Blue Bird's Q2 2025 Earnings: Navigating Contradictions in EV Pricing, Market Strategy, and Funding Uncertainty

EV pricing strategy and tariff impact, EV market position and long-term strategy, EV price reduction and tariffs, EPA clean school bus funding and program uncertainty, and EV unit deliveries and market expectations are the key contradictions discussed in Blue Bird Corporation's latest 2025Q2 earnings call.



Record Financial Performance:
- Blue Bird Corporation achieved record quarterly revenue of $359 million and record adjusted EBITDA of $49 million (14%) for Q2 of fiscal 2025.
- The growth was supported by strong demand for school buses, increased alternative power vehicle sales, and effective pricing actions on all combustion engine models.

Alternative Power Vehicle Sales:
- Blue Bird's EV sales in Q2 were 265 units, an increase of 11.5% compared to Q1 and 26% higher than the previous year.
- This rise is attributed to the company's lead position in the alternative power segment and continued investment in product development and innovation.

Tariff Impact and Strategic Adaptation:
- Blue Bird is facing challenges due to new tariffs impacting costs, particularly on EV components with a 145% tariff on imports from China.
- The company has implemented a 2% tariff increase on unit sales and plans to prioritize ICE buses in Q4 to mitigate tariff-related cost increases.

Strong Bookings and Backlog:
- Blue Bird's firm order backlog stands at 4,900 buses, representing over six months of production, with a total revenue potential of $770 million.
- This strong backlog is indicative of stable demand and operational stability, supporting continued profitability and margin growth.