Several high-profile commercial electric vehicle startups are driving toward bankruptcy, but there is one that is seemingly rising above the rest.
On Thursday, BrightDrop, backed by General Motors (NYSE: GM), announced it is on track to generate $1 billion in revenue in 2023. In a short news release, the company said CEP and President Travis Katz shared with investors the revenue projection and noted that BrightDrop should be generating $10 billion in revenue by the end of the decade at a 20% profit margin.
“We’re a tech startup with a subscription-based product offering that’s backed by a global powerhouse — this puts us in a league of our own,” Katz said. “As we focus not only on electric vans, but also eCarts and software, we’re confident that our full ecosystem of connected products and services will drive significant revenue and growth for years to come. Between delivery and our recent expansion into the online grocery sector, we can capture substantial market share across multiple industries.”
BrightDrop said it has over 25,000 reservations and letters of intent for its vehicles. It started delivering EV600 vans to FedEx Express in December 2021. In January of this year, BrightDrop announced Walmart had placed an order for 7,000 vehicles and FedEx was expanding its initial order of 500 vehicles to as many as 20,000 units. Hertz, Verizon and Merchants Fleet have also announced intentions to adopt BrightDrop vehicles.
If BrightDrop achieves its $1 billion revenue goal next year, it would come in just its third year of existence. For comparison, it took Google five years to reach $1 billion, Facebook six years, Tesla nine years and Apple 14 years.
EV troubles persist
The success of BrightDrop runs counter to the current commercial EV market, where startup competitors are struggling for survival. With the possible exception of Amazon-backed Rivian (NASDAQ: RIVN), many are facing tough times, highlighted by the struggles of Arrival.
Earlier this month, the U.K.-based vehicle maker said it may not have enough cash to survive to the end of the year. In August, the company cut its production target for 2022 by 95%, from a planned delivery of as many as 600 vehicles to just 20. Founded in 2015, Arrival (NASDAQ: ARVL) was an early entrant and received an early order from UPS (NYSE: UPS) for 10,000 units.
Both Rivian and Canoo (NASDAQ: GOEV) cut about 6% of their workforces this summer, although both seem to be on more solid ground. Rivian has a 100,000 vehicle commitment from Amazon, and Canoo recently purchased a manufacturing facility in Oklahoma City and announced a battery plant in Pryor, Oklahoma.
Another EV startup, Electric Last Mile Solutions (ELMS), went bankrupt this summer. On Thursday, Mullen Automotive (NASDAQ: MULN) said it had secured $150 million in funding to acquire the assets of ELMS.
From the beginning, BrightDrop has adopted a different approach from most EV makers. Katz had previously told Modern Shipper that BrightDrop would develop a broader approach to electric vehicles.
“The vehicles are an important part, but [we] actually look holistically at the problem of last-mile logistics,” Katz said. “How do you create efficiencies through the broader flow [of goods movement].”
Innovation keeps coming
BrightDrop is building two different size vans, continues to work on an electric pallet system, in September announced Trace Grocery and on Thursday unveiled BrightDrop Core.
Trace Grocery is a temperature-controlled electric cart that allows grocers to pack the unit directly from store shelves and station it outside for customer pickup. Customers are given digital verification codes to access their items inside the Trace Grocery unit.
The system can move up to 350 pounds at a speed of 3 mph to match an operator’s walking speed. It has nine compartments.
BrightDrop Core combines hardware and software to reduce total cost of ownership of BrightDrop vehicles. It features a fleet-readiness dashboard, asset monitoring, historical reporting and customizable alerts.