The electric van war escalates

By Peter Valdes-Dapena, CNN Business

Major automakers are releasing electric cars and SUVs that could one day threaten Tesla’s dominance in this space. But there’s a big fight brewing in another EV market where Tesla isn’t even playing. Electric work vans.

Electric pickups present a big opportunity due to two competing trends. Demand for pickup trucks is growing as Americans have grown accustomed to having things delivered to their homes and as businesses, including online retailers and automakers, strive to reduce carbon emissions.

In terms of startup competition, established automakers aren’t going after Tesla but Rivian, the $50 billion electric truck and SUV maker with a huge embedded customer. Amazon, an early investor with a roughly 20% stake in Rivian, gave at the timetitan EV getting a big boost early on by placing an order for 100,000 Rivian electric vans.

Amazon also recently reached an agreement with Stellantis to buy its Ram electric vans when they are released in 2023. (The two companies have also made other arrangements in areas such as software and data storage, which Amazon will provide.) General Motors recently reached agreements with FedEx and Walmart to buy pickup trucks from GM’s new company. electric van subsidiary, BrightDrop. Ford announced on Tuesday that it has started shipping E-Transit electric pickup trucks from a plant in Missouri. He previously announced deals including with Walmart and various city governments for more than 10,000 of the new electric pickup trucks. Ford is also an investor in Rivian, but unlike Amazon, Ford does not have a seat on Rivian’s board. And Ford and Rivian have dropped plans to work on the vehicles together.

For his part, Rivian insists that more automakers are getting into the electric minivan game, it’s for the greater good. Well.

“The growth of electric vehicles in the fleet industry is a good thing. Large-scale electrification has always been part of our mission and is essential to decarbonizing and improving the planet,” said the doorman. – word of Rivian, Kenya Friend-Daniel, in an email.

No one goes into this business for the excitement. Vans, electric or not, are about as boring as motor vehicles, the automotive equivalent of dry white toast. You can do amazing things with them, but fresh from the factory, they’re square and tasteless. Even as work trucks go, they absolutely lack the cowboy swagger of pickup trucks.

The coronavirus has renewed attention on these stripped-down canisters. Online shopping, which has increased during the pandemic, has brought fleets of minivans to American streets. Online holiday shopping, for example, grew 43.5% between 2019 and 2021, according to Adobe Analytics.

Today, the vast majority of work vans run on gasoline, but battery-powered vans could be perfectly suited for this type of use, which would increase the incentive for companies to buy them. Work and delivery vans rarely make long interstate highway trips that would require recharging along the way. They typically ride relatively short trips and return at night to company parking lots or garages where they can recharge for the next day’s drive.

“When you look at real and already existing use cases for pickup trucks, you can see that electricity adds value in different ways,” said Kathryn Schifferle, CEO of Work Truck Solutions, a company that tracks trucks and vans. business purchases.

Market share for work vans, in general, has fallen over the past two years, according to JD Power, but that’s mainly due to inventory reduction, said Tyson Jominy, vice president of data analytics. at JD Power. Demand, however, has increased a lot, according to Work Truck Solutions. The number of dealer inquiries for pickup trucks has doubled in the past two years, according to the company.

At the same time, many companies that operate large fleets have made public environmental commitments that essentially require electric vans.

“A lot of these companies are committed to carbon neutrality,” said JD Power’s Jominy. “It’s a big step to get there.”

Automakers have also pledged to sell large numbers of electric vehicles, so those purchases help them as well, Jominy said. Automakers often have to invest in the development of electric vehicles and the redevelopment of factories to build them without having a clear idea of ​​the size of the market. Since electric vehicles share many common components, a contracted customer for one type of electric vehicle can help defray the costs of developing the electric vehicle as a whole.

“A lot of these contracts are done in advance for several hundred thousand vehicles,” Jominy said. “It will absorb manufacturing costs and fixed costs.”

The combination of high demand and low inventory presents an opportunity for fast-moving automakers, whether established companies or startups, to steal business from competitors, Schifferle said.

It might not be that easy, though, said JD Power’s Jominy. Electric pickups may be new, but these large commercial customers know Ford, GM and Stellantis and may have worked with them for years.

“Adding an electric vehicle to your fleet by your sales rep at the automaker with whom you have a great, long-standing relationship would be an easy addition and relatively low risk,” he said in an email. -mail.

Rivian will have a harder time building customer relationships and convincing commercial fleet buyers to pick up a new type of product from a brand new company.

“Either way, it will be an exciting race to watch,” said Jominy.

The-CNN-Wire
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CNN’s Parija Bhatnagar contributed to this story.

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