The manufacturer of electric truck chassis, Xos Trucks, is going public with a blank check backed by a Special Purpose Acquisition Company (SPAC). Xos partners with NextGen Acquisition Corp. merge with an implied market capitalization of $ 2 billion.
North Hollywood, Calif., Xos receives $ 575 million from NextGen (NASDAQ: NGAC). NextGen raised $ 335 million through an IPO in which investors gave NextGen a “blank check” to conduct a merger. A further $ 220 million came from a private investment in public equity (PIPE).
Proceeds for Xos assume no NextGen investors will return stock before the business combination completes in the second quarter. In the event of a merger, NGAC shares would trade under the ticker symbol XOS.
Xos manufactures a customizable chassis with wiring, battery mounting and axle mounting systems for medium and heavy electric vehicles. Its customers include United Parcel Service (NYSE: UPS), armored truck company Loomis, and Japanese Hino Motors Ltd., a subsidiary of Toyota Motor Corp. (NYSE: TM).
Xos claims a backlog of 6,000 orders including an order for 100 trucks from Thompson Truck Centers, a subsidiary of Thompson Machinery headquartered in Nashville, Tennessee. The two companies are aiming for 1,000 medium and heavy trucks over the next three years. Most of the bodies are to be built by Morgan Olson, said a Xos spokeswoman.
Xos also offers Fleet-as-a-Service (FaaS), which bundles financing and maintenance for a fixed monthly fee. FaaS aims to increase Xos lifetime revenue per vehicle. In a similar program, Nikola Corp. (NASDAQ: NKLA) to offer Class 8 fuel cell trucks, maintenance and hydrogen fuel at a set price for seven years.
Scaling option
“Today’s announcement marks an important milestone that will enable Xos to expand its vehicle and battery production capacity, advance our next-generation battery and vehicle control systems, and bring thousands more Xos vehicles to the road,” said Giodano Sordoni, Co-founder and chief operating officer of Xos said in a press release.
Xos started out as Thor Trucks in 2016. Its first prototype, a class 8-day cab built on its electrified chassis, made comparisons with the Tesla (NASDAQ: TSLA) Semi that was introduced a few weeks earlier in 2017. The Semi has been delayed several times beyond its original 2019 production target.
Xos gave up the Thor name in a trademark dispute with recreational vehicle maker Thor Motor Coach in 2019. Around the same time, he focused on medium-duty class 5-7 trucks. Class 8 trucks are at stake. But they stay in Xos’ plans, Co-Founder and CEO Dakota Semler told FreightWaves in a May 2020 interview.
“Our goal was to offer customers a superior alternative to traditional fossil fuel vehicles,” said Semler in Monday’s press release. “As a former fleet operator, we really appreciated the challenges of operating and maintaining commercial fleets, especially given accelerating emissions requirements.”
The SPAC search
NextGen looked at more than 100 merger opportunities before choosing Xos. The growth of e-commerce and last mile transportation has greatly influenced his choice.
“The strong mundane tailwind from climate change and e-commerce anchors our investment belief in Xos,” said George Mattson, co-founder and co-chair of NextGen and a former partner at Goldman, Sachs & Co.
“Climate change is one of the greatest challenges in the world. And commercial vehicles are the largest per capita greenhouse gas emitter in the transportation industry, ”said Mattson.
Semler and Sordoni will continue to lead Xos along with Chief Technology Officer Robert Ferber and Chief Financial Officer Kingsley Afemikhe. Semler and Sordoni will serve as directors of the company along with Mattson on a newly formed board of directors. NextGen promises Xo’s guidance in terms of strategic, operational, and governance experience.
“Because of our work, we believe Xos is best positioned to capture the rapidly growing demand for commercial electric vehicles with a compelling customer proposition,” said Gregory Sum, co-founder and co-chair of NextGen.
Sum is the past chairman and CEO of life science company PerkinElmer Inc. He was also vice chairman of the Carlyle Group’s private equity firm.
The Xos talks with NextGen were first reported by Reuters on February 8th.
On the subject of matching items:
Xos Trucks may be next public on SPAC: Reuters
DLL works with Xos to finance electric vehicles
Start of the Xos electric vehicle towards series production
Click here for more FreightWaves articles by Alan Adler.
