Blue Bird Selected to Receive $80 Million Federal Grant to Expand Electric Vehicle Manufacturing

Rhea-AI Summary

Blue Bird (NASDAQ: BLBD), a leading manufacturer of electric and low-emission school buses, has been awarded an $80 million grant by the U.S. Department of Energy (DOE). This funding, part of the Domestic Automotive Manufacturing Conversion Grants program, will assist Blue Bird in converting a former diesel-powered motorhome site in Fort Valley, Georgia into a 600,000 square foot electric vehicle manufacturing facility. This project represents half of the total $160 million needed for the conversion and will create over 400 new manufacturing jobs. The grant is part of a larger $2 billion DOE initiative aimed at transforming traditional automotive facilities to support electric vehicle production and strengthen domestic supply chains. Blue Bird, along with 10 other selectees, including Cummins, its supply chain partner for electric vehicle powertrains, will benefit from this grant aimed at meeting the increasing demand for clean student transportation nationwide. The final contract and funding negotiations with the DOE are expected to conclude within 120 days.

Positive

• Blue Bird receives $80 million DOE grant for electric vehicle manufacturing expansion.
• Conversion of a 600,000 sq ft facility will create over 400 new jobs.
• Part of a larger $2 billion initiative to bolster U.S. electric vehicle production.
• Blue Bird leads in electric school buses with nearly 2,000 zero-emission vehicles.
• Grant represents 50% of the total $160 million investment required.

Negative

• Final contract and funding negotiations with DOE could take up to 120 days.

Insights

Financial Analyst

Blue Bird Corporation's recent $80 million grant from the U.S. Department of Energy is a noteworthy development for several reasons. Firstly, the grant represents 50% of the total $160 million investment required for the conversion of a former manufacturing site into an electric vehicle (EV) manufacturing facility. This significant funding is likely to bolster the company’s balance sheet and reduce the financial risk of such a major project.

From a revenue perspective, the increased production capacity for Type-D electric school buses can potentially lead to higher sales volumes, especially considering the rising demand for clean student transportation. This could positively impact Blue Bird’s top-line growth in the coming years. Additionally, the conversion project promises to create over 400 new jobs, which may further stimulate economic activity in the local community, indirectly benefiting the company through enhanced goodwill and support.

However, investors should be cautious about a few challenges. The detailed contract and funding negotiations with the DOE, which could take up to 120 days to conclude, present a risk of delays or changes in the terms initially anticipated. Any deviation could affect the project's financial dynamics. Overall, the grant significantly de-risks the capital expenditure for Blue Bird while positioning it well in the burgeoning EV market.

Market Research Analyst

Blue Bird’s expansion into electric vehicle manufacturing aligns with broader industry trends toward sustainability and reduced emissions. With nearly 2,000 zero-emission vehicles already on the road, the company is well-positioned as a leader in this niche market. The federal support through the DOE grant underscores the government’s commitment to boosting domestic EV production and could enhance Blue Bird's market reputation and consumer trust.

The creation of a state-of-the-art EV manufacturing facility of approximately 600,000 square feet is a substantial move. This increased capacity will likely enable Blue Bird to scale up production to meet the growing demand for electric school buses, which is a critical factor for long-term sustainability and market penetration. Moreover, the strategic alliance with Cummins, a key supply chain partner for EV powertrains, points to a robust and reliable supply chain, essential for meeting production targets and maintaining quality.

In the short term, there might be some volatility as the market digests the implications of the grant and the potential risks associated with the final negotiations. However, in the long term, Blue Bird’s proactive approach in the EV space and the added production capabilities should provide a competitive edge in the school bus segment.

U.S. Department of Energy Conversion Grant Advances Manufacturing of Clean Student Transportation and High-tech Workforce Development

MACON, Ga.--(BUSINESS WIRE)-- Blue Bird Corporation (Nasdaq: BLBD), the leader in electric and low-emission school buses, announced today that it has been selected to receive an $80 million grant from the U.S. Department of Energy (DOE) to expand the company’s electric vehicle manufacturing capabilities and related workforce development efforts. The award selection is subject to final contract and funding negotiations between the DOE and Blue Bird, which could take up to 120 days to conclude.

The DOE funding is part of the U.S. administration’s nearly $2 billion investment to convert long-standing automotive facilities to manufacturing electric vehicles and components, retain and expand good-paying manufacturing jobs, and bolster domestic supply chains. The $80 million grant to Blue Bird is part of the Domestic Automotive Manufacturing Conversion Grants program administered by the DOE’s Office of Manufacturing and Energy Supply Chains (MESC). The grant represents 50 percent of the total $160 million investment required to complete the conversion project. Blue Bird is one of 11 selectees, including Cummins, Blue Bird’s supply chain partner for electric vehicle powertrains.

The financial award will help Blue Bird convert a prior manufacturing site for diesel-powered motorhomes in Fort Valley, Ga., into an approximately 600,000 square foot, state-of-the-art electric vehicle manufacturing facility. Blue Bird started manufacturing high-end, Wanderlodge-branded motorhomes at the site in 1963 based on its large, Type-D school bus designs. The company ceased operations at the Wanderlodge site in 2019. The conversion will assist Blue Bird in increasing the production of Type-D electric school buses to meet the rising demand for clean student transportation nationwide. In addition, the converted facility will add more than 400 new, good-paying manufacturing jobs.

“There is nothing harder to a manufacturing community than to lose jobs to foreign competition and a changing industry,” said U.S. Secretary of Energy Jennifer M. Granholm. “Even as our competitors invest heavily in electric vehicles, these grants ensure that our automotive industry stays competitive—and does it in the communities and with the workforce that have supported the auto industry for generations.”

“We are delighted that the U.S. Department of Energy supports our plant conversion project above the many applications that were submitted,” said Phil Horlock, CEO of Blue Bird Corporation. “The grant will enable Blue Bird to reinvest in middle Georgia, building on a site that previously manufactured high-end motorhomes. It will also enable Blue Bird to expand its workforce and invest in a community that is integral to Blue Bird’s history and continued success. We are looking forward to fully participating in the next phase of the negotiation process with the DOE.”

Blue Bird is the only U.S.-owned and operated school bus manufacturer in the United States. The company is recognized as the leader in electric school buses with nearly 2,000 zero-emission vehicles on the road today. The shift to clean student transportation helps the company sustain approximately 2,000 good-paying jobs.

About Blue Bird Corporation
Blue Bird (NASDAQ: BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. School buses carry the most precious cargo in the world – 25 million children twice a day – making them the most trusted mode of student transportation. The company is the proven leader in low- and zero-emission school buses with more than 20,000 propane, natural gas, and electric powered buses in operation today. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird's complete product and service portfolio, visit www.blue-bird.com.

Forward Looking Statements
This press release includes forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business and the joint venture described in this press release. Specifically, forward-looking statements include statements in this press release regarding earnings growth and Blue Bird’s future positioning and may include other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions

These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. The factors described above, as well as risk factors described in reports filed with the SEC by us (available at www.sec.gov), could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240711040514/en/

Blue Bird Investor Contact

Mark Benfield

Investor Relations

M: +1.478.822.2315

E: Mark.Benfield@blue-bird.com

Blue Bird Media Contact

Julianne Barclay

TSN Communications

M: +1.267.934.5340

E: julianne@tsncommunications.com

Source: Blue Bird Corporation

FAQ

What is the value of the DOE grant awarded to Blue Bird?

Blue Bird has been awarded an $80 million grant by the U.S. Department of Energy.

How will Blue Bird use the $80 million DOE grant?

Blue Bird will use the $80 million grant to convert a former diesel-powered motorhome site in Fort Valley, Georgia into an electric vehicle manufacturing facility.

What is the total investment required for Blue Bird's conversion project?

The total investment required for the conversion project is $160 million.

How many jobs will the Blue Bird facility conversion create?

The conversion will create over 400 new manufacturing jobs.

When will the funding negotiations between Blue Bird and the DOE conclude?

The final contract and funding negotiations could take up to 120 days to conclude.

How many zero-emission vehicles does Blue Bird currently have on the road?

Blue Bird currently has nearly 2,000 zero-emission vehicles on the road.

Who are the other selectees of the DOE grant along with Blue Bird?

Blue Bird is one of 11 selectees, including Cummins, its supply chain partner for electric vehicle powertrains.