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- Ford and GM go head-to-head on electric vehicles for mainstream buyers.
- But perhaps their real battle will be with electric delivery vans.
- The two made news this week — and are racing to grab more market share.
As Ford and GM head into the multi-billion dollar pivot to electric propulsion, the balance of their rivalry may not rest on high-profile rides like the F-150 Lightning and Hummer EV, but on the humble delivery van .
As adoption in the consumer market creeps upward, the commercial space may be a more certain bet in the near term, industry experts say.
“The public’s attention tends to focus a little bit on the passenger car market,” said Ryan Gallentine, electrifying director of transportation policy at Advanced Energy Economy. “But the electrification of the commercial vehicle market,” he said, “I think is underappreciated.”
Ford and GM know that, and they’re racing to answer growing demand from retail, ecommerce, and delivery giants looking to electrify their massive fleets. That demand could generate a $370 billion commercial EV market opportunity by 2030, according to Guidehouse Insights.
This past week, both automakers made commercial EV announcements — Ford with its Ford Pro delivery unit, and GM with its first and last mile and subsidiary, BrightDrop. The moves are more of the companies’ ambitions to take the lead in an increasingly promising — and important — delivery space.
That’s what drove these companies to pick up the pace. “BrightDrop is the fastest vehicle we’ve built in GM history,” GM’s SVP of strategy and innovation Alan Wexler said at a Barclays conference this month.
The stakes are high
“It’s no surprise that this first mile, last mile is a growth sector for auto manufacturers,” Gallentine said. “Obviously, policy drivers are big here.”
The commercial space has successfully overcome many barriers to electrification, such as fleet management, infrastructure, and cost of ownership. Now, government support through incentives has fueled EV momentum, and as a result, companies looking for electric fleets will only demand more.
BrightDrop has already secured some of the largest customers in the space, with 25,000 collective orders from FedEx, Walmart, and Merchants Fleet. It is boosting its business with software and predicts $5 billion in revenue by 2025.
Ford Pro development has also been steady, and the company is strong. “In the commercial business, we have a front-row seat,” the division’s CEO Ted Cannis said at a JPMorgan conference in August.
Ford and GM cannot compete with each other for this market. Other target customers, such as UPS and Amazon, have deals with startups Arrival and Rivian, respectively, but their fleets would require multiple vehicle suppliers, and hundreds of other fleets the unearned.
“There are several startups playing in this space,” Gallentine said. “It’s, who’s going to be the fastest to market? Who’s going to be able to sign those business contracts the fastest?”
How electric delivery van makers plan to do it
Ford and GM’s natural advantages over rivals include name recognition, strong supply bases, and ample resources.
“We’ve seen over the decades how strong brand loyalty is in the commercial vehicle segment,” said AutoPacific analyst Robby DeGraff. “Operators with fleets of older Ford E-Series vans have upgraded in recent years to the Transit, and are likely to upgrade further to the electric E-Transit.”
“If an operator, say, a catering business, finds great success with its dozen gas-powered Chevrolet Express vans, I expect they’ll be more interested in replacing them with a crop of new products from BrightDrop.”
But, DeGraff said, this kind of change can strain a person’s loyalty. “Commercial buyers may begin to cross-shop more than before, moving away from their choices for a rival, especially if there is a clear advantage.”
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