GM eyes move forward with EV delivery van
Detroit — Detroit's automakers are pushing ahead to stake their claims on the development of all-electric delivery vans, a segment whose growth potential is likely to rise as consumers spend less time in vehicles and more time ordering online.
General Motors Co. is developing an electric delivery van aimed at commercial customers, sources told Reuters this week. The project, one of 20 new electric vehicles GM plans to introduce by 2023, reportedly is code-named BV1. The Detroit News reported last fall that forecasters expected the automaker to build electric vans at its Detroit-Hamtramck plant.
GM has not confirmed the plan, but told The News in a statement: "General Motors is committed to an all-electric future and is implementing a multi-segment, scalable EV strategy to get there. At this time, we do not have any announcements to make regarding electric commercial vehicles."
The news did not surprise industry analysts, according to Sam Abuelsamid, principal analyst at Guidehouse Insights: "It makes total sense. The only thing that surprises me is that they haven't publicly announced it yet."
In March, GM detailed plans to spend $20 billion on electric- and autonomous-vehicle programs through 2025. The Detroit-Hamtramck plant is in the process of being converted into GM's first fully electric vehicle assembly plant, after the last Chevrolet Impalas that were built there rolled of the lines earlier this year. The facility had been targeted for closure, until contract negotiations between GM and the United Auto Workers last fall secured its future as an assembly plant for electric vehicles.
Abuelsamid noted that the conversion project continued even during the eight-week-long auto production shutdown, which means production there may not be delayed much if at all: "A lot of the development, design, testing and simulation work is ongoing, even though people are working remotely. I wouldn't expect (the electric van) to be delayed more than a few months."
GM's electric commercial van would compete directly with Ford Motor Co.'s Transit electric van, which the Dearborn automaker said in March would be released in 2022. Some industry observers see these ventures as a strategy aimed at competing with electric-vehicle manufacturer Tesla Inc., although the Silicon Valley automaker so far has focused on passenger vehicles.
That GM is working on a commercial delivery vehicle makes sense, according to Abuelsamid: "For the foreseeable future, there are going to be more people working remotely, more people relying on e-commerce, and the commercial vehicle sector is actually growing."
As the auto industry begins to dig itself out of deep debt it assumed to survive an unprecedented industry-wide shutdown due to the coronavirus pandemic, and as it confronts forecasts that sales volumes will take years to recover, commercial vehicles may be a way to offset losses on the passenger vehicle side.
"The economy is going to be in bad shape for awhile yet," Abuelsamid said. "But people still need to get packages delivered."
And, he added, there is growing recognition among business customers that electric vehicles may be more cost-efficient in the long run, even though they might cause some sticker shock. Delivery vans tend to incur more mileage and maintenance issues than passenger vehicles.
Additionally, GM's current roster of commercial vans is outdated and has lost market share to competitors such as Ford and Fiat Chrysler's Ram, Abuelsamid said: "They need a significant update, and now would be the perfect time for them to do that."
Staff Writer Kalea Hall contributed.