New GM Electric-Truck Business Targets Delivery Market -- 2nd Update
January 12 2021 - 2:37PM
Dow Jones News
By Ben Foldy and Mike Colias
General Motors Co. is launching a new electric-truck business
geared toward delivery services, the latest in the company's
efforts to commercialize battery technology it is developing
in-house.
Following the news, shares of GM hit their highest mark since
the stock's initial public offering in 2010.
The Detroit auto maker said Tuesday it would begin making
electric delivery trucks and motorized dollies as part of a
division, called BrightDrop, that aims to capitalize on the
now-booming market for e-commerce and home delivery.
The new division plans to roll out later this year an electric
truck designed specifically for commercial purposes; named the
EV600, it will offer a 250-mile range on a single charge. The move
pits GM against Ford Motor Co. and its recently introduced electric
delivery van, as well as electric-vehicle startups such as Rivian
Automotive, which is making plug-in vans for Amazon.com Inc.
FedEx Corp. is expected to be the first customer for the EV600,
with the package-delivery company agreeing to purchase 500 of the
new electric trucks for delivery later this year, GM said.
BrightDrop also plans to launch in the next few months a new
electric dolly -- a small four-wheeled dolly for ferrying packages
around warehouses and from trucks to front doors.
GM shares recently rose 6.4% to $47.89 in Tuesday afternoon
trading. The stock earlier hit a high of $48.95, its best price
since returning to public markets following its 2009
bankruptcy.
Mary Barra, GM's chief executive, has pinned her growth strategy
on electric cars, earmarking $27 billion to develop plug-in and
driverless vehicles by mid-decade. She also wants to add services
around electric-vehicle technology, such as BrightDrop and a
driverless-car business through its subsidiary, Cruise.
During a video appearance at the CES tech gathering on Tuesday,
Ms. Barra said the service aims to help commercial-delivery
companies work more efficiently and sustainably, as they contend
with surging e-commerce demand and government pressure to create
cleaner vehicle fleets.
The BrightDrop-branded trucks will be powered by GM's new Ultium
battery line. The company is building a $2.3 billion battery
factory in Ohio with Korea's LG Chem Ltd. to produce battery cells
that GM executives say will gradually bring down the cost of
electric vehicles.
GM executives say the market for package delivery should only
grow in coming years, citing a forecast by the World Economic Forum
that demand for delivery vehicles in large cities could increase
36% by 2030.
GM plans to ratchet up its electric-vehicle offerings this year,
starting with a Hummer pickup truck that runs solely on battery
power. The company has 30 new plug-in models planned by 2025 and
expects 40% of its U.S. lineup to be fully electric by that
year.
Other car companies are making a push into the
commercial-delivery market with electric offerings that executives
say will appeal to business customers.
Delivery trucks and vans typically travel along dedicated routes
and usually park in the same place overnight, which makes it easier
to figure out where to install charging stations. Electric vehicles
also require less maintenance compared with gasoline-powered
models, making them advantageous for fleet operators who want to
reduce costs, industry executives say.
Ford, under new Chief Executive Jim Farley, has also made
expanding its commercial business a priority and plans to make
electric-models like the new plug-in Transit, a model popular with
plumbers and other workers, a centerpiece for that effort. The
Dearborn, Mich.-based auto maker is expected to release an electric
F-150 pickup truck next year that executives say will target fleet
buyers.
Michigan-based startup Rivian has a contract to build 100,000
electric vans for Amazon by the end of the decade. Amazon is also
an investor in Rivian.
BrightDrop is the latest business line to be offered by GM,
which is trying to leverage its expertise in software and services
into new ventures. Recently, it introduced an insurance business
through its OnStar telematics system. GM said BrightDrop will also
provide the back-end software services for commercial customers
looking to better manage their vehicle fleets.
Write to Ben Foldy at Ben.Foldy@wsj.com and Mike Colias at
Mike.Colias@wsj.com
(END) Dow Jones Newswires
January 12, 2021 15:22 ET (20:22 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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