The California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, or HVIP, has officially opened on Tuesday, when it began accepting new voucher requests. The funds are expected to be available in two waves, with half of the about $165M available on June 8. Commenting on the program, Colliers analyst Michael Shlisky said he views it as an "important development" for the electric and clean vehicles stocks in his coverage universe, as the vouchers encourage trial. His top picks in the EV-CV space include Lightning eMotors (ZEV), Electric Last Mile (ELMS), and Hyzon Motors.
CALIFORNIA HVIP: California's HVIP is now accepting new voucher requests, with a total of $165M available in two waves: half of the amount on June 8 and the other half two months later on August 10. Class 8 trucks performing drayage operations as well as any vehicles purchased by a public government entity are exempt from the two-month pause. According to the initiative's website, "Launched by the California Air Resources Board in 2009, HVIP is the earliest model in the U.S. to demonstrate the function, flexibility, and effectiveness of first-come first-served incentives that reduce the incremental cost of commercial vehicles. HVIP is administered by CALSTART, a national clean transportation nonprofit consortium, on behalf of CARB."
'IMPORTANT DEVELOPMENT': Commenting on California's HVIP program kick off, Colliers analyst Michael Shlisky said he views the initiative as an "important development" for the electric and clean vehicles stocks in his coverage universe, as the vouchers encourage trial. The analyst noted that fleets can only obtain 30 vehicles with a voucher. At the high-end, this could mean a $7.2M benefit for a fuel-cell electric bus fleet, but for a typical large delivery fleet using Class 6 Walk-in Vans, the maximum benefit is likely to be closer to $2.5M, he added, noting that the maximum benefit to a Class 8 fleet is $3.6M. His top picks in the EV-CV space include Lightning eMotors, Electric Last Mile, and Hyzon Motors. Electric Last Mile is going public thanks to a special purpose acquisition company merger with Forum Merger III Corp. (FIII), while Hyzon is combining with SPAC Decarbonization Plus Acquisition Corp. (DCRB).
Discussing the voucher program's potential impact for some EV-CV names, Shlisky noted that there are no Hyzon vehicles in the California HVIP program for this year. Most of Hyzon's near-term sales will be in Europe, Asia, and Australia. But when Hyzon is ready for California, which he believes will happen in 2022, Class 8 FCEVs can get double the subsidy versus BEVs under current rules. Regarding Electric Last Mile, its Class 1-2 Urban Delivery vehicles are not of the right weight class to qualify for HVIP Vouchers. However, the company's Urban Delivery is eligible for the federal $7,500 EV credit in all states. This will have the effect of making the upfront cost compared to an internal combustion engine, or ICE, truck essentially equal, with fuel and maintenance savings to boot. The analyst views this subsidy as a "game-changer" for Electric Last Mile, as it makes the adoption of its vehicle a "no-brainer" for cost-minded customers. The analyst also highlighted that Lightning eMotors has a full set of Class 3-6 vehicles eligible for vouchers, including $45,000 for a Class 3 Transit T-350, $60,000 for an F-550 passenger vehicle, and $85,000 for a Class 6 Chevrolet/Isuzu truck, among many others.
According to the State of California, no Nikola (NKLA) vehicles are currently eligible for HVIP Vouchers as the company's Tre BEV and other vehicle models are not commercially available at this time, Shlisky said. He expects the Tre BEV to be included in next year's program, if Nikola's development and production milestones are met. While Shyft Group (SHYF) does not currently make EVs, many EV Class 5-7 delivery vans are on California's approved-vehicle list and the company likely will have ample upfit opportunities, the analyst contended. He believes this includes many products from Motiv, with which Shyft has a JV for Walk-In Vans. Lastly, Shlisky pointed out that Workhorse (WKHS) has obtained approval for its C-650 and C-1000 Standard and Extended Range Walk-In Vans, all of which can generate a $45,000 voucher.
PRICE ACTION: In Tuesday afternoon trading, shares of Decarbonization Plus Acquisition are fractionally down at $10.67, while Forum Merger III and Shyft are fractionally up at $9.99 and $41.23, respectively. Shares of Nikola have also gained over 5% to $18.57, Workhorse's stock has jumped more than 18% to $16.50, and shares of Lightning Motors have risen almost 13% to $9.50.
Lightning eMotors
+1.13 (+13.45%)
Electric Last Mile Solutions
+
Forum Merger III
+0.02 (+0.20%)
Decarbonization Plus Acquisition
-0.01 (-0.09%)
Nikola
+1 (+5.67%)
Shyft Group
+0.11 (+0.27%)
Workhorse Group
+2.67 (+19.21%)