like its China-based electric bus rival BYD, it has made arrangements with financing partners to provide upfront financing and leasing options to ease the initial costs for transit agencies seeking to move from fossil-fueled to electric fleets.
But in the past few years, it’s expanded to supplying its electric drivetrains and batteries to a host of different vehicle manufacturers, as well as making the charging systems used to fuel them.
“It quickly became evident that what we had was special and different,” Proterra CEO Jack Allen, who joined Proterra as chairman in 2017 after a 30-year career at truck and bus maker Navistar International, told Greentech Media in a Tuesday interview. “I understood what was going on with electrification in the commercial vehicle business, and I saw that Proterra had a leadership position.”
Proterra’s spectrum of EV businesses
Daimler is a major partner, with two exclusive battery and drivetrain partnerships launched in 2018 along with a $155 million investment. The first is with Daimler’s Thomas Built Buses division, which is supplying electric school buses to school districts, municipalities and, most recently, to utilities such as Virginia’s Dominion Energy, which has the largest vehicle-to-grid program in the country.
The second Daimler partnership centers on its Freightliner Custom Chassis division, which makes chassis for a variety of truck models. The company’s all-electric MT50e chassis for “last-mile” delivery trucks is expected to go into production this year, taking a similar route to market as electric truck chassis providers that work with manufacturers such as Motiv Power Systems, which raised $20 million in financing this week.
Proterra also provides equipment for Van Hool’s all-electric motor coach buses, popular with green-conscious Silicon Valley companies to transport employees to work, he noted. Last year it inked its first outside-the-U.S. deal with Australian bus maker BusTech, as well as its first shuttle bus partnership with Optimal-EV.
“We’re going to have, in 2020, nearly $200 million in revenue,” he said. “We have 130 transit customers. We’ve put 16 million miles of real-world experience on our battery systems. We’ve already built 300 megawatt-hours of battery systems.”
Proterra launched its battery manufacturing work with lithium-ion battery giant LG Chem in 2017, and last month it expanded its production capacity at its Southern California battery manufacturing plant.
It’s also installed 54 megawatts of charging infrastructure since launching its Proterra Energy business in 2018, Allen said. “We believe the number-one impediment for fleets to electrify on a massive scale is the ability to get charging.”
The continuing greentech rush to SPACs
Special-purpose acquisition companies have become wildly popular as a means for green technology firms to reach public markets as an alternative to initial public offerings. The list of companies taking the SPAC route in the past year includes behind-the-meter battery provider Stem, vehicle-to-grid and EV-charging technology startup Nuvve, aqueous zinc battery maker Eos Energy Storage, leading U.S. EV charging network provider ChargePoint, and a host of EV makers including Fisker Automotive and Lordstown Motors.
Industry watchers have noted that the rush to SPACs may be allowing some companies with less-than-complete pathways to commercial success to raise money in frothy markets. In the past 48 hours, two more EV makers — Faraday Future and Lucid Motors — have been reported to be planning SPACs.
But Proterra’s breadth of business puts it in a different position than heavy-duty electric vehicle competitors like Nikola and Lion Electric that have taken, or plan to take, the SPAC route to going public, Allen said. China’s BYD, the world’s largest EV maker, is among the few companies providing the same scope, with a commanding market share in its home market, the world’s largest for electric transport.
“The difference between us and our peers is [that] while many of them are just getting started — I’m not saying they won’t be successful — they’re building prototypes and manufacturing facilities,” he said.
“We’re already down the road. The first-mover advantage is a big deal here. We know this business is hard — and we can accelerate it.”
