General Motors Co. (NYSE: GM) flung itself into the battery-electric commercial delivery and freight-tech businesses Tuesday, revealing an electric-powered cargo van and a connected pallet system for getting goods from the vehicle to customers’ doorsteps.
The automaker had hinted it was working on a battery-powered electric van. CEO Mary Barra announced the creation of a startup, BrightDrop, during a digital keynote address for CES 2021. BrightDrop joins GM Defense and two recent OnStar spinoffs to come out of GM’s Global Innovation organization.
“BrightDrop offers a smarter way to deliver goods and services,” Barra said in a press release. “We are building on our significant expertise in electrification, mobility applications, telematics and fleet management, with a new one-stop-shop solution for commercial customers to move goods in a better, more sustainable way.”
The EV600 gross vehicle weight rating is less than 10,000 pounds. It has more than 600 cubic feet of cargo area with motion sensors to help keep cargo secure. Powered by GM’s Ultimum battery system, the estimated driving range on a full charge is 250 miles. With 120-kilowatt (kW) fast-charging, the EV600 can add 170 miles of range in an hour.
EV600 connectivity provides fleet operators remote access, real-time location, battery and charging management, driver safety coaching and incident recording, remote diagnostics, safety alerts and predictive maintenance insights, and over-the-air updates.
GM currently makes gasoline-powered V8 cargo vans in Wentzville, Missouri. Navistar International Corp. (NYSE: NAV) builds some of the chassis for those trucks at a plant in Springfield, Ohio.
FedEx Express EP1 pilot
BrightDrop’s electric pallet called the EP1 is GM’s first step in creating a business-to-business electric ecosystem based on Ultium Technology. It will be followed by the battery-powered EV600 cargo van with zero tailpipe emissions.
The propulsion-assisted EP1 available early this year can move 23 cubic feet of cargo weighing up to 200 pounds over short distances, such as from the delivery vehicle to the customer’s doorstep. Built-in electric hub motors with speeds up to 3 mph mimic an operator’s walking pace. They are maneuverable in tight spaces and have adjustable shelving for organizing contents and lockable cabinet doors for secure, remote access to contents.
GM conducted a pilot test of the EP1 with FedEx Express (NYSE: FDX), which will receive the first 500 of GM’s electric vans later this year. Couriers handled 25% more packages a day and said the EP1 was easy to maneuver while reducing physical strain.
“We’re so pleased we have a second EP1 pilot planned to take place this quarter. And we’re expecting the results to be even more impactful,” said Richard Smith, FedEx Express regional president of the Americas.
Growing delivery demand
FedEx Express is currently delivering hundreds of millions of vaccine doses for COVID-19.
“We expect U.S. residential deliveries to reach 100 million packages a day by 2023, which is three years earlier than previously estimated,” Smith said. “Our need for reliable, sustainable transportation has never been more important. BrightDrop is a perfect example of the innovations we’re adopting to continue to transform our company.”
The World Economic Forum predicts demand for urban last-mile delivery, fueled by e-commerce, will grow by 78% by 2030. That would lead to a 36% increase in delivery vehicles in the world’s top 100 cities. The rising demand expects delivery-related carbon emissions to rise by nearly one-third.
For GM, the EV600 puts the company in direct competition with rival Ford Motor Co. (NYSE: F), which recently introduced an electric version of its Transit van. Startups like Amazon-backed Rivian and Workhorse Group (NASDAQ: WKHS) also are building electric delivery vans. Powertrain upfitters like XL Fleet and Motiv Power Systems are in the mix as well.
“I was fully expecting them to follow in the path of Rivian and Ford and do an electric cargo van,” said Sam Abuelsamid, principal analyst at Guidehouse. “I wasn’t expecting anything like the EP1. But this is an area that has a significant growth opportunity.”
GM is not revealing all the specifics of the EV600, such as what badge it will wear, where it will be built and serviced, or whether it will be sold direct to fleets, bypassing franchised dealerships.
“They are clearly going to leverage the experience they have on the OnStar side and expand that more significantly into the commercial vehicle sector,” Abuelsamid told FreightWaves. “It’s a significant new potential revenue opportunity for GM.”
GM shares closed Tuesday at $47.82, up 6.29%, a 52-week high.