NFI's Strategic Expansion in EV Public Transit and Local Manufacturing in the U.S.

The North American public transit sector is undergoing a seismic shift, driven by electrification mandates, urbanization, and a push for sustainable infrastructure. At the forefront of this transformation is NFI Group Inc. (NFI), whose subsidiary Alexander Dennis has made a bold move by establishing the first and only U.S. manufacturing facility for double-decker buses in Las Vegas. This strategic expansion—coupled with a propulsion-agnostic product portfolio and a robust financial position—positions NFI as a compelling long-term investment in the EV public transit space.

A Strategic Bet on Localized Production

NFI's $15.3 million investment in the Las Vegas facility underscores its commitment to localized manufacturing and supply chain resilience. The plant, which began production in August 2025, is already delivering Enviro500 double-deckers to the Regional Transportation Commission of Southern Nevada (RTC) and Spokane Transit Authority (STA). These buses are tailored for North American markets, with 70% of components sourced from U.S. suppliers—a critical factor in securing federal funding under the Buy America program.

The facility's scalability is equally impressive. Starting with one bus per week, production is set to increase to 1.5 units weekly by 2026, enabling annual output of 75 vehicles. This aligns with NFI's 2025 financial guidance of $3.8–$4.2 billion in revenue and $320–$360 million in adjusted EBITDA. The Las Vegas plant not only meets surging demand for high-capacity transit solutions but also strengthens NFI's domestic supply chain, reducing exposure to global trade risks.

Competitive Advantages: Propulsion-Agnostic Strategy and Order Backlog

NFI's propulsion-agnostic approach—offering clean diesel, CNG, battery-electric, and hydrogen fuel cell buses—sets it apart in a market where regional policies and infrastructure readiness vary. This flexibility is evident in its recent contracts:
- RTC: 10 Enviro500 double-deckers (CNG) to address Las Vegas's space-constrained urban environment.
- OCTA: 50 hydrogen and battery-electric buses, including hydrogen fueling infrastructure, showcasing NFI's end-to-end solutions.
- FTA Funding: A $13 billion federal allocation for electrification under the Bipartisan Infrastructure Law has fueled demand for zero-emission buses (ZEBs), which now account for 35% of NFI's $13.5 billion order backlog.

This diversified product portfolio ensures NFI can capitalize on both transitional (CNG) and long-term (ZEB) markets. Moreover, its partnership with Big Rig Manufacturing in Las Vegas—a contract manufacturing model proven in the Asia-Pacific region—enables rapid scaling without overextending capital.

Financial Resilience and Long-Term Growth

NFI's financials reinforce its growth narrative. Q2 2025 adjusted EBITDA surged 19.2% year-over-year to $70.8 million, driven by improved pricing and North American operations. The company's liquidity has also strengthened, with $326.7 million in available cash following a $700 million revolving credit facility and $600 million in second lien notes. This financial flexibility supports R&D, production scaling, and strategic acquisitions.

Looking ahead, NFI's return on invested capital (ROIC) improved to 7.9% in Q2 2025, up from 3.5% in the same period the previous year. With ZEBs projected to account for 35–40% of manufacturing sales in 2025, the company is well-positioned to benefit from the $13 billion federal electrification mandate.

Investment Thesis: A Win-Win for Investors and Communities

NFI's Las Vegas facility exemplifies its long-term vision: localized production, supply chain resilience, and alignment with federal sustainability goals. The plant's economic impact—$5.5 million in local supplier spending and 115+ jobs—further cements NFI's role as a responsible corporate citizen, enhancing its reputation with regulators and transit agencies.

For investors, the case is clear. NFI's propulsion-agnostic strategy, robust order backlog, and financial discipline create a durable competitive advantage. As cities race to meet climate targets and replace aging fleets, NFI's ability to deliver scalable, clean transit solutions will drive revenue growth and margin expansion.

Investment Advice: NFI offers a compelling long-term opportunity for investors seeking exposure to the EV public transit sector. Its strategic expansion in the U.S., coupled with a strong balance sheet and alignment with federal policy, positions it to outperform peers. However, investors should monitor production ramp-up timelines and potential supply chain bottlenecks. For a diversified portfolio, NFI's shares represent a high-conviction buy, with upside potential as ZEB adoption accelerates.

In conclusion, NFI's localized production of Enviro500 double-deckers in Las Vegas is not just a strategic move—it's a catalyst for long-term growth. By combining innovation, financial strength, and a commitment to sustainability, NFI is poised to lead the next era of public transit.