RE:New Press Release - Sound Transit orders 33 Enviro500EV battery-electric double deck buses from NFI subsidiary Alexander DennisI don't think the market realizes what this could mean for NFI.
National Bank put out a research note last week (price target $18) outlining the possible outcomes of the task force set up by the US gov't to assist makers of EV buses.
This due to the fact that there are only two left - NFI and a private - and the govt wants to convert their mass transit systems from diesel to battery - but need manufacturers.
The task force proposes:
Adjustments to contracts signed between 2020-2023 to account for inflation.
Progress payments along the manufacturing cycle to assist the manufacturers who have had to fund until delivery (the rail system does this but not bus manus)
Future indexing on contracts to account for inflation.
The first one alone could be massive for NFI.
The only negative in the report was the possiblility of competitors arising (because of the assistance) - but that would take years for others to be up and running.
M87