Vicinity Motors targets massive US market after conquering Canada with its mid-size buses

Vicinity Motors Corp., a manufacturer of electric, CNG, gas, and clean-diesel buses for both public and commercial enterprise use, has 90% of the mid-size bus market in Canada. Hundreds of its buses are currently on the roads. Now founder and CEO Will Trainer wants to repeat that success in the massive US market. “We're just kicking into high gear with our marketing efforts right now. And we truly expect to dominate the market in that midsize category,” said Trainer, whose company changed its name to Vicinity from Grande West Transportation Group in March 2021.  In early July the company broke ground on its new manufacturing facility and US headquarters in Ferndale, Washington State, about a 30-minute drive across the border from Vicinity’s mothership in Vancouver, with easy access to port, rail, truck shipping, and receiving facilities. The company has earmarked up to $25 million to get the plant up and running.  Vicinity said operations at the facility, its first plant in the US, will include assembly, pre-delivery inspections, and research and development, as well as general technical work and servicing. The facility is scheduled to begin operation in the first half of 2022, starting with a workforce of 30-40 that is expected to swell to the hundreds over time.  “The new facility in Washington is really key to our US growth strategy and we're going to use that as a catalyst to really push this forward,” Trainer said.  The company, which emphasizes that the facility is “Buy America” compliant, intends to work with state economic development officials and local colleges to offer training programs, especially given the need for skilled electrical and mechanical engineers. “We're ready to start producing vehicles in the US with US labor,” added Trainer. “Those are very good, high-paying jobs that are coming into Washington State.” Once operational, the Washington State plant will crank out its line of heavy-duty, medium-duty, and light-duty buses across four modes of engine power systems - all of which can be customized to meet customers’ unique needs. The target is 1,000 vehicles a year.   Demand shifting to EVs Hiowever Trainer said that eventually, he sees demand shifting mostly to electric vehicles - namely its Vicinity Lightning EV bus and newly announced industrial electric truck line, the VMC 1200. In fact, the company in July won its first order worth $1 million-plus for 10 trucks.    “Everything's trending towards the EVs,” the CEO said. For Trainer, Washington State has been a crucial partner in Vicinity’s efforts to build a deeper stronghold in the US. The state has selected Vicinity’s buses under a state-wide purchasing contract that gives state transit agencies the right to buy from the company's diverse portfolio. Also, the state is mulling legislation that would require all cars sold after 2030 not to burn fossil fuels, thus giving, in all sense, EV-makers the business. Even Washington State Governor Jay Inslee attended the groundbreaking ceremony as a tip of the hat to Vicinity. “He's very, very keen on seeing this type of investment, particularly in alternative greener manufacturing coming into his state. And he's just opening the state’s arms for us.” Trainer said. “We're just right on the perfect path here.” Also key to Vicinity’s success is its partnership with ABC Companies, the firm’s US distribution partner which controls around a third of the US motorcoach market. Beyond Washington State, Vicinity will use ABC’s help to tap the California market as the US’s largest state follows a similar clean-energy path as its Pacific Northwest neighbor toward all-electric vehicles.   “We've aligned ourselves well with a very strong sales organization. They're nationwide,” he said. “They really have the same philosophy as what we have, that you have to work hard to get that first order. But you need to work harder to ensure that they're going to be happy and give you repeat business. And that's why ABC Companies has a lot of contacts and a lot of business already.” While the company builds its Washington State facility and ramps up sales marketing efforts, Vicinity has already established itself in the US market. In fact, Trainer said, a US airline has ordered 92 buses and another carrier is mulling a purchase as well.  “What has been our success is we can really custom-build whatever the customer wants, and that's why we ended up with this large US airline order,” he added. “We always say, our vehicles are all-purpose built.” Uplist to NASDAQ Vicinity recently achieved another milestone, just two days before its groundbreaking in Washington State its stock uplisted to the NASDAQ from the Toronto Venture exchange. “We want to ensure that we can reach the US investor and that's really what the Nasdaq listing does,” he said. “It allows us access to capital in the US but access to the US investor, which we did not have.”  In the meantime, Vicinity does not have any formal plans or requirements to leverage its Nasdaq presence to fund-raise. The company has more than $20 million in working capital at its disposal. “We're in a growth mode, and as we need growth, we love the idea that we have the access to the capital if and when we need it,” Trainer said.  Indeed, the company is growing - and profitable. Vicinity started 2021 with a $50 million backlog and, so far, has delivered $27 million of it as new orders come in, such as a C$6 million order from the Calgary Transit system for 14 Vicinity Lightning EV buses.  “It's a tough market out there to get into these public transit agencies in particular,” said Trainer, noting that Vicinity’s buses are “extremely well priced” versus the competition. “You've got to have a very solid background. You've got to have units on the ground for quite a few years. You need specialized testing from the FTA’s Altoona facility (Federal Transit Administration) and various other certifications like that. And that's what we bring.” As Vicinity heads out to expand its US footprint, Trainer noted: “We have revenue, we have existing customers, and we're delivering our product as we speak.”  Contact the author: patrick@proactiveinvestors.com Follow him on Twitter @PatrickMGraham