HomeBusinessElectric vans, delayed by production problems, find eager buyers

Electric vans, delayed by production problems, find eager buyers

Not long after purchasing a Ford E-Transit van for his plumbing business last November, Mitch Smedley sat down with some receipts and a calculator to calculate how much the electric vehicle was saving him in fuel costs.

A few minutes of crunching showed that he was spending between $110 and $140 a week on fuel for each of the four oldest diesel Transits in his fleet. Then he calculated how much electricity he was using to charge the electric model to drive the same distance, about 300 miles per week. The cost: about $9 per week.

“I knew there were going to be some savings because our electricity here is very cheap,” said Mr. Smedley, whose business is based in Blue Springs, Mo., just east of Kansas City. “But he surprised me when I figured it out. It makes it very, very cheap to operate.”

in the automotive industry transition to electric vehicles, passenger cars have led the way. In the first quarter of 2023, electric vehicle sales were up 45 percent higher than the same period a year ago to 259,000 cars and trucks, according to Cox Automotive, a research firm. Tesla is still the biggest seller by far, while General Motors, Ford Motor, Hyundai, Volkswagen and others are selling multiple electric models. Cox expects total annual EV sales in the US market to top 1 million this year for the first time.

Until now, light commercial vehicles account for a small proportion of all electric cars and trucks sold, but in many ways, battery-powered vehicles are well-suited for work fleets. Since delivery trucks and vans typically travel limited distances or set routes every day, they don’t need large, expensive battery packs. Most can get by with enough power to travel about 100 miles before needing a recharge. One factor that makes electric cars significantly more expensive than internal combustion models is that consumers want the ability to travel 250 or 300 miles on a single charge because they fear being stranded far from anywhere to connect.

Commercial vehicles are typically parked overnight in lots where they can be easily charged up and ready to go on a full battery in the morning. Electric trucks also require less maintenance than traditional vehicles. They require no oil changes and no transmissions, mufflers or fuel pumps to wear out or fail. And they don’t burn fuel at idle.

More than consumers, commercial fleet owners keep a close eye on the total cost of owning and operating vehicles over multiple years. That means they’re often willing to accept a higher initial price to buy an electric truck to save money over time through lower fuel and maintenance costs.

However, commercial electric vehicles have gotten off to a slower start in sales, in part due to problems at several companies hoping to make them. Start-ups like Lordstown Motors, Arrival and Canoo have struggled to start or ramp up production, as has Workhorse, a small commercial truck maker. Rivian, a start-up backed by Amazonit had hoped to sell thousands of electric vans to the online retailer, but has fallen short of its goals.

The delays created an opportunity for Ford and GM, two of the country’s largest automakers, to bring out their own battery-powered work trucks. A derivative of Ford’s Transit commercial van, the E-Transit is available in various sizes and can be used as a delivery van, shuttle bus or work truck for contractors, repairmen, plumbers and other small businesses.

Ford sold about 6,500 E-Transits last year. In March, the United States Postal Service ordered 9,250 E-Transits that are supposed to enter service by the end of 2024.

GM created a separate division, BrightDrop, to build a larger vehicle designed for package and cargo delivery. BrightDrop produced a test fleet of about 500 battery-powered vans that will be delivered to customers in 2022 and began commercial production of its Zevo 600 model at a plant in Ontario this year.

Along with the truck, BrightDrop has developed an electric cart that allows drivers to transport many packages from the truck, reducing the number of trips the driver takes back and forth. One version of the cart is refrigerated for produce and grocery deliveries.

In Hooksett, NH, Merchants Fleet, a company that manages the vehicles used by delivery services, has been testing 150 BrightDrop vans over the past year and is eager to add more.

Brad Jacobs, the company’s vice president of fleet consulting, said the cost of depreciation and interest cost on the capital used to buy electric trucks is about the same as for trucks with combustion engines.

“What we’ve learned from vehicles on the road is that you save between $10,000 and $12,000 a year because the cost of fuel and maintenance is much lower with electric vehicles,” he said. “If a company is planning for a five-year life, that’s a savings of $50,000 per vehicle. That’s very convincing.”

Mr Jacobs said Merchants Fleet has orders for a further 750 BrightDrop trucks and reservations for another 17,000.

Large delivery companies have been clamoring for electric trucks for years. Amazon hopes to buy up to 100,000 trucks from Rivian and is eyeing a Ram ProMaster electric pickup that Chrysler parent company Stellantis is supposed to start manufacturing this year.

UPS has ordered 10,000 electric vans from Arrival, a Luxembourg-based start-up with operations in Great Britain. The arrival has suffered financial problems and production delays. FedEx plans to buy only battery-powered trucks starting in 2030 and hopes to operate an all-electric fleet by 2040. It has been testing 150 BrightDrop trucks, is taking deliveries on 350 more and has reserves for an additional 2,000.

Nelson Granados, a FedEx delivery driver in Inglewood, California, has been using a BrightDrop vehicle for the past year, a white van with an orange and blue FedEx logo next to an image of a bright green plug and electrical cord.

Mr. Granados gives the truck a thumbs up. The truck features amenities that diesel trucks lack like a stereo and heated seats, as well as a lower floor that makes it easier to get in and out. “You’re in and out all day, so it’s worth it,” Granados said. “It’s like a luxury delivery truck.”

Mr. Smedley, the Kansas City area plumber, has noticed benefits to his E-Transit in addition to fuel economy. At job sites, the truck can power equipment like drain cleaning machines, eliminating the need to lug around a generator. He started taking the van to Kansas City Chiefs games (he’s a season ticket holder) so he could use their electrical outlets for tailgating parties. The truck also secures you premium parking in the Arrowhead Stadium spots reserved for electric vehicles.

This year, Mr. Smedley decided to add a second electric model to his fleet, a Ford F-150 pickup with lights. He has also continued to track the savings he is reaping with E-Transit.

“When I look at the cost over five years,” he said with a laugh, “it’s almost like getting a free truck.”

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