Vicinity Motor Corp. (TSX-V:VMC) said it has signed a licensing and marketing agreement partnering with Optimal Electric Vehicles, LLC, to serve as the exclusive North American distributor of its all-electric product line through Vicinity's wide dealer network.
The Vancouver, British Columbia-based company said the agreement covers sales of Optimal’s S1 and E1 product lines for 10 years in return for an investment of US$20 million.
Optimal-EV, a market leader in the low-floor electric shuttle bus segment, will produce the vehicles and chassis for Vicinity, which will market and sell the VMC Optimal-branded vehicles directly in Canada and through a dealer network in the US, with the two partners sharing in revenue and profits.
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Vicinity said the deal is aimed at combining the strengths of the two companies in engineering, procurement, design, sales and support. It gives it access to over US$30 million in firm orders for deliveries in 2022, letters of intent (LOI) with existing Optimal-EV dealers for potential sales of US$194 million in 2023, and a potential sales pipeline of over US$600 million.
"With a clear market segment leadership position in Canada and a growing portfolio of US customers, we are confident we can deliver sales results for Optimal-EV and further enhance our presence in the electric vehicle and Medium & Light Duty Cutaway categories,” Vicinity founder and CEO William Trainer said in a statement.
“In a total addressable market of US$26 billion, the agreement will provide access to an order book of over US$30 million for delivery in 2022.
"We expect to add to this backlog significantly through our current customer base in Canada and our new partnership with EAVX, a JB Poindexter & Co. subsidiary, announced earlier this week.”
Vicinity said Optimal-EV has utilized decades of OEM-level engineering prowess and five years of EV-specific development experience to deliver the only low-floor electric shuttle bus in its class.
The E1 and S1 products offer industry-leading performance, features, comfort and durability, it added.
"Vicinity was an ideal fit for this partnership with strong brand recognition throughout North America and a leading position in the electric bus market with its groundbreaking Vicinity Lightning EV,” said Optimal-EV CEO Song Young.
“This synergy - along with their strong commitment to service, long-standing customer loyalty and solid reputation - will lead to a successful partnership and provide a springboard for significant sales of the E1 and S1 through Vicinity's broad dealer network.”
The Optimal E1 is a best-in-class fully-electric low floor chassis built on the E450 frame, aimed at an extensive range of market segments, including commercial trucks and buses, ambulances, recreational vehicles and fleet trucks.
The Optimal S1 low floor cutaway shuttle bus, also built on the E450 chassis, takes full advantage of Optimal-EV's OEM-quality design and engineering to introduce a product that is both C/FMVSS and ADA compliant.
“We look forward to working with the team at Optimal-EV to expand our portfolio of EV vehicles and extend our reach to another segment of the rapidly growing all-electric market,” Trainer concluded.
Contact the author at stephen.gunnion@proactiveinvestors.com