What happened
Shares of XL Fleet (XL 12.83%) have taken a beating since a short-seller report in February said its sales order pipeline has been exaggerated. Today a new order announcement from the company that electrifies fossil-fuel-powered trucks has investors buying back in. At 10:30 a.m. EDT, shares in XL Fleet were up 26% over Tuesday's closing price.
So what
XL Fleet said it received an order to electrify the vehicle fleet of Apex Clean Energy, a Virginia-based developer and operator of utility-scale wind and solar power facilities across North America. The order is the first fleet electrification investment for Apex as it aims to reduce its carbon emissions. The order consists of 19 electrified Ford (F 0.47%) F-series pickup trucks. It will be split between 10 plug-in hybrid and nine hybrid electric fleet vehicles, with delivery expected in the second quarter of 2021.
Image source: XL Fleet.
Now what
XL Fleet provides hybrid and plug-in hybrid electric drive systems for commercial fleet vehicles built by automakers including Ford, General Motors (GM 4.37%), and Isuzu, and for fleet owners like PepsiCo (PEP -2.97%) and FedEx (FDX 0.59%). It's also developing a fully electric offering and is adding XL Grid, a division for addressing the charging infrastructure needs of its more than 200 customers.
Apex employees will use the plug-in hybrid models where there is access to charging infrastructure, while the hybrid trucks take advantage of regenerative braking for power where there is no access to charging stations.
Apex president and CEO Mark Goodwin said in a statement, "XL Fleet gives us the ability to begin working toward our carbon reduction goals immediately by electrifying our vehicle fleet with proven solutions that make strong financial sense."
Investors need to decide if XL management is correct given the potential market or if detractors are right that there isn't a market for its hybrid systems. Today's news indicates there is some immediate customer demand.
