Proterra's (PTRA) business decision to become more than an electric bus manufacturer has been a good one. In this video clip from "The Rank" on Motley Fool Live, recorded on March 28, Fool.com contributors Travis Hoium and Matt Frankel discuss how the company's pivot to provide batteries and infrastructure for semi-trucks and heavy machinery could be a significant move.
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Travis Hoium: I just wanted to show quickly what they do because Proterra really started as an electric bus company and that was where they started their technology building. Their CEO came from Tesla (TSLA 1.50%). But then they said, we're doing all this work building technology for buses, why don't we sell it to other partners who are making backhoes and semi-trucks.
They're the manufacturing partner of Nikola. These are the kind of products that they make, so battery technology and then drive trains as well. Critical products if you're designing heavy machinery that's going to be powered by an electric drive train as opposed to a gasoline-powered drive train or diesel-powered drive train.
I really like the potential for this market. There are only so many players in it too. This is kind of the pure-play. We've seen what disruption looks like with electric vehicles in the consumer market. It's taking a very long time, but we're getting there, where it's natural that this is going to be the future of transportation.
I think we're going to see the same thing in some of these heavy-duty vehicles. Not every application, but there are going to be applications where you go, I use this piece of heavy machinery for three hours at a time. Why don't I make this an electric-powered piece of machinery because that's actually, it provides better torque. There can be better performance there.
I really like where they're positioned in the market and they've become a go-to supplier for a lot of other manufacturers. They're like an OEM in the electric vehicle space. I don't know if you have something to add there, Matt.
Matt Frankel: I think Proterra's often overlooked because they're not sexy like Tesla or Lucid (LCID -1.39%).
Hoium: Absolutely.
Frankel: They still make their buses, by the way. They delivered over 200 of them last year. But let me share this. Here's the cool thing about Proterra. Now that they've pivoted to just providing batteries and infrastructure for all commercial vehicles, their market opportunity is literally every commercial vehicle you see, $225 billion global market. That's in annual revenue in global commercial vehicles. Really big market opportunity. They are one of my favorite electric vehicle companies. Like I said, I feel like it's overlooked because it's not like consumer-facing really.
Hoium: Well, thinking about all those vehicles that you just saw pictures of too, those companies aren't all going to make their own battery and drive train technology. They're going to have to lean on somebody else to do that. If Proterra becomes the go-to partner, that's a really great position for them to be in.
Frankel: Yeah, especially if they have superior technology.
