Proterra Inc, the U.S. electric bus manufacturer whose investors include car makers Daimler AG and BMW AG, has hired investment banks to prepare for an initial public offering (IPO), according to people familiar with the matter.
Proterra has brought down the cost of electric batteries in its buses, making them more competitive with diesel-run vehicles. It has won orders from U.S. cities seeking to reduce the carbon footprint of public transport.
The Burlingame, California company employs several former executives from electric car maker Tesla Inc. It is working with underwriters including JPMorgan Chase & Co, Morgan Stanley and Deutsche Bank AG on preparing for an IPO that could come as early as this year, said the sources, who asked not to be identified because the matter is confidential.
They said the timing of the IPO depended on market conditions.
JPMorgan and Deutsche Bank declined to comment, while Proterra and Morgan Stanley did not respond to requests for comment.
Founded in 2004, Proterra has provided hundreds of public transport buses to U.S. cities and is expanding into school buses. In June, Proterra announced contracts with the Virginia Department of General Services and Charlotte Douglas International Airport in North Carolina.
In addition to driving down the cost of its vehicles, the company provides leasing options which aim to reduce the initial outlay of ordering its buses. It says its vehicles are cheaper to operate than diesel-run rivals.
Proterra also offers an option where it retains ownership of charging facilities, reducing upfront costs of switching to electric vehicles, according to its website.
Proterra sees a vast opportunity since the U.S. is significantly behind other cities in the world in adopting electric buses, especially in China.
Proterra’s competitors include Chinese automaker BYD, which is backed by Warren Buffett’s Berkshire Hathaway Inc, and Canadian bus manufacturer New Flyer.
Proterra has so far raised $525 million in private fundraising rounds, and last year was valued at $855 million, according to data provider Pitch Book. Among its early backers are General Motors Ventures LLC and Kleiner Perkins.
Proterra CEO Ryan Popple, a former Kleiner Perkins partner, was one of Tesla’s first employees under founder Elon Musk. In media interviews, Popple has declined to disclose when Proterra’s IPO may come.