BrightDrop, the General Motors subsidiary that builds electric commercial delivery trucks, is rapidly growing its business and customer base, this time with a growing order from FedEx and a new customer: Walmart.
BrightDrop said Wednesday that Walmart has signed an agreement to reserve 5,000 EV600 trucks — which resemble brown UPS trucks — and EV410, a midsize electric delivery van.
The order will help Walmart grow its delivery service and run a zero-emissions fleet by 2040. Walmart plans to use BrightDrop electric vans as part of its InHome delivery service, which it started in 2019.
BrightDrop's new EV410 all-electric commercial van to be built in 2023 for Verizon.
Walmart will expand InHome from the current 6 million U.S. households to 30 million households by the end of the year, said Tom Ward, Walmart senior vice president of the company's Last Mile delivery service.
"To support the growth of in-home, Walmart will hire more than 3,000 associate delivery drivers" to drive BrightDrop vans, Ward said.
GM started BrightDrop at this time last year. BrightDrop offers the two commercial electric delivery vehicles and other technological solutions for the delivery industry such as the EP1, a propulsion-assisted electric pallet to move goods over short distances, including from the delivery truck to a front door. It also offers mobile asset management for the EP1 to allow for location monitoring, battery status and other remote commands.
Love affair with FedEx
On Wednesday, BrightDrop also said it is expanding its relationship with FedEx.
Both announcements were to be made at CES 2022 where BrightDrop CEO Travis Katz and GM CEO Mary Barra were to be joined virtually by Walmart CEO Doug McMillon and FedEx Express Regional President of the Americas Richard Smith.
General Motors Chair and CEO Mary Barra is shown on screen as her recorded keynote address is delivered digitally at CES 2022 at The Venetian Las Vegas on Jan. 5, 2022, in Las Vegas, Nevada.
Smith said the company signed an agreement to reserve priority production for 2,000 vans over the next few years. This agreement adds to FedEx’s initial reservation of 500 vans announced last year.
Additionally, FedEx plans to add up to 20,000 more BrightDrop vans to its fleets in the future depending on further negotiations, Smith said.
GM is not the first carmaker to enter the EV delivery space. In 2019, Amazon said it would purchase 100,000 electric vans from electric truck maker Rivian. Amazon said it expects to deploy 10,000 of them this year.
BridghtDrop will offer mobile asset management for the EP1. This provides location monitoring, battery status, remote commands to lock and unlock, and over-the-air updates of connected features.
On Wednesday, Amazon said it will be the first commercial customer for the Ram ProMaster Battery Electric Vehicle when it launches in 2023. The deal is one piece in a series of agreements between Amazon and Ram parent Stellantis, which formed last year from the merger of Fiat Chrysler Automobiles and Peugeot maker PSA Group.
Neither Smith nor Ward would disclose how much their respective companies are spending with BrightDrop, but Smith said it is part of FedEx's vehicle replacement budget.
"This is part of our ongoing life cycle management of vehicles," Smith said. "We've talked to a number of suppliers. We've talked to startups inclusive of Rivian and had conversations with them and ongoing conversations with them and a number of others."
But Smith said BrightDrop appeals to FedEx because of GM's commitment to EVs and the number of dealerships available to service the vehicles.
“They have a vehicle that works and we love it," Smith said. "We want to buy a lot more of them.”
EP1 pilot
FedEx, which plans to be carbon neutral by 2040, said it will expand its testing of BrightDrop’s EP1 electrified pallet to 10 markets starting this year.
FedEx tested the EP1 initially in Toronto and saw a 25% increase in package deliveries per day when using the electric pallet.
GM's new startup BrightDrop will offer delivery customers the EP1 (pictured here). It is an electrically powered pallet that will help to move packages, easing the burden on delivery company workers' bodies. Jan. 12, 2021
BrightDrop said it has completed a second pilot with FedEx in New York City. In this limited pilot, using the EP1 allowed FedEx Express couriers to:
Increase package deliveries by 15% per hour.
Remove one on-road vehicle from the delivery route.
Cut delivery vehicle curbside dwell time in half, when used on routes in a high-density, urban area.
Reduced physical strain on couriers.
BrightDrop delivered the first EV600 vans to FedEx last month, built by a German parts supplier. GM said it brought the EV600 to market in 20 months, making it the fastest vehicle it has ever brought to market.
The van is built on GM’s Ultium Platform, which will underpin all of GM's future EVs. GM has said it will bring at least 30 new EVs to market by 2025. GM plans to make the EV600s at its CAMI Assembly in Ontario, Canada, starting in November.
As FedEx works toward global carbon neutral operations, it plans to add "hundreds of thousands of medium electric delivery vehicles over the next two decades," Smith said.
Walmart InHome expansion
Walmart’s InHome delivery service uses trained associates to deliver fresh groceries and other items directly into the customer’s refrigerator, Ward said.
He said Walmart will hire more than 3,000 delivery drivers and equip them with an all-electric fleet of delivery vans, starting next year, Ward said.
Walmart also plans to use electric vans to enable secure and low-emissions deliveries for third-party retailers and brands through Walmart GoLocal, Walmart’s white-labeled delivery service business.
The BrightDrop EV600 commercial delivery van.
BrightDrop also services Merchants Fleet, a fleet management company that offers funding and service to organizations that use vehicles to run their operations. It decided to buy 5,400 EV410s, bringing its total purchase to 18,000 BrightDrop electric vehicles. The company has already ordered 12,600 EV600 vans, which will be integrated into Merchants Fleet's fleet starting in 2023.
GM has not released the price for the EV600 or EV410, but Katz said most fleet managers focus more on the cost of ownership. In a study, BrightDrop found fleet managers will save about $7,000 a year in costs by going electric with the EV600 when compared with similar diesel-powered vehicles, he said.
"The $7,000 savings is from fuel savings and lower maintenance costs," Katz said. "We expect to see the commercial fleets convert to EV much faster than others because they’re really doing the math."
