Will the transit vehicle market be the first to completely eliminate petroleum use? Proterra thinks so.
During a recent interview for the latest issue of Charged, CEO Ryan Popple told us that the company is currently in contention for roughly 20% of the potential transit vehicle orders in the US over the next couple years, or about $1 billion of total pipeline opportunities.
“Of course, we won’t book orders anywhere near that, because there is a large range of probability when it comes to converting discussions into sales,” explained Popple, who previously served as Senior Director of Finance at Tesla and was a partner at VC firm Kleiner Perkins Caufield and Byers. “We’ve seen our pipeline – or actionable opportunities that we’re going after – grow about five to seven times in the last year alone, so we’re seeing demand swiftly increase, and we’re only focused on the North American market right now. Twelve to fifteen months ago, if you added up the value of the opportunities that we were talking to customers about, it would probably be somewhere around $100 million – that’s the value if we had booked every possible order that we were discussing with potential customers.”
The conversion rate for turning an opportunity into a sale varies greatly depending on the customer. For example, if Proterra is having initial conversations with a potential customer and still educating them about batteries, electric motors and inverters, they put that conversation way down in the single-digit percentage for the likelihood of closing the sale. If it’s a conversation about a follow-on order from an existing customer, that’s a pretty high value.
To date, the electric bus builder has booked 110 firm orders, including 320 options that customers can exercise if they choose to. Proterra’s buses are now in over a dozen cities and have logged more than one million miles of regular service.
Popple explains that it will only takes about 10 to 20 cities to commit their entire transit fleets to electric for a company like Proterra to book over $100 million of annual revenue, and be profitable. And once they’re in that ballpark, it’s time to start looking at becoming a public company.
“Again, we won’t win all of [the business in our pipeline], but if you talk to transit managers right now, there’s a decent percentage that think EVs are the long-term future of the market.”