FedEx obtains first of 500 electric trucks from GM’s EV unit to switch to green logistics
FedEx received the first of 500 electric delivery trucks from BrightDrop, General Motors’ new EV unit, on Friday. It’s a time the two companies are calling a âtipping pointâ for electric vehicles for parcel delivery and logistics.
“What we’re talking about here is transforming transportation,” Mitch Jackson, director of sustainability at FedEx, told CNBC. âWe have been using electric vehicles in our operation for 10 years. They were mostly start-ups, and you had some issues with the gap between development and commercialization.
Although they represent only a small portion of the FedEx fleet of 87,000 vehicles, the Brightdrop EV600 trucks represent a significant sustainability commitment for the global carrier as it aims to purchase only electric delivery vehicles after. 2025 and electrify its entire delivery fleet by 2040.
âWe are now looking at the scalability of commercial electric vehicles. Why is this important to FedEx? We use a lot of vehicles in our operations, and we need a lot of vehicles to make a huge difference in our operations, âJackson said. âWe need this scale, and we need this production capacity. “
The EV600s can travel 250 miles with a maximum load and can carry up to 2,200 pounds. FedEx said they would first be used in the Los Angeles area next year. California is considered one of the most demanding areas for residential delivery in the country, and it has the highest gas prices in the country at nearly $ 4.67 per gallon of regular, according to AAA.
âWe designed these vehicles from the ground up to be delivery vehicles,â Travis Katz, CEO of BrightDrop, told CNBC. âWe have spent hundreds of hours in the field with real couriers. He said the goal was to make trucks more efficient and more comfortable to drive. âWhen you take a client like FedEx that has massive global reach and put those pieces together, it’s a really exciting time for the entire industry. “
BrightDrop estimates that the cost of recharging an EV600 is about 75% less than that of a gasoline truck. FedEx said an electrified fleet would cut maintenance costs in half. Savings are a major factor in going green, and FedEx is also hoping to grab the attention of ESG investors.
âI think the message he’s sending is that sustainability is a critical part of the business,â Jackson said. âIt helps businesses be more responsible, it meets the needs of our customers, it helps our communities. And most importantly, it is also a good game for the investment community.
Competition in commercial electric vehicles is increasing. New state-owned Rivian Automotive, backed by Ford and Amazon, has a partnership with the e-commerce giant and is expected to deliver 100,000 electric vehicle delivery trucks by 2024. UK start-up Arrival has reached an agreement to deliver 10,000 electric vehicles at UPS by 2024. Oshkosh Defense, a unit of Oshkosh Corporation, will build 165,000 electric vehicles for the US Postal Service over the next decade.
âWhen you think of a business like FedEx, what it needs is reliability,â Katz said. âThey need to know that these vehicles will be on the road 365 days a year. They need to know that a company will be able to help them with parts and maintenance if something goes wrong. We have this ability to evolve in a way that none of the other competitors have. “
Wedbush analyst Dan Ives predicts that commercial EV spending will reach $ 1.2 trillion by 2030.
âFedEx is the goose that lays the golden eggs in the EV business space as the mainstay actively seeks to convert to EVs over the next decade. BrightDrop getting FedEx is a major blow to the credibility arm as this logo will have a cascading impact enticing other customers to take the EV route. The adoption of commercial electric vehicles and FedEx are interconnected over the next several years, âIves told CNBC.