While EV sales are gaining momentum, commercial electric fleets are lagging behind

Not long after Mitch Smedley bought a Ford E-Transit for his plumbing business last November, he sat down with some receipts and a calculator to find out how much the electric vehicle was saving him on fuel bills.

After a few minutes of crunching the numbers, it showed that he was spending about $110 to $140 a week on fuel for each of the four older diesel Transits in his fleet. He then calculated how much electricity he used to charge the electric model to cover the same distance — about 300 miles a week. The cost: about $9 per week.

“I knew there would be some savings because our electricity is very cheap here,” said Mr. Smedley, whose company is based in Blue Springs, Missouri, just east of Kansas City. “But I was amazed when I found out. This makes it really, really cheap to run.”

Passenger cars have been at the forefront of the automotive industry’s transition to electric vehicles. According to Cox Automotive, a research firm, electric vehicle sales in the first quarter of 2023 rose 45 percent year-on-year to 259,000 cars and trucks. Tesla remains by far the biggest seller, while General Motors, Ford Motor, Hyundai, Volkswagen and several others Sell ​​electric models. Cox expects total annual sales of electric vehicles in the US market to surpass one million for the first time this year.

So far, light commercial vehicles make up only a small portion of all electric cars and trucks sold, but battery-powered vehicles are well-suited to work fleets in many ways. Since trucks and delivery vans often only cover limited distances or fixed routes on a daily basis, they do not need large and expensive battery packs. Most get by on enough power to go about 100 miles before needing to be recharged.

One factor that makes electric cars significantly more expensive than internal combustion engine models is that consumers want the ability to go 250 or 300 miles on a single charge, fearing being stranded far from anywhere to plug in. Commercial vehicles are usually parked overnight in parking lots where they can be easily charged and ready to go in the morning with a fully charged battery.

Electric trucks also require less maintenance than conventional vehicles. They don’t require an oil change and have no gearboxes, mufflers or fuel pumps to wear out or fail. And when idling, they don’t use any fuel.

More so than consumers, commercial fleet owners pay close attention to the total cost of owning and operating vehicles over multiple years. This means they are often willing to accept a higher upfront price to buy an electric truck in order to save money over time through reduced fuel and maintenance costs.

Still, commercial electric vehicles saw a slower start to sales, due in part to the problems faced by several companies hoping to manufacture them. Start-ups like Lordstown Motors, Arrival and Canoo have struggled to start or ramp up production, as has Workhorse, a small commercial vehicle maker. Rivian, an Amazon-backed start-up, had hoped to sell thousands of electric vans to the online retailer by now, but has fallen far short of its goals.

The delays opened up an opportunity for Ford and GM, two of the country’s largest automakers, to launch their own battery-powered work trucks. A derivative of the Ford Transit van, the E-Transit comes in a variety of sizes and can be used as a delivery van, shuttle bus or work truck for contractors, handymen, plumbers and other small businesses.

Ford sold around 6,500 e-transits last year. In March, the United States Postal Service ordered 9,250 e-transits to be operational by the end of 2024.

GM formed an independent division, BrightDrop, to build a larger vehicle tailored for package and freight delivery. BrightDrop produced a test fleet of about 500 battery-powered vans to ship to customers in 2022, and began commercial production of its Zevo 600 model at an Ontario plant this year.

Along with the truck, BrightDrop has developed an electric cart that allows drivers to move many packages from the truck, reducing the number of round trips the driver has to make. A version of the trolley is refrigerated for the delivery of fruit and vegetables.

In Hooksett, NH, Merchants Fleet, a company that manages delivery service vehicles, has deployed 150 BrightDrop vans over the past year and is looking to add more.

Brad Jacobs, the company’s vice president of fleet consulting, said the depreciation cost and interest cost on the capital used to buy electric trucks is about the same as for internal combustion engine trucks.

“What we’ve learned from the vehicles on the road is that you save between $10,000 and $12,000 a year because the fuel and maintenance costs are much lower with electric vehicles,” he said. “If a company plans on using it for five years, that’s a savings of $50,000 per vehicle. That is very convincing.”

Merchants Fleet has orders for 750 more BrightDrop trucks and reservations for another 17,000, Mr Jacobs said.

Large delivery companies have been clamoring for electric trucks for years. Amazon hopes to buy up to 100,000 vans from Rivian and is considering an electric Ram ProMaster van that Chrysler’s parent company Stellantis plans to start producing later this year.

UPS has ordered 10,000 electric vans from Arrival, a start-up based in Luxembourg with offices in the UK. Arrival suffered from financial difficulties and production delays. FedEx plans to purchase only battery-powered vans by 2030 and hopes to have an all-electric fleet by 2040. The company has tested 150 BrightDrop trucks, is receiving 350 more, and has reservations for an additional 2,000.

Nelson Granados, a FedEx delivery driver in Inglewood, California, has been using a BrightDrop vehicle, a white van with the orange and purple FedEx logo next to a picture of a bright green plug and power cord, for a year.

Mr Granados gives the truck a thumbs up. The truck has amenities that diesel vans lack, like a stereo and heated seats, as well as a lower floor that makes getting in and out easier.

“You have to be in and out all day, so it pays off,” Mr Granados said. “It’s like a luxury van.”

Mr. Smedley, the plumber in the Kansas City area, has noticed benefits of his e-transit in addition to the fuel savings. On the construction site, the truck can power equipment such as drain cleaning machines, so there is no need to lug a generator around. He started driving the van to Kansas City Chiefs football games — he has season tickets — so he could use the outlets for parties. The truck also secures him premium parking in Arrowhead Stadium’s EV-reserved spaces.

That year, Mr. Smedley decided to add a second electric model to his fleet, a Ford F-150 Lightning pickup. He has also continued to track the savings he is making from e-transit.

“When I look at the costs over five years,” he said, laughing, “it’s almost like getting a van for free.”