Proterra is working with Daimler’s Thomas Built Buses unit to supply battery-powered models for schools.
Proterra
Proterra, a maker of electric transit buses that may be heading for an IPO, has set up a new division to sell its batteries, motors and other components for use in commercial trucks, sanitation vehicles and a range of heavy-duty models to cash in on growing demand for zero-emission fleets, particularly in California.
The Silicon Valley company’s Proterra Powered unit will work closely with truck manufacturers that want to quickly electrify their lineups as an alternative to traditional diesel-engine versions, Matt Horton, Proterra’s chief commercial officer, told Forbes. Proterra began dipping into this space two years ago, teaming with Daimler on electric school buses and Belgium’s Van Hool on luxury touring coaches, and the new operation will also provide engineering, design and software services, as well as charging systems to keep the vehicles running.
“We’ve been approached by a lot of other vehicle manufacturers that were very interested in electrifying their vehicles as well, who wanted to see if Proterra would be willing to work with them,” Horton said. “Organically we began to do quite a bit of work with some partners and realized just how big the market opportunity was and that the market was ready for these electrification solutions.”
Proterra Powered commercial vehicles
Proterra
Horton wouldn’t provide revenue targets for the commercial vehicle unit, adding only, “We view this as one of the biggest opportunities out there.” Currently, privately held Proterra’s revenue may be about $200 million this year, based on sales of transit buses built at its factories in Los Angeles and Greenville, South Carolina, each of which costs more than $600,000. Those costs tend to be offset by federal and state incentive programs for clean vehicles and operating costs that Proterra says are lower than for diesel-engine models.
From California to Europe and China, there’s a push to curb diesel exhaust from trucks and buses that causes health problems and contributes to carbon pollution. While Elon Musk has ginned up interest in his futuristic long-range, battery-powered Tesla Semi and startup Nikola is touting hydrogen electric rigs, there’s near-term demand to replace commercial fleets of urban delivery vehicles, those operating at ports or picking up trash in cities, that run on fixed routes and return to a central charging stations daily. Proterra, which employs dozens of former Tesla engineers and executives, has particular expertise in this area from a decade years of working with transit fleets in cities from Honolulu to Los Angeles to Duluth, New York and Washington, D.C.
Proterra bus factory opening in suburban Los Angeles in 2017.
Alan Ohnsman via Forbes
The company has raised more than $500 million from investors including GM Ventures, Daimler and BMW and VCs such as Kleiner Perkins Caufield & Byers and Tao Capital Partners. But the addition of Proterra Powered operations comes amid expectations Proterra may be preparing for an initial public offering of shares. The Burlingame, California-based company hired underwriters from investment banks including JPMorgan Chase, Morgan Stanley and Deutsche Bank for an IPO that could happen this year, Reuters reported last month, citing people familiar with the matter.
Neither Horton nor Proterra CEO Ryan Popple, who was a member of Tesla’s finance team when that company went public in 2010, would confirm the IPO plans. Still, Popple told Forbes in a 2016 interview an IPO was possible within a few years, without elaborating.
“Commercial urban fleets are the best use case for EV technology and we are at the beginning of an electrification revolution for heavy-duty vehicles due to declining battery costs, improved electric powertrain technology, lowered maintenance and the immense public health benefits EVs bring to our communities,” Popple said in a statement.
A Proterra battery pack
Proterra