General Motors Co.’s BrightDrop will first build about 500 EV600s for FedEx Express. Photo courtesy of General Motors Co.
January 12, 2020: Hannah Lutz, Crain’s Detroit Business
General Motors Co. is launching a commercial electric vehicle business called BrightDrop and locked in FedEx Express as the first customer for a delivery van later this year.
The BrightDrop brand will offer electric products, software and services, GM said Tuesday. Its products will include a commercial van known as the EV600 and an electric pallet called the EP1, which allows delivery drivers to more easily transport goods from the vehicle to customers’ doors.
“BrightDrop offers a smarter way to deliver goods and services,” GM CEO Mary Barra said in a statement. “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.”
GM estimates the annual market opportunity for parcel, food delivery and reverse logistics in the U.S. will exceed $850 billion by 2025. Demand for urban delivery to fulfill e-commerce orders is expected to grow 78 percent by 2030, GM said, citing the World Economic Forum. The boost in demand is expected to increase the number of delivery vehicles by 36 percent in the 100 largest cities worldwide.
The sparse electric commercial van landscape is expected to become more crowded in the next few years as Mercedes-Benz, Ford Motor Co. and Rivian also launch offerings in the U.S. Guidehouse Insights forecasts that battery-powered light-commercial-vehicle sales in the U.S. will climb to about 623,000 in 2030, up from about 56,000 last year.
BrightDrop will build about 500 EV600s for FedEx Express to start, Pamela Fletcher, GM’s vice president of global innovation, told reporters. She said the brand also has letters of intent from a number of other customers she didn’t disclose.
Sam Fiorani, vice president with AutoForecast Solutions, has said GM would build an electric commercial van at its Detroit plant starting in late 2021, but the company didn’t say Tuesday where it will assemble the vehicle.
The van, powered by GM’s Ultium batteries, will be able to drive 250 miles on a full charge and have 600 cubic feet of cargo space. It will be available to customers other than FedEx in early 2022.
The EP1 electric pallet was designed to reduce package touch points, costs and physical strain on delivery drivers, GM said. The pallet can carry 23 cubic feet of cargo weighing up to 200 pounds. In a pilot with FedEx, couriers were able to handle 25 percent more packages per day by using the pallets.
BrightDrop and FedEx Express will begin another pilot in one of the biggest urban centers in the U.S. this quarter, GM said.
“Our need for reliable, sustainable transportation has never been more important,” Richard Smith, FedEx Express regional president of the Americas and executive vice president of global support, said in GM’s statement.
“BrightDrop is a perfect example of the innovations we are adopting to transform our company as time-definite express transportation continues to grow. With this new suite of products, we will help improve the safety, security and timeliness of FedEx Express deliveries, while reducing our environmental impact and protecting the well-being of our couriers.”
BrightDrop will be led by Travis Katz, who joins the company from venture capital firm Redpoint Ventures. It initially will operate in the U.S. and Canada, with sales and service going through a new BrightDrop dealer network. GM declined to provide details about the dealer network.
BrightDrop was created by GM’s Global Innovation organization, led by Fletcher. The group also launched OnStar Insurance, OnStar Guardian and GM Defense.