DETROIT — General Motors Co. has launched a commercial vehicle brand dedicated to electric vehicles, dubbed BrightDrop, that GM hopes will help it reclaim ground in the commercial-van segment long dominated by Ford Motor Co.
BrightDrop's primary product will be the EV600 van, which GM will build at an assembly plant in Ingersoll, Ontario, where it plans to invest $787 million throughout 2021 to retool the facility for the van. Powered by GM's Ultium batteries, the all-wheel-drive EV600 will be able to drive 250 miles on a full charge and have 600 cubic feet of cargo space, the vehicle maker said.
FedEx Corp. recently placed an order for 500 of the EV600 vans for delivery before year-end. It will be available to customers other than FedEx in early 2022, GM said.
"The commercial sector, like the retail segment, is shifting to electric, and it's an opportunity for GM to perhaps be a big player," David Whiston, senior equity analyst for Morningstar Inc. said.
GM plans to spend $27 billion through 2025 on electric and autonomous vehicle development and launch 30 EVs globally. Company executives have hinted at commercial EVs over the past several months, but the EV600 is the first one the auto maker has confirmed.
Commercial buyers are more likely to make the EV jump because of their vehicles' fixed routes and costs, Mr. Whiston said.
"At GM, we believe in an all-electric future, and we know it's going to take more than electrifying our consumer vehicles to get there. We really need to leverage our electrification expertise to advance other industries as well," Pam Fletcher, GM's vice president of global innovation, told reporters the week of Jan. 11.
BightDrop also will sell an electric pallet called the EP1 that allows delivery drivers to more easily transport goods from the vehicle to customers' doors, along with fleet management software and services. Executives say the EV600 and EP1 are just the beginning of BrightDrop's portfolio.
BrightDrop will be led by Travis Katz, who came to GM from venture capital firm Redpoint Ventures. The brand initially will operate in the U.S. and Canada, with sales and service going through a new BrightDrop dealer network.
GM estimates that the annual market opportunity for parcel, food delivery and reverse logistics in the U.S. will exceed $850 billion by 2025. Demand for urban delivery to fulfill e-commerce orders is expected to grow 78 percent by 2030, GM said, citing the World Economic Forum. The boost in demand is expected to increase the number of delivery vehicles by 36 percent in the 100 largest cities worldwide.
The electric commercial-van segment is expected to become more competitive in the next several years, with new offerings from Ford, Mercedes-Benz and Rivian. Guidehouse Insights forecasts that U.S. sales of battery-powered light commercial vehicles will climb to 623,000 in 2030 from about 56,000 last year.
Ford accounted for 49% of the U.S. large-van market last year with its Transit and E-Series vans, according to the Automotive News Data Center, vs. a 20% share for the Chevrolet Express and GMC Savana, which GM has not redesigned since their introduction in 1995.
Production of 500 EV600 vans for FedEx will begin around the same time Ford plans to launch the electric Transit in late 2021.
BrightDrop has done pilot testing of the EP1 with FedEx. The pallets can carry 23 cubic feet of cargo weighing up to 200 pounds, and couriers who used them during the pilot were able to handle 25% more packages per day.
GM did not disclose the vehicle's intended tire size or suppliers.
