The electric vehicle market is a whirlwind of innovation, regulation, and shifting alliances. GreenPower Motor Company, a rising player in the medium and heavy-duty EV space, is navigating these turbulent waters with a keen eye on mandates and a surprising silence about its largest customer. While the recent earnings call buzzed with excitement over new school bus orders and the launch of the Mega BEAST, a conspicuous absence hung in the air – any mention of the 1,500 cab and chassis order from Workhorse.

The Workhorse deal, announced with fanfare in 2022, was a game-changer for GreenPower. It represented a significant chunk of their projected revenue and solidified their position as a major cab and chassis supplier. Yet, in the recent earnings call, while executives eagerly detailed progress on school bus production and the burgeoning demand for their EV Star Cab and Chassis, Workhorse was relegated to a single, vague sentence: "We did comment in our earlier remarks that while we have not had some cab and chassis deliveries, we are currently working on scheduling in terms of future deliveries for our cab and chassis."

This omission is particularly striking in light of Craig Irwin's (ROTH MKM) question regarding the "large customer" and "market developments" for the cab and chassis product. Fraser Atkinson, GreenPower's CEO, acknowledged the "pause" in deliveries but focused his response on the "rapidly developing market" for the EV Star Cab and Chassis and its use in their Nano BEAST production and Lion Truck Body partnership. He emphasized the breadth of application and growth seen in this segment, effectively sidestepping any direct mention of Workhorse.

Reading between the lines, a hypothesis emerges: GreenPower may be subtly distancing itself from Workhorse. The reasons for this potential shift are multifaceted. Workhorse, once a darling of the EV market, has faced significant challenges in recent years, including losing a lucrative USPS contract and struggling with production delays. Its stock price has plummeted, casting a shadow of uncertainty over its future.

Furthermore, GreenPower is clearly capitalizing on the momentum building in the school bus market. With mandates for electric school buses coming into effect in several states, including the lucrative markets of California and New York, GreenPower is wisely focusing its resources on meeting this growing demand.

GreenPower's Shift in Focus: School Buses vs. Cab and Chassis

The following table highlights GreenPower's delivery numbers for school buses and cab and chassis units, showcasing a clear shift in focus.

The numbers support this hypothesis. In the Q3 2024 earnings call, GreenPower reported a record 16 school bus deliveries, a significant increase from the single Nano BEAST delivered in the same quarter of the previous year. Moreover, the company secured a $5 million revolving loan agreement specifically for all-electric school bus production, further demonstrating their commitment to this segment.

The shift towards school buses is also evident in the company's marketing efforts. Michael Perez, VP of School Bus, Contracts & Grants, highlighted the launch of the Mega BEAST, a 90-passenger Type D school bus with an impressive 300-mile range. He also announced a 25 Mega BEAST order for the Montebello School District in California, secured just two weeks after the product launch. This order alone, utilizing vouchers from the HVIP School Bus Set-Aside Program and the EPA Clean School Bus Program, represents a major win for GreenPower.

In contrast, there was no mention of any new orders for cab and chassis units in the Q3 2024 earnings call. This silence, coupled with the vague language surrounding Workhorse, suggests that GreenPower may be prioritizing other avenues for growth.

"Key Takeaways: GreenPower's recent earnings call highlighted a significant shift in focus towards the school bus market. While the company hasn't explicitly abandoned its partnership with Workhorse, the lack of concrete information regarding deliveries raises concerns. The school bus market, driven by mandates and incentives, presents a more stable and predictable growth path for GreenPower."

While GreenPower hasn't explicitly stated a change in strategy, the evidence points towards a silent shift. The company's emphasis on school bus production, coupled with the absence of concrete information regarding Workhorse deliveries, indicates that GreenPower may be hedging its bets. The school bus market, with its strong mandates and generous incentives, offers a more stable and predictable path to profitability. While the Workhorse partnership may still have some life left, it appears GreenPower is no longer placing all its chips on that single, volatile bet.

This subtle shift, unnoticed by most analysts, could be a masterstroke in the long run. By capitalizing on the booming school bus market and diversifying its customer base, GreenPower is positioning itself for sustainable growth in the rapidly evolving electric vehicle landscape. As the saying goes, the squeaky wheel gets the grease, but sometimes, a silent shift speaks volumes.

"Fun Fact: According to the EPA Clean School Bus Program, replacing just one diesel school bus with an electric bus is equivalent to taking five passenger cars off the road!"