This EV SPAC Just Scored a Win for Electric Buses in Washington

While electric vehicle (EV) special purpose acquisition company (SPAC) stocks have been incredibly volatile over the past couple of months, the secular shift toward electrifying transportation continues to drive forward. One particularly promising EV category is electric buses as cities and municipalities continue to electrify public transit systems.

Proterra, which is in the process of merging with SPAC ArcLight Clean Transition Corp (NASDAQ: ACTC), is the leading manufacturer of electric buses in North America and just scored a win in Washington state.

The Road to Future Sales

Proterra announced that the Washington State Department of Enterprise Services has selected the company as a provider of zero-emission electric transit buses and charging infrastructure. The state has set up cooperating purchasing programs that allow local transit agencies, commercial fleet operators, and other entities to purchase products from selected vendors under various contracts.

That means that while Proterra has not secured any firm orders based on the news, being selected as a vendor paves the path for future orders from agencies that work with the department under an established contract.

“Proterra is proud to support more than 130 customers across North America including transit agencies, airports, universities, and commercial operators that are delivering an essential service to riders,” Proterra exec John Walsh said in a statement. “We look forward to helping even more customers throughout the country accelerate the switch to 100% clean transportation for all.”

Last year, Proterra launched its fifth-generation electric bus, dubbed the Proterra ZX5. The vehicle comes in both 35-foot and 40-foot configurations and can be equipped with a battery pack with storage capacities of 225 kWh, 450 kWh, or 675 kWh that can deliver up to 329 miles of range.

The contract covers transit buses and cutaway buses but not school buses (Proterra separately won a contract to provide electric school buses in Maryland earlier this year). Other vendors available through the contract that offer electric buses include China’s BYD Company Limited (OTC: BYDDY), Gillig, Motor Coach Industries, New Flyer, and Nova Bus.

The Evergreen State Goes Green

Washington has been aggressively adopting policies that support renewable energy and EVs in recent years. The Department of Enterprise Services has been working to promote EV adoption across the state, including electrifying the state government’s fleet of vehicles as part of the Washington State Electric Fleets Initiative that began in 2015. Making it easier for other organizations to purchase EVs through contracts negotiated by the state has been an important aspect of the effort.

More recently, the state legislature proposed a bill that would seek to phase out sales of all new gas-powered passenger and light-duty vehicles by the 2030 model year, requiring those vehicles to be electric instead. The bill, known as Clean Cars 2030, continues to make its way through the state government and has not yet been passed into law.

Proponents of the bill hope that passing it would encourage other states to follow suit in accelerating the shift to EVs in the broader fight against climate change. Cars are the largest source of carbon pollution in the state, while Washington also has some of the highest gas prices combined with some of the lowest electricity rates in the country—which makes the switch to EVs economically compelling.

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Evan Niu, CFA owns shares of ArcLight Clean Transition Corp. The Motley Fool has no position in any of the stocks mentioned. Millennial Money is part of The Motley Fool network. Millennial Money has a disclosure policy.

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