XL Fleet’s technology is validated by
independent testing facilities adhering to EPA standards and backed
by real customer experience
XL Fleet has revenue growth, positive gross
margins, proprietary technology, repeat customers, and over 4,000
systems with more than 145 million miles on the road
XL Fleet has successfully sold the majority of
its electrified powertrain systems without subsidies in an industry
where most sales have relied on incentives
XL Fleet has highly experienced technical and
program management teams that have successfully developed a broad
range of electrified powertrain systems
XL Fleet will report fourth quarter and
full-year 2020 financial results on March 30, 2021
XL Fleet Corp. (NYSE: XL) (“XL Fleet” or the “Company”), a
leader in vehicle electrification solutions for commercial and
municipal fleets, today responded to a March 3, 2021 report
targeting XL Fleet, written by a short-seller with a disclosed
economic incentive to negatively influence the Company’s stock
price.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20210308005401/en/
Upon further thorough review, XL Fleet reiterates that the
report contains numerous factual inaccuracies, misleading
statements, and flawed conclusions. The report should not be relied
upon by existing or potential investors seeking to make an informed
investment decision.
“XL Fleet has a long track record of success in the fleet
electrification space, a proven business model with best-in-class
technology, and a customer-centric approach,” said Dimitri
Kazarinoff, CEO of XL Fleet. “We stand by the validity of our
technology, the benefits it delivers to our customers, and the
opportunity to further extend our leadership position in an
attractive market. I am incredibly proud of what our team continues
to achieve, and we remain focused on executing our strategy.”
XL Fleet system effectiveness and technology is validated by
independent testing facilities following EPA standards to save fuel
and maintenance costs, leading to customer re-orders that account
for a majority of XL Fleet revenues since inception.
- The short-seller’s ROI calculation utilizes inaccurate
information. The Total Cost of Ownership analysis included in XL
Fleet’s investor presentation is accurate and based on factual
inputs and assumptions, as summarized in the below table.
- In fact, XL Fleet has tested its systems with independent third
parties, including ESW America, who have utilized the same EPA
miles per gallon (MPG) test methodologies used by vehicle
manufacturers. Testing validates that XL Fleet’s technology
achieves or exceeds 25% improvement in MPG for hybrid electric
vehicles (HEV) and 50% improvement for plug-in hybrid electric
vehicles (PHEV).
- In fact, XL Fleet’s customers regularly achieve these and
greater performance metrics in the field, with numerous published
examples of fleets proactively touting these impressive results
that are available on the Company’s website and social media
accounts.
- In fact, XL Fleet has sold and deployed electrified powertrain
systems for over 4,000 vehicles to date, with customers who have
cumulatively driven more than 145 million miles with XL Fleet’s
technologies.
- In fact, the short-seller report fails to recognize that, as
with any motor vehicle, actual customer MPG performance heavily
depends on a range of factors related to how the vehicle is used.
This is especially true for commercial fleets, where payload, drive
cycles and amount of idling time have significant impact on actual
performance. Applications with a heavy instance of braking and
acceleration events will generally deliver the best results from
the system. This is a widely understood aspect of hybrid operation
in commercial fleets and is transparently explained in the
Company’s sales processes and referenced in marketing
literature.
- In fact, independent studies show a three-fold increase in
brake life with hybrid electric drive systems. XL Fleet has
conservatively assumed a two-fold brake life in its published Total
Cost of Ownership analysis.
- In fact, XL Fleet has steadily increased its revenue through
re-orders and increasingly large order sizes from its customers,
accounting for a majority of XL Fleet revenues since
inception.
XL Fleet is a fleet electrification leader that is delivering
innovative technology, proven customer value, growing revenues and
positive gross margins, with significant opportunity for continued
growth.
- XL Fleet’s current and future leadership position in the
electrification space is due to its established position as a
provider of hybrid electric and plug-in hybrid electric powertrain
solutions. The short-seller report cites anonymous sources to
erroneously suggest that this limits XL Fleet’s ability to deliver
all-electric solutions in the future.
- In fact, XL Fleet has established strong relationships with
leading commercial and municipal fleets throughout North America,
many of whom have already expressed interest in purchasing the
Company’s all-electric options once available. In addition, XL
Fleet has established relationships with leading vehicle
manufacturers and built a network of over 100 upfitter partner
locations to establish sales, installation and service capacity
with fleets. XL Fleet will leverage this portfolio of relationships
once its all-electric products are in production beginning in
2022.
- In fact, XL Fleet will continue to address the lasting market
opportunity for hybrid and plug-in hybrid electric vehicles, as
BNEF projects that only 28% of new light commercial vehicles will
be EVs in 2030.
- In fact, XL Fleet has successfully sold the majority of its
electrified powertrain systems without subsidies in an industry
where most sales have relied on incentives.
- In fact, XL Fleet is expanding its powertrain solution platform
to include highly complementary charging infrastructure, power
management and energy storage services through its XL Grid
division. When combined with its real-time fleet intelligence
platform, XL Link, the Company is in a uniquely strong position to
scale as it diversifies its products, applications and
geographies.
XL Fleet’s experienced technical and program management teams
are developing a full suite of electrified powertrain systems and
related energy storage systems for fleet applications.
- In fact, XL Fleet employs a highly experienced engineering team
of 43 full-time engineers with an average of 17 years of relevant
experience. XL Fleet has an innovation portfolio backed by deep IP
and a rich patent portfolio, including 25 issued patents.
- In fact, many of XL Fleet’s team members have held senior
engineering positions at leading vehicle manufacturers, Tier-1
automotive suppliers, and industry-leading automotive engineering
services firms such as AVL, IAV, Ricardo plc and FEV Group – the
same firms used by Ford, GM and other major automotive and
commercial vehicle manufacturers. Additionally, XL Fleet’s team has
decades of experience with a broad range of electrified powertrain
systems including hybrid electric, plug-in hybrid electric, battery
electric, and fuel cell electric systems.
- In fact, more than half of XL Fleet employees today are
engineers, and the Company is further expanding the scope and scale
of its in-house engineering expertise. The Company anticipates
growing its full-time engineering headcount by 50% in 2021. This
includes the 24 open engineering positions currently posted on the
Company’s public website.
XL Fleet’s executive leadership team is execution-oriented
with an unwavering commitment to the highest levels of integrity,
accuracy, and performance throughout its business and reporting
practices.
- The short-seller report makes numerous inaccurate or misleading
assertions about XL Fleet’s long-term revenue projections and seeks
to mislead investors and the market by interchangeably referring to
“backlog” and “pipeline” to feed a false narrative around XL
Fleet’s sales prospects.
- In fact, there is a significant and widely understood
difference between backlog and pipeline. A backlog refers to the
total amount of unfilled order volume backed by specific purchase
orders. A pipeline refers to the aggregate of all sales leads
across probability types being pursued by the sales team.
- In fact, XL Fleet’s 2017 funding round was completed in-line
with comparable market valuations. The increase in XL Fleet’s
valuation since this funding round reflects the significant growth
achieved by XL Fleet over a more than four-year period, the value
of its new public platform and its more than $400 million of cash
on the balance sheet, combined with the significantly enhanced
market backdrop for fleet electrification. The valuation increase
is also in-line with public market comparables, which have
experienced significant growth over the same time period.
- In fact, XL Fleet’s management team has a track record of
successfully navigating global supply chain challenges and a highly
competitive operating environment. For example, in 2019, XL Fleet,
as well as major vehicle manufacturers, were impacted by a
component shortage that affected battery supply. XL Fleet has since
established a more robust and reliable supply chain, and now has
multiple battery suppliers and proprietary battery packs in
place.
- In fact, while XL Fleet did lose CARB approval status in 2019
and was unable to secure re-approval in 2020 due in part to the
COVID-19 pandemic, the Company expects to receive CARB re-approval
in 2021.
- In fact, XL Fleet’s most recently reported quarterly earnings
included record quarterly revenue of $6.3 million and gross margins
of more than 12% in the third quarter of 2020. XL Fleet looks
forward to presenting its earnings for Q4 and FY 2020 on March 30,
2021.
“XL Fleet management, engineers and team members have spent over
a decade building a strong business and technological leadership
that enables our customers to achieve their environmental
sustainability goals,” said Tod Hynes, Founder and President of XL
Fleet. “We have a proven and successful track record with over
4,000 systems on the road that have driven more than 145 million
customer miles. XL Fleet is well positioned to continue delivering
value for customers and shareholders as we expand into new
products, services, markets and geographies in the years
ahead.”
Key Topic
Short-Seller Claim
XL Fleet Response
Source Reference
ROI Calculation
In its ROI calculation, short-seller
presents a deeply flawed analysis showing negative ROI of
53.1%.
In fact, the Total Cost of Ownership
analysis included in XL Fleet’s investor presentation is accurate
and based on fact-based inputs and assumptions. The Company
reiterates its ROI conclusions for the representative fleet of
55.7%.
- https://s26.q4cdn.com/920386777/files/doc_presentations/2020/Updated-Investor-Presentation-9.21.20.pdf
Fuel Savings
In its ROI calculation, short-seller
wrongly assumes fuel cost of $2.50/gallon.
In fact, the average fuel price in XL
Fleet customers’ markets is approximately $3.00/gallon.
Approximately 25% of XL Fleet units are in Canada, where the
average price for fuel is approximately $3.70/gallon. Approximately
10% of XL Fleet units are in California, where the average price
for fuel is approximately $3.56/gallon. The current average price
for fuel in the U.S. is approximately $2.71/gallon. The
$3.00/gallon figure utilized by XL Fleet’s analysis is
accurate.
- https://www.gasbuddy.com/can
-
https://ww2.energy.ca.gov/almanac/transportation_data/gasoline/retail_gasoline_prices2_cms.html
- https://www.eia.gov/petroleum/gasdiesel/
Vehicle Life
In its ROI calculation, short-seller
wrongly assumes a service life of 5.25 years.
In fact, the short-seller’s service life
assumption of 5.25 years, combined with its yearly mileage
assumption of 23,520 miles, would imply a total service life of
less than 125,000 miles. Commercial van expected life is 250,000+
miles. Of the 4,000 XL Fleet systems on the road, approximately 335
customer vehicles have driven over 125,000 miles, and more than 22
customer vehicles have logged over 250,000 miles. A majority of XL
Fleet vehicles on the road are not yet halfway through their useful
life. The 10-year service life utilized by XL Fleet’s analysis is
accurate, and conservative based on industry norms and customer
feedback.
-
https://news.ihsmarkit.com/prviewer/release_only/slug/automotive-average-age-cars-and-light-trucks-us-rises-again-2019-118-years-ihs-markit-
-
https://www.ntea.com/NTEA/Member_benefits/Industry_leading_news/NTEANewsarticles/Aging_trucks_create_more_service_opportunities.aspx?fbclid=IwAR3mkimdcKilEbdqwvYYSwODX5Hop5g6odQWuQdIt9cJ37I30kwxgv209PU#:~:text=In%202008%2C%20average%20age%20of,recent%20analysis%20by%20IHS%20Markit
Maintenance Savings
In its ROI calculation, short-seller
wrongly assumes total maintenance savings of $20,000, or just $200
per vehicle.
In fact, it is widely understood that a
hybrid system captures energy normally dissipated in break heat
causing wear. Instead, this energy is stored in the battery for use
to later help accelerate the vehicle in a process called
regenerative braking. This helps add significantly to the vehicle’s
brake life. XL Fleet’s analysis assumes normal brake pad and rotor
replacement every 40,000 miles, which carries a parts and labor
cost of $650 in each instance. For reference, the Green America
report referenced herein states that a hybrid car’s brake pads
“last three times as long as those in a conventional car, reducing
the frequency of break pad replacement.”
-
https://www.greenamerica.org/green-living/money-saving-perks-hybrid-car
- https://doi.org/10.2172/894985
Fuel Economy
In its report, short-seller wrongly states
that XL Fleet’s claims of 25%+ MPG gains are incorrect and
misleading.
In fact, XL Fleet’s fuel economy
performance has been validated by independent sources including
Automotive Testing and Development Services, Inc. and ESW America,
Inc. Additionally, short-seller does not properly account for the
significant impact of other variables. With any motor vehicle,
actual customer MPG performance heavily depends on a range of
factors related to how the vehicle is used. This is especially true
in the commercial fleet market, where traffic patterns, payload,
drive cycles, amount of idling time, and weather have significant
impact on actual performance.
- Report: Fuel Economy Tests using
XL, Inc's Hybrid Powertrain System X3.0 2017 Ford F-250 Pickup
Truck
- Report: ‘Fuel Economy Tests using
XL Hybrids, Inc.’s Hybrid Powertrain System’
- Report: ‘Fuel Economy Tests using
XL Hybrids, Inc’s Hybrid Powertrain System X3.0’
- Report: 'Fuel Economy Tests using
XL Hybrids, Inc's XLP Hybrid Powertrain System X3.0 Ford F150
Plug-In Hybrid Electric Vehicle (PHEV)'
- https://www.fueleconomy.gov/feg/factors.shtml#:~:text=Aggressive%20driving%20(speeding%2C%20rapid%20acceleration,more%20idling%20will%20lower%20MPG.&text=increase%20aerodynamic%20drag%20and%20lower%20fuel%20economy
- https://www.fueleconomy.gov/mpg/MPG.do?action=browseList2&make=Honda&model=Accord%20Hybrid
Driver Cost
In its ROI calculation, short-seller
wrongly assumes driver cost of $18.52/hour.
In fact, XL Fleet’s analysis is based on
fully-loaded cost of labor of $50/hour. This figure reflects the
blended nature of XL Fleet’s customer drivers, which includes
services technicians, utility workers, government employees, and
other specialized trades that cost companies even more than
$50/hour.
System Cost
In its ROI calculation, short-seller
wrongly assumes hybrid kit cost of $17,000.
In fact, XL Fleet’s analysis is based on
volume pricing for XL’s hybrid Transit van system of $13,000 per
system. This pricing is based on an actual 2020 customer order,
including estimated cost of installation.
About XL Fleet Corp.
XL Fleet is a leading provider of vehicle electrification
solutions for commercial and municipal fleets in North America,
with more than 145 million miles driven by customers such as The
Coca-Cola Company, Verizon, Yale University and the City of Boston.
XL Fleet’s hybrid and plug-in hybrid electric drive systems can
increase fuel economy up to 25-50 percent and reduce carbon dioxide
emissions up to 20-33 percent, decreasing operating costs and
meeting sustainability goals while enhancing fleet operations. XL
Fleet’s plug-in hybrid electric drive system was named one of TIME
magazine's best inventions of 2019. For additional information,
please visit www.xlfleet.com.
Forward Looking Statements
Certain statements in this press release may constitute
“forward-looking statements” within the meaning of the federal
securities laws. Forward-looking statements generally are
accompanied by words such as “believe,” “may,” “will,” “estimate,”
“continue,” “anticipate,” “intend,” “expect,” “should,” “would,”
“plan,” “predict,” “potential,” “seem,” “seek,” “future,”
“outlook,” and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
These statements are based on various assumptions, whether or not
identified in this press release, and on the current expectations
of management and are not predictions of actual performance.
Forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements, including but not limited to
failure to realize the anticipated benefits from the business
combination; the effects of pending and future legislation; the
highly competitive nature of the Company’s business and the
commercial vehicle electrification market; litigation, complaints,
product liability claims and/or adverse publicity; cost increases
or shortages in the components or chassis necessary to support the
Company’s products and services; the introduction of new
technologies; the impact of the COVID-19 pandemic on the Company’s
business, results of operations, financial condition, regulatory
compliance and customer experience; the potential loss of certain
significant customers; privacy and data protection laws, privacy or
data breaches, or the loss of data; general economic, financial,
legal, political and business conditions and changes in domestic
and foreign markets; the inability to convert its sales opportunity
pipeline into binding orders; risks related to the rollout of the
Company’s business and the timing of expected business milestones;
the effects of competition on the Company’s future business; the
availability of capital; and the other risks discussed under the
heading “Risk Factors” in the definitive proxy statement/prospectus
filed on December 8, 2020 and other documents that the Company
files with the SEC in the future. If any of these risks materialize
or our assumptions prove incorrect, actual results could differ
materially from the results implied by these forward-looking
statements. These forward-looking statements speak only as of the
date hereof and the Company specifically disclaims any obligation
to update these forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210308005401/en/
Media Contacts: pr@xlfleet.com
Investor Contact: xlfleetIR@icrinc.com
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