Restraint is helping Vancouver-based medium- and heavy-duty electric vehicle designer and manufacturer GreenPower Motor Company Inc. remain a profitable company, unlike many of its peers, according to CEO Fraser Atkinson.

GreenPower recorded revenue of $34.2 million (all figures US) and $5.4 million in profit for a nine-month period ended Dec. 31, 2023. That represents a 40 per cent increase in revenue, from $24.4 million, reported during the nine-month period ended Dec. 31, 2022.

To further support its electric vehicle (EV) production, GreenPower secured a loan up to $5 million from Export Development Canada (EDC).

Unlike competitors Proterra or Lightning eMotors that have declared bankruptcy, GreenPower says it is making money on each vehicle sold and is not rushing to fulfill every potential deal.

“I think that’s a discipline that most other EV companies didn’t have,” Atkinson said in an interview with Sustainable Biz Canada. “We’ve been very mindful of how and where we spend the money. I firmly believe that where we are now with our current business model, we’re in a position where we’re certainly over time improving on our gross profit margins.”

A smooth drive financially

Even as the EV industry shows signs of a slowdown and some of GreenPower’s competitors stumble, the company has held on because it holds a unique position, Atkinson said.

He attributed its stability to its business model. GreenPower is being systematic with how it is building its product catalogue. Rather than building EVs and hoping the sales will come, GreenPower aims for a 30 per cent gross profit on its sales activity. “Having that mentality means we aren’t going to take every deal or we’re not going to try to win every deal.”

It is one of the few EV companies in the medium- to heavy-duty space consistently recording a gross profit, he claims, because it is making money on every unit sold.

Though he does not discount there has been a chilling effect on the EV sector, Atkinson said the EV sales slowdown has impacted primarily the light-duty consumer market, rather than GreenPower’s specialty in medium- and heavy-duty segment. He attributed the declining interest in EVs to the lack of charging infrastructure and customers needing more time to adjust.

Atkinson said he is satisfied with the company delivering 196 vehicles for the nine months ended Dec. 31, 2023, and GreenPower expects to grow its delivery volumes in coming months and years.

EDC funding for production

To boost its EV production for customers, GreenPower has secured a revolving loan up to $5 million from EDC. Described by Atkinson as a “perfect fit for us in terms of many of the customer orders that we have in the school bus space,” it complements an $8 million credit line the company received from BMO in 2020.

The funds will be used to support production in its U.S. sites in West Virginia and California, and in acquiring EV components from around the world.

The revolving loan is not GreenPower’s first engagement with EDC. The company previously received a guaranteed $5 million in stand-by letters of credit from the Canadian Crown Corporation.

‘Go where the money is’

GreenPower is currently servicing mostly American clientele. It is meeting orders for 38 of its BEAST school buses in West Virginia, 35 school buses in California, its first in Arizona, and an undisclosed order book for New York State. Its geographic reach extended to the Denver and Las Vegas metropolitan areas in Q3 2023 with the appointment of McCandless Truck Center as its commercial dealer.

Atkinson said GreenPower is prioritizing the U.S. market because its geographic approach is to “go where the money is.” Though there are federal and provincial zero-emissions vehicle packages in Canada, the U.S. is pushing ahead with EV school bus mandates in California and New York.

Colorado has the funding and requirements for its school districts to make it a good market for GreenPower, and the gambling centres like Las Vegas, Reno and Carson City are strong markets for GreenPower’s shuttle bus products, he explained.

A path to continued profitability in 2024 will revolve around manufacturing of refrigerated box trucks and vehicle bodies to drive the business of its commercial vehicle group, and learning to produce more school buses in a shorter period, the CEO said.