GM creating new EV business to speed delivery, logistics — BrightDrop
Detroit — General Motors Co. is creating a new electric business called BrightDrop that will focus on aiding delivery and logistics companies with electric software, services and a new vehicle — and investors seem to love the ideas.
The automaker's electric people-moving drone concept — and other projects touted by CEO Mary Barra at the virtual CES electronics show — sent GM's stock to an all time high, closing up 6% at $47.81 on Tuesday.
GM formed BrightDrop to aid delivery and logistics companies with electric software, services and a delivery van. BrightDrop’s first product to market will be the EP1, an electric pallet that GM says can move product over short distances.
Its second product is the EV600, an electric commercial vehicle built for delivery over long ranges. The EP1 will be available in early 2021 and the EV600 will be on roads in late 2021 — with FedEx Express already ordering 500 of them. It will be available to more customers in 2022.
BrightDrop is yet another flex by the Detroit automaker to prove it means business about EVs. In the pandemic year of 2020, GM didn't back down on its expensive EV plans; it accelerated them, saying that it plans to spend $27 billion on EV and AV technologies through 2025. The new business puts GM's new Ultium battery platform in the commercial market and opens up GM to software and service opportunities.
"It's more than just saying: 'I am so happy about electrics I'm going to make a van, too.' It's taking a look at what is in that business model that can be adjusted and approved," said Stephanie Brinley, a principal automotive analyst at IHS Markit. "It looks at Ultium and says: 'What can we really do with this?' And sort of expands and builds and it all still ties together things that they're already investing in."
"BrightDrop represents an all new approach with a dedicated platform, leveraging Ultium to provide precisely what our customers are asking for," Barra said during her keynote. "It aims to provide this sector with the products, software and services, as well as support that they need to move goods from warehouse shelf to front door as efficiently and safely as possible."
BrightDrop was created under GM’s Global Innovation organization and joins other GM startups like OnStar Insurance, OnStar Guardian and GM Defense.
"The reality is we have in many cases ... a new set of customers, a new set of products, a new mission, and we really think that this warrants a focused business, a focused brand," said Pam Fletcher, GM's vice president of global innovations, explaining why the automaker chose to create a separate company.
To lead BrightDrop, GM hired Travis Katz as its new CEO. Katz was previously entrepreneur-in-residence at venture capital firm Redpoint Ventures.
BrightDrop already has had an EP1 pilot program with FedEx Express that found deliverers were able to handle 25% more packages per day. BrightDrop and FedEx Express have another pilot scheduled this quarter in one of the biggest urban centers of the U.S.
FedEx Express will be the first customer for the EV600, which will be powered by GM's new Ultium battery system and gets an estimated range of up to 250 miles on a full charge.
GM didn't specify the cost for either product. Customers will be able to connect with BrightDrop through an independent sales and service network. More information about the BrightDrop dealer network will be released later.
GM also wouldn't say where the EV600 will be built. GM has three electric vehicle plants: the Factory Zero Detroit-Hamtramck Assembly Center, Lake Orion and its plant in Spring Hill, Tennessee.
Deliveries have surged in the last year during the COVID-19 pandemic. And GM estimates by 2025 the combined market opportunity for parcel, food delivery and reverse logistics in the U.S. will be over $850 billion.
BrightDrop's EV600 will be competing with other electric delivery vehicles, such as Ford Motor Co.'s new electric Transit delivery van.
"We did a tremendous amount of empathy work around everything that has been mentioned here today," Fletcher said. "Whether it's ... riding with with delivery drivers to see exactly the pain points that they experience, testing and utilizing EP1s, going and watching operations and engaging in operations of other companies. Everything we have is very informed by real life needs ... of our customers."
The BrightDrop products revealed Tuesday are just a starting point. Fletcher said BrightDrop has concepts for a medium-distance product that can transport multiple EP1s and a rapid low delivery vehicle concept. BrightDrop will first serve customers in the U.S. and Canada.
GM also showed off its Cadillac Celestiq electric show car at CES. It first teased the vehicle at the EV Day it hosted last March. One of the car's features is smart glass that allows each occupant to set their own level of roof transparency. Cadillac hasn't said when the Celestiq will debut but it will be one of GM's 30 EVs planned to launch globally by 2025.
The Detroit automaker showcased some of the features it has on the GMC Hummer EV arriving late this year. The Hummer will offer one pedal driving when the vehicle is in terrain mode for handling at low speeds when off roading and rock crawling. It will also offer enhanced sound technology with a Bose sound system.
It revealed two electric concepts, a cozy shuttle for comfortable group transport and an electric drone for carrying people and
"We are preparing for a world where advances in electric and autonomous technology make personal air travel possible," GM Design Vice President Mike Simcoe said during the CES keynote. "It is a concept designed for the moment when time is of essence and convenience is everything."
GM is only automaker in the Detroit Three to place a heavy emphasis on CES this year. Fiat Chrysler Automobiles NV is participating with demonstrations of the company’s newest technologies using interactive product tours at fcaces2021.com. Ford Motor Co. isn't participating this year.
"No plan for the future is ever going to be perfectly successful but GM has made it clear that it's thinking beyond just making cars," said Jessica Caldwell, executive director of insights at Edmunds.com Inc., a vehicle information website, in a statement. "And although it's an ambitious goal to launch its own commercial delivery platform, it's fortuitous timing for GM to do so considering the e-commerce boom that the industry has seen over the last 10 months."