Spinning Out a New Business Model from a Leading Public EV Company
The Challenge
How to streamline operations to create near-term revenue while eliminating distractions and preserving the upside of early progress on new divisions.
After going public and raising a war chest of nearly $500 million, a publicly traded EV company specializing in medium and heavy-duty vehicles was well positioned for growth. To speed revenue creation, the company invested $2 million in a new division and pipeline development, specifically targeting a new full-service lease offering complemented by a new charging product offering.
However, as the pandemic constrained global supply chains, sales growth in existing, foundational product lines became limited by a lack of OEM vehicles with which its systems could integrate. Under pressure from analysts to meet prior guidance, the company engaged ADL to help evaluate and implement a strategic shift in the face of share price volatility.
ADL’s Approach
Ensuring no missed opportunities & making existing sales processes more efficient
ADL focused initially on evaluating the nuts-and-bolts operational processes that backstopped the company sales cycle, with a particular focus on incentives. We identified and evaluated >200 non-dilutive funding opportunities and recurring programs at the municipal, county, state and federal levels, vetting each program and organizing a dashboard of the most relevant, strategic options with the potential to influence sales directly and quickly. We complemented this initial landscaping by working with all key internal teams to develop a process to sustain the effort moving forward and made recommendations for key hires to form a new team to oversee the function internally.
Incentive risk is was one of six key risk factors that was under optimized by the client and inhibiting customer electrification velocity
We also reimagined customer-facing sales tools to influence purchasing. In particular, ADL created the vision and design for an incentive-driven fleet electrification commerce platform to translate the incentive landscape into geofenced pricing for each sales territory, along with rich product data. Customers would be able to use this tool to plan conversions and understand the impact and timing of incentives on their buying decisions. We complemented this platform with an impact calculator to make it easy for fleets to meet ESG goals and make decisions based on sustainability.
Leveraging the baseline for a win-win
After helping optimize the here and now, we looked to the future. As entrepreneurs and corporate operators ourselves, we understood the tensions our client was facing. Our client had the balance sheet to pursue what could be a game-changing new business division, but this path was no longer strategic with the bedrock revenue streams of the company suffering.
To allow the company to focus on near-term execution, ADL integrated with the new business division as part of the core team. We refined the new business model to focus on deployments at underutilized infrastructure as part of full-service fleet leases. We then helped secure a foundational business pipeline, including a novel segment focused on professional sports arenas.
However, even the promise of the new segment could not change the fact that development sales cycles are long. To ensure our client could preserve the upside of this new division without it becoming a distraction to analysts, ADL spun out the assets of the division from the parent company into a new entity. The goal: ensuring maximum upside unencumbered by the red tape that surrounds a public company under the microscope. We rebranded the entity as The EV Button, a nod to the division’s focus on making fleet electrification as easy as pushing a button.
Results
Leveraging ADL’s utility expertise and startup operations experience, we secured a first customer in UBS Arena, a $1 billion stadium that opened in the fall of 2021 as the new home of the NHL’s New York Islanders. We then expanded upon the initial resourcing of The EV Button by securing contingent capital commitments for over $100 million from investors. We also secured a position as 1 of 2 finalists for a $10 million grant from NYSERDA for a first-of-its-kind electric transportation hub at UBS Arena for the benefit of disadvantaged communities as part of the Arena Transit Project. This included negotiating and securing a site use agreement with UBS Arena, as well as partnerships with leading mobility providers Uber, Spin, Enel X, local government, municipalities and school districts.
Due to ADL’s strategic work, our client and The EV Button now have a foundation from which to replicate a novel model for fleet electrification throughout the United States that can both create lasting social impact through sustainability, as well as contribute meaningfully to our client’s bottom line as a publicly traded company.