General Motors is Developing an Electric Van for Business Customers to Stave Off Tesla

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【Summary】U.S. automaker General Motors is developing a fully-electric van aimed at business users, including shipping companies. The van will be built at the automaker’s Detroit-Hamtramck plant in Michigan. GM does “don’t want to leave the door open for Tesla” as they did in consumer passenger cars, sources say.

Eric Walz    Jul 11, 2020 9:45 AM PT
General Motors is Developing an Electric Van for Business Customers to Stave Off Tesla
GM CEO Mary Barra speaks a March 4 event detailing the company's $20 billion investment in electric vehicles. (Photo: GM)

With e-commerce giant Amazon investing in electric vehicle startup Rivian to develop an electric delivery van and Tesla dominating the electric passenger vehicle segment, U.S. automaker General Motors is actively developing new electric models to remain competitive. It sppears that some of the new EVs in development are being designed for commercial customers.

Reuters reports that the U.S. automaker General Motors is developing a fully-electric van aimed at business users, including shipping companies. The van will be built at the automaker's Detroit-Hamtramck plant in Michigan.

With the rapid growth of e-commerce, demand for more efficient and zero emission delivery vehicles is rising, especially from companies like Amazon and the United Parcel Service. Reuters reports that GM intends to enter the segment now to stave off competitors, such as Tesla, who has yet to enter the segment, but is developing a bigger electric semi truck.

GM did not officially confirm its electric van, but suppliers familiar with such plans at GM and Ford told Reuters the Detroit automakers, which count pickup trucks, SUVs and commercial vehicles as their biggest profit generators, "don't want to leave the door open for Tesla" as they did in consumer passenger cars.

In under a decade, Tesla market cap has risen to over $160 billion, more than General Motors and Ford combined, so the two automakers seemed to have learned their lesson in not committing to electric vehicles sooner. GM does not want to fall behind once again in the electric commercial vehicle segment.

GM plans include developing around 20 new all-electric vehicles by 2023, in a variety of body styles including sedans, trucks and crossovers.

Scott Phillippi, UPS senior director of fleet maintenance and engineering, said the package delivery firm believes electric vans have the potential to disrupt the commercial market.

"It's going to be similar to what the Model 3 has done for the consumer market," Phillippi said, referring to Tesla's small near-luxury electric sedan. "Now all of a sudden, we're off to the races."

The electric van is code named "BV1" and is due to enter production in late 2021, the sources told Reuters. It is believed the BV1 van will share some components with GM's future electric pickups and SUVs, including the automaker's new Ultium advanced battery system announced in March. 

GM and its battery partner LG Chem are investing $2.3 billion in a joint venture battery factory in Ohio to build the Ultium batteries for future electric models. 

GM's electric van might also be sold under a different nameplate, the same way GM resurrected the Hummer nameplate as an electric brand sold under GMC family. The first electric Hummer is due in late 2021 and will be sold by GMC dealers. One name that's being considered for the electric van is "Maven", the name GM used for its unsuccessful car-sharing business.

GM is not officially confirming its plans. 

In a statement to Reuters, GM said it 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."

However, GM rival Ford has already confirmed its electric commercial vehicle plans. In February, Ford said it would introduce an electric version of its Transit van for model year 2022. 

"The most critical bet we will be making over the next several years will be our commercial vehicles," Ford's chief operating officer, Jim Farley, told Reuters at the time.

Ford also is an investor in Michigan-based startup Rivian along with e-commerce giant Amazon. Ford had plans to co-develop an electric vehicle with Rivian for its Lincoln luxury division, however those plans were scrapped due to the coronavirus pandemic. 

Amazon ordered 100,000 delivery vans from Rivian which are scheduled to go into production next year. With such a large order, GM sees the profit potential of the commercial EV segment, and is looking ahead, so the company is not racing to catch up to competitors such as Tesla.

Tesla has not officially announced plans for an electric commercial van, but GM is aware that Tesla could eventually dominate the segment if its introduces a commercial van of its own. 

Amazon rival UPS has commissioned 10,000 mid-size electric vans from British startup Arrival, which is backed by Korea's Hyundai Motor Group. The combined value of the Amazon and UPS contracts with Rivian and Arrival is estimated at $4 billion or more.

GM is also facing looming competition from other automakers, including Daimler AG, Volkswagen AG said Samit Ghosh, chief executive of the Americas for consulting and engineering firm umlaut.

Mercedes Benz introduced an electric version of its popular Sprinter van called the "eSprinter" for the commercial market. While Volkswagen has its eCrafter commercial electric vans. Earlier this year French shipping company Chronopost ordered 400 of the eCrafter vans from Volkswagen, which shows that demand for electric commercial vehicles is rising.

It appears that GM does not want to be left behind by not having a battery-powered offering in the commercial vehicle segment, which is poised to become a profitable one for automakers around the world.

resource from: Reuters

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