Lion Electric

A space that continues to be undervalued is commercial vehicle electrification. Every school bus, tractor, fire truck, garbage truck, and ambulance is going to be electric. The only question is which companies are going to win all the contracts and be successful.

My general sentiment when it comes to these government contracts is that they are going to heavily favour local suppliers. The US government is going to buy made in America and the Canadian government is going to buy made in Canada. 

Lion Electric is going after both these markets, by being a Canadian company with factories in both Canada and the USA. They can offer either a Made in Canada or Made in America product to local governments.

Lion has a somewhat different strategy than Proterra by being a vertically integrated player. Proterra sells powertrains to existing OEM(s) whereas Lion directly sells electric vehicles designed from scratch. I think there is a place for both business models to be successful, and I like splitting my bets across multiple companies pursuing commercial vehicle electrification.

There is so much money flooding into this space over the next 10-15 years as governments ramp up electrification. At a 2.18B Market Cap there is a lot of potential upside ahead.

My bet on Lion Electric is that they are going to get a ton of government support in Canada. Even if they fail to disrupt some of the large American manufacturers, several billion dollars a year in revenue seems feasible.

Disclaimer: This does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this article should consult with his or her advisor.