Investing in Electric School Buses
A couple years ago, while visiting my brother and his family in Texas, I saw something that really messed with my head.
You see, the first morning I was there, I walked my nieces to their bus stop and waited patiently for the bus to come pick them up.
We got to the bus stop about 10 minutes before the bus was supposed to arrive at 7:20 a.m., but it never showed.
First it was 7:20, then 7:25, then 7:30.
I asked my niece if this was normal. She said sometimes the buses were late because the school system is understaffed. Apparently there’s a shortage of bus drivers.
By 7:35, I decided I would just drive them to school myself as I didn’t want them to be late.
On our way out of the neighborhood, my youngest niece yelled out, “There’s the bus, Uncle Jeff. It’s right there!”
And sure enough, there was their bus...
Parked on the shoulder of the road with a sleeping bus driver propped against the driver’s side window. Needless to say, I kept driving.
Later that afternoon, I got word from my brother that their bus driver had fallen asleep while taking a nap in the bus, as he got there about an hour early. Apparently he came directly from his night job.
I can’t deny that I respect this man’s hustle, but how long has this guy been driving a bus after working what I understand is a 12-hour night shift at a distribution center?
Of course, being that they only pay these folks minimum wage to drive children to school every day, I suppose I’m more bothered by the lack of interest by the school administration in providing appropriate compensation for their bus drivers, who have a very important job.
Of course, over the long run, it probably doesn’t matter.
Eventually, these buses won’t even have drivers.
They'll probably just have bus monitors to watch the kids when they get on the bus.
After all, autonomous buses are already here.
In 2019, Volvo held a live demonstration of its autonomous bus in Sweden and Singapore. It’s not just an idea. It’s an actual vehicle that’s actively being tested all over the world.
And earlier this year, here in the U.S., fleet managers at Michigan State University added a new autonomous bus to their fleet.
But here’s the most interesting thing about this…
There are currently about a dozen other companies also working on autonomous buses, and every single one of them has one thing in common...
They’re ALL electric. Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
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They’re all being built on electric platforms because internal combustion buses will ultimately be relics of the past — honored in museums and our memories, but no longer on the streets.
Of course, it’s still early in the game, and this transition won’t happen overnight. But according to a study recently published by Custom Market Insights, the global electric school bus market was valued at about $18 billion in 2021. By 2030, it’ll hit around $40 billion, representing a CAGR of nearly 10%.
I actually think it’ll exceed that, as this study did not take into account new school bus mandates in Europe, China, and the U.S. It also did not include the $5 billion earmarked for electric school buses in the infrastructure bill.
Now, we know that companies such as BYD (OTC: BYDDF) and Volvo (OTC: VLVLY) have been very active in the electric school bus space, but there’s actually only one pure-play electric bus stock that builds not only buses but also charging stations, infrastructure, and components too. In addition, it provides battery systems for Thomas Built Buses, which is one of the largest school bus manufacturers in the world and boasts more than half a billion dollars in annual revenue.
In fact, the company just delivered its 200th electric bus to a single school district in Indiana.
Given the maintenance and operational cost advantages of electric buses, it doesn’t take a rocket scientist to know that most new school bus orders will be for electric buses. And the leader in this space is a company I’ve been telling you about for the past few months.
In its most recent quarter, the company reported record quarterly revenue surpassing $96 million, representing growth of 55% year over year.
Its transit deliveries hit a new record of 60 new electric buses while its battery system deliveries grew 274% year over year.
It's also worth noting that its charging solutions segment grew 765% compared with Q3 2021, with customers in both the transit bus and non-transit bus commercial vehicle markets.
And here’s the best part…
The stock is currently trading at a huge discount.
This morning, I’m seeing price targets on this thing as high as $10.00 a share, but you can buy it today for less than $5.00 a share, representing an estimated gain of more than 100%.
I don’t know about you, but picking up what could be an easy double before we close out the trading year seems like a wise decision to me... unless, of course, you hate money.
You can read more about this electric bus company and why I’m so bullish on it in this new research report I just posted.
Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor's page.
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