As General Motors picks up momentum toward the electric future it has been promising for the past several years, it is adding a new brand to its portfolio, BrightDrop. BrightDrop will be the first new GM
In fact, BrightDrop isn’t just a new brand, but also a new business unit, much like Saturn was when it launched. GM hired Travis Katz from venture capital firm Redpoint Ventures as president and CEO of the new unit. Like several other recent business launched by the automaker including Onstar Insurance, OnStar Guardian and GM Defense, BrightDrop was spawned out of the Global Innovation group led by Pam Fletcher. The goal this time is to provide a complete suite of products and services for first mile to last mile deliveries.
The first product is unlike any GM vehicle previously built. The BrightDrop EP1 is a powered electric pallet that enables easier movement of goods over short distances. Equipped with a hub motor, the EP1 can move at up to 3 mph based on the operator’s walking pace. The device can carry a payload of up to 200 lbs and it’s 23 cubic foot interior can be reconfigured with adjustable shelves based on the materials being moved. It can be used to move goods around a warehouse or even to help move objects from a delivery van to the doorstep. The EP1 will be available early this year.
Something you might more typically expect from GM is the EV600 cargo van. This battery electric delivery van is a direct competitor to the vans that Rivian will be producing for Amazon
Another competitor to the EV600 is for Ford’s e-Transit which launches later this year. However, the BrightDrop van is considerably larger with a cargo volume of 600 cubic feet. The largest Transit, the long body, high roof variant only has 487 cubic feet with two seats or 536 cubic feet with no passenger seat. The battery-powered e-Transit will also have a range of just 127 miles, while the EV600 is projected to have nearly twice that at 250 miles.
Whether the typical users of this type of van, such as delivery companies need that much range is debatable. Ford argues that its studies of Transit users show they mostly drive 75 miles or less daily. Commercial customers typically don’t like to buy more vehicle than they need to reduce capital costs. The smaller battery of the e-Transit might theoretically make it more affordable than the EV600, but we don’t know yet because GM isn’t talking about pricing yet.
The first EV600s are expected to be delivered before the end of 2021 with the first 500 going to Fedex
In addition to the vehicles, BrightDrop will provide a range of services including fleet management, service and maintenance and upfitting services. These are similar to the commercial services that help make Ford a leader in the segment with its Transits and F-Series trucks. All of the BrightDrop vehicles will be connected so they can tracked and to provide diagnostics and charging information. BrightDrop will also provide charging infrastructure support to customers which could be very beneficial to large fleets that will need to install chargers in warehouses and depot locations.
The decision to establish BrightDrop as a new company rather than offering these vehicles through the Chevrolet or GMC brands could be a harbinger of what GM is planning to do on the retail and service side. GM hasn’t provided details on exactly how these vehicles will be sold to fleets, but as a separate company from GM (although wholly owned) it may not be subject to existing franchise laws that govern sales in most states.
Other EV startups have established direct sales channels to avoid some of the pitfalls of independent dealers pushing customers to internal combustion vehicles. It’s possible that BrightDrop will sell directly to fleets and set up a network of service centers. It may even contract with some existing GM dealers that sell commercial vehicles to provide service and maintenance. All of that is expected to be revealed later in the year.
GM projects that the market for deliveries will hit $850 billion by 2025 just in the U.S. Even before the pandemic, the growth in e-commerce was driving significant growth in the delivery business and that has grown at an even faster rate in the past year. The combination of increasing demand for deliveries and the reduced operating costs of electric vehicles makes them a perfect fit for something like the EV600.
GM hasn’t announced where the EV600 will be built, but given its launch this year, it will almost certainly come out of Factory Zero, the facility formerly known as the Detroit-Hamtramck assembly plant.