S&P 500   3,841.94
DOW   31,496.30
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S&P 500   3,841.94
DOW   31,496.30
QQQ   308.68
S&P 500   3,841.94
DOW   31,496.30
QQQ   308.68
S&P 500   3,841.94
DOW   31,496.30
QQQ   308.68
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XL Fleet (NYSE:XL) Stock: The Next Big EV Company?

Friday, January 15, 2021 | Sean Sechler
XL Fleet (NYSE:XL) Stock: The Next Big EV Company?

It’s no secret that electric vehicle companies have been performing extremely well in the market lately. We’ve reached a point where anything EV-related is catching a bid, which can make it difficult for long-term investors that are interested in finding companies in the sector that have true staying power. With so many different competing companies in the space, seeking out the businesses that offer something unique could be the best approach.

One such company in the electric vehicle sector could end up being the next big thing. XL Fleet (NYSE:XL) is intriguing as it’s a business that has figured out a way to electrify commercial vehicles. When you think ahead about how things will be in 5 to 10 years, the concept of commercial vehicles going electric seems like a very logical progression. That’s a big reason why XL Fleet is a stock that investors should have their eyes on going forward. Below, we are going to dive deeper into what makes XL Fleet stock stand out in the increasingly crowded EV sector.

Commercial Fleet Electrification

We know that electric vehicles are the future, but the industry still has a long way to go as the vast majority of vehicles on the road today are powered by fossil fuels. However, a company like XL Fleet has tons of potential thanks to the fact that it has developed hybrid electric solutions that can help to provide substantial cost savings and reduce greenhouse gas emissions for commercial vehicles. XL Fleet’s mission is simple – to accelerate fleet electrification through cost-effective, customer-tailored, and comprehensive solutions.

The company has a diverse product portfolio that currently consists of three different electrification solutions that can be applied to commercial vehicles. The XLH hybrid electric drive system can improve commercial vehicles’ miles per gallon by up to 25% and reduce their CO2 emissions by 33%. The XLP plug-in hybrid electric drive system is even more efficient, as it can improve miles per gallon by 50% and reduce CO2 emissions by 33%. XL Fleet is also developing a zero-emissions offering called XL Electric. After the company launches XL Electric, it will be the only provider of a full suite of electrification technologies for commercial vehicles including hybrid, plug-in hybrid, and battery electric solutions.

Strong Top-Line Growth and Customer Base

While investors might be impressed with XL Fleet’s innovative products, the company’s top-line growth is almost equally impressive. The company has grown its revenue by 36.6% year-over-year for the nine months ended September 30, 2020, which is impressive given the circumstances surrounding the pandemic. In Q3, the company saw a record revenue figure of $6.3 million, which represents a 142.3% year-over-year increase. XL Fleet also has a $220+ million sales pipeline for the next 12 months and recently received $350 million in cash proceeds from its SPAC merger with Pivotal Investment Corporation II.

Another great reason why XL Fleet might be the next big thing in EV is the fact that the company has already attracted several prominent customers. It has already done business with Coca-Cola, PepsiCo, ThyssenKrupp, and FedEx, which tells us that large corporations are willing to explore the benefits of the technology that this company has created.

Final Thoughts

XL Fleet is an interesting investment opportunity thanks to its unique products that can help to electrify commercial vehicles. Instead of major auto manufacturers investing tons of capital into electric vehicle manufacturing, they can turn to a company like XL Fleet to produce eco-friendly vehicles at a fraction of the cost. It’s a highly scalable business that is helping major commercial enterprises to reduce their fuel costs and improve their carbon emissions thanks to its plug-in hybrid electric drive systems.

While we might arrive at a point in the future where everyone drives a fully electric vehicle, it remains to be seen just how long that will take. In the meantime, a company like XL Fleet stands to benefit greatly from the demand for electric vehicles and the worldwide emphasis on decreasing carbon emissions. Keep an eye on this stock in 2021 as it could end up being one of the long-term winners in the EV sector.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
XL Fleet (XL)1.5$11.17-6.9%7.88%N/ABuy$30.00
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