TM Toyota Motor Corporation

By Chris Wack

VivoPower International Plc shares were up 10% to $8 after the company said it entered into an exclusive manufacturing collaboration with Toyota.

The company said Toyota Australia intends to integrate VivoPower's conversion kits to electrify its iconic Land Cruiser vehicles during the build process, turning chassis originally destined to be diesels into emission-friendly electric vehicles with VivoPower batteries and electric motors.

In an update note issued after the news broke, international equity research house Edison declared the five-year exclusive deal "a major milestone" and "a strong endorsement," supporting revenue and dialing down risk as VivoPower prepares to hyperscale.

"It is a real step change for VivoPower to move from re-kitting existing vehicles to being an integrated part of the manufacturing process," said Edison lead analyst David Larkham.

The deal follows two years of collaboration and field trials in the harsh environment of the Australian mining sector. While the letter of intent isn't the final contract, it is binding and the end agreement is expected to lock out VivoPower competitors from working with Toyota Australia to electrify Land Cruisers.

Toyota sells about 400,000 Land Cruisers a year worldwide, with more than 25,000 sold in Australia in 2020 and more than 10 million in total sales since its launch in 1951.

Write to Chris Wack at chris.wack@wsj.com

(END) Dow Jones Newswires

June 23, 2021 10:37 ET (14:37 GMT)

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