Xos Trucks, A Los Angeles-based electric truck startup that will go public in a few weeks, believes that transitioning delivery trucks, armoured cars, forklifts, and other heavy work vehicles to battery power isn’t a glamorous business

but it is one that will generate billions of dollars in future revenue and remove some of the dirtiest exhaust and carbon emitters from the road.

Plucky L.A. Startup Xos Plots A Multibillion-Dollar Future in Electric Truck

“We can only make so much of a dent in greenhouse gas emissions if we all wake up tomorrow and buy an electric passenger car for ourselves,” cofounder and COO Gio Sordoni tells Forbes.

“The last-mile delivery cars that drive through our cities, through our schools and workplaces, and pull up to our house 12 times a day are typically larger, dirtier diesel vehicles. That’s where we want to concentrate our efforts.”

When the five-year-old firm began showing off an electric large rig with a distinctive sculptural exterior around the same time Elon Musk presented his futuristic Tesla Semi in late 2017, it appeared to be a long shot.

Sordoni and fellow cofounder and CEO Dakota Semler were passionate twentysomethings (and Forbes 30 Under 30 alums), but they lacked the billions of funds that Musk possessed to spend in a new commercial vehicle industry.

However, they were awarded a contract by UPS to manufacture customised medium-duty delivery trucks, followed by an unexpected deal with Loomis to electrify armoured cars,

removing vast amounts of diesel exhaust produced by vehicles that are constantly idle and never switched off as they make their rounds.

This month, the business unveiled a new power train unit aimed at assisting companies like Wiggins Lift in the production of electric heavy-duty forklifts and other speciality vehicles.

Xos recently announced plans to merge with blank check company NextGen Acquisition Corp. and trade on Nasdaq as “XOS,” generating $515 million in net proceeds to help

the lean young truckmaker set up flexible production lines in factory space leased from contract truck builders Fitzgerald in Tennessee and partner Metalsa in MN.

The two plants will produce around 2,000 heavy-duty electric trucks next year, increasing from 116 in 2021.

It plans to ship out more than 30,000 trucks by 2025, bringing in more than $5 billion in yearly revenue.

The campaign to electrify cars and trucks is picking up steam as the Biden administration supports measures that would provide federal incentives for the home manufacturing of advanced batteries and essential electronic components, as well as the vehicles themselves.

Every major automaker is launching new battery-powered vehicles, while businesses like Ford, GM, and Daimler’s Mercedes-Benz are beefing up their electric options in the light-duty commercial arena, with a concentration on delivery vans.

To avoid competing against more powerful rivals, Xos is focusing on the medium-duty market, which comprises larger, heavier delivery trucks as well as a variety of service vehicles used by utilities, at ports, and in moving products between warehouses and distribution centres.

“If you’re a last-mile delivery firm, you’re seeing more crowded routes and larger parcel volumes,” says Sordoni, citing the dramatic growth of e-commerce. “You’re having these larger, more complex ones,” says the narrator.

These vans have larger cargo in the back. As a result, you’ll probably require a larger format vehicle, which is why we’re focusing on the larger van space.”

Unlike competitor electric vehicle company Arrival, which is developing electric delivery cars for UPS as well as transit buses, Xos is avoiding smaller commercial vehicles. “It’s a more competitive market there.

A lot of people are interested in that type of van. That’s where the big players start. Before they move on to higher volumes of any other commercial vehicles, Ford and Mercedes will have electric versions of those products.”

Xos recently relocated its headquarters from North Hollywood to a new facility on the Los Angeles-Glendale border, where it renovated a disused movie poster factory.

The 80,000-square-foot facility also contains the R&D team, prototype and pilot production facilities, and, for the time being, the company’s battery-pack production line.

According to Dag Reckhorn, vice president of manufacturing, higher-volume manufacture of its proprietary battery modules, made with LG Chem cells, would migrate to places closer to where its vehicles are built over time.

Along with expanded facilities, Xos is now hiring seasoned automotive and engineering personnel, including German-born Reckhorn, a veteran of Tesla and Volkswagen, and CTO Ron Ferber,

who worked at Tesla in its early days as well as EV pioneer AC Propulsion and Virgin Hyperloop.

After spells at UBS, Deutsche Bank, and Swiss oil and energy giant MET Group, Kingsley Afemikhe, the company’s Stanford University-trained CFO, joined last year.

According to Afemikhe, Xos should not need to acquire additional capital in the near future because it already has prospective orders for around 6,000 vehicles and has established arrangements with Fitzgerald and Metalsa to ramp up manufacturing to nearly 10,000 trucks by 2023.

“We wanted to make sure we could raise enough money to get to cash-flow positive and execute on our plan without having to go back to the market in a year,

two years, or three years and say, ‘Hey, we ran out of money,’” he says. “We have a lot of confidence in our planning to get there.”

Also Read :

• Chinese automaker
• defying Silicon Valley
• Wholesalling Business
• Two-thirds of wealthy business
• Smartphone business