GM to launch BrightDrop electric delivery vehicle business

General Motors EV

(Reuters) – General Motors Co staked its claim in the growing electric delivery vehicle business on Tuesday, with Chief Executive Mary Barra outlining plans for its first BrightDrop commercial vans to be delivered to FedEx by year-end.

The move will put GM squarely in competition in the commercial sector with crosstown rival Ford Motor Co as well as startups such as Rivian, Arrival and Canoo that are developing electric commercial vehicles for customers from Amazon to Hyundai Motor.

Fueled in part by the COVID-19 pandemic, GM estimates the U.S. market for parcel and food delivery will climb to more than $850 billion by 2025. And it is one sector that EV sales leader Tesla has yet to crack.

Barra said BrightDrop will offer delivery and logistics customers such as FedEx a range of products and services that leverage the automaker’s expertise in electrification and fleet management.

The BrightDrop EV600 will use a version of GM’s Ultium battery system that will power many of the company’s future electric vehicles, including the Hummer EV pickup and the Cadillac Lyriq crossover.

Barra introduced BrightDrop in an online keynote address at the annual tech and gadget show CES.

In a pre-show briefing, Pam Fletcher, GM vice president of global innovation, said the EV600 is a large, purpose-built delivery van that will have a range of 250 miles (400 km) between charges, with a long list of advanced safety features and built-in internet connectivity.

Unlike Cruise, the San Francisco self-driving startup that is majority-owned by GM and is developing a robotaxi business, BrightDrop does not plan to operate its own vehicle fleet, but will focus on supplying electric vans and related services to commercial customers.

A source familiar with details of the EV600 said it will share its basic underbody architecture with the Hummer EV and a variety of other large GM trucks and SUVs that will hit the market over the next three years.

The first 500 units will go to FedEx by the end of the year, with deliveries to other customers starting in early 2022, Fletcher said.

The BrightDrop commercial van family could eventually include a smaller model designed for medium-distance deliveries and a larger model designed for rapid loading and unloading, she said.

In November, GM said it would challenge Tesla with increased spending and accelerated vehicle production targets. The higher investment will be funded by expanded pickup and SUV production.

Tesla’s soaring market capitalization, and growing pressure from regulators to phase out carbon-emitting gasoline engines, has pushed established automakers to speed up production of EVs, even though for now those models promise less profit than current trucks and SUVs.

GM said it planned to increase spending on electric and autonomous vehicles to $27 billion by 2023, up 35% from previously disclosed plans. The Detroit automaker will offer 30 EVs globally by 2025, and wants to exceed annual sales of 1 million EVs in China and the United States by then.

Reporting by Ben Klayman and Paul Lienert in Detroit; editing by Richard Pullin

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