May 22, 2024

Shortly after Mitch Smedley bought a Ford E-Transit van for his plumbing business last November, he sat down with some receipts and a calculator to figure out how much the EV would save him fuel costs.

A few minutes of crunching the numbers showed he was spending about $110 to $140 a week on fuel for the four vintage diesel Transits in his fleet. He then calculated how much power it would take to charge the electric model to travel the same distance, about 300 miles per week. Cost: Approximately $9 per week.

“I knew there would be some savings because we have very cheap electricity here,” said Mr. Smedley, whose company is based in Blue Springs, Missouri, east of Kansas City. “But I was amazed when I solved it. It made it really, really cheap to operate.”

Passenger vehicles are at the forefront of the auto industry’s transition to electric vehicles. In the first quarter of 2023, 45% of EV sales That’s 259,000 more cars and trucks than a year earlier, according to research firm Cox Automotive. Tesla remains by far the biggest seller, while General Motors, Ford Motor, Hyundai, Volkswagen and others are selling a variety of electric models. Cox expects annual sales of electric vehicles in the U.S. to top 1 million for the first time this year.

Light commercial vehicles account for a small percentage of all electric car and truck sales so far, but in many ways battery-powered vehicles are well-suited for work fleets. Because trucks and delivery vehicles typically travel a limited distance or route each day, they don’t require large and expensive battery packs. Most people can have enough energy to go about 100 miles before needing a recharge. One factor that makes electric cars much more expensive than internal combustion engine cars is that consumers want to be able to travel 250 or 300 miles on a charge because they worry about being stuck far from anywhere.

Commercial vehicles are often parked overnight in parking lots where they can be easily charged, and ready to go in the morning with a full charge. Electric trucks also require less maintenance than conventional vehicles. They require no oil changes, and there are no transmissions, mufflers or fuel pumps that could wear out or break. And they don’t burn fuel while idling.

Commercial fleet owners are more concerned with the total cost of owning and operating a vehicle over several years than consumers. That means they are often willing to accept a higher initial price for an electric truck in order to save money over time through lower fuel and maintenance costs.

However, sales of commercial EVs have been off to a slow start, in part because several companies hoping to build them have run into trouble. Startups such as Lordstown Motors, Arrival and Canoo have struggled to start or ramp up production, as has small commercial truck maker Workhorse. Rivian, an Amazon-backed startup, had hoped to sell thousands of electric vans to the online retailer, but it was nowhere near that goal.

The delays have created an opportunity for Ford and General Motors, two of the largest U.S. automakers, to launch their own battery-powered work trucks. A derivative of the Ford Transit commercial van, the E-Transit is available in a variety of sizes and can be used as a delivery van, shuttle bus, or as a work truck for contractors, mechanics, plumbers, and other small businesses.

Ford sold about 6,500 E-Transits last year. In March, the USPS ordered 9,250 E-Transits, which are expected to enter service by the end of 2024.

GM has created a separate division, BrightDrop, that specializes in larger vehicles tailored for package and cargo delivery. BrightDrop produced a test fleet of about 500 battery-powered vans that will be delivered to customers in 2022 and began commercial production of its Zevo 600 model this year at a factory in Ontario.

In addition to the truck, BrightDrop has developed an electric cart that enables drivers to haul many packages from a truck, reducing the number of trips a driver makes back and forth. One version of the cart is refrigerated and used to deliver produce and groceries.

In Hookset, New Hampshire, Merchants Fleet, a company that manages vehicles for delivery services, has been testing 150 BrightDrop vans for the past year and is eager to add more.

Brad Jacobs, the firm’s vice president of fleet consulting, said the capital depreciation costs and interest costs for buying an electric van are about the same as buying an internal combustion engine truck.

“We know from vehicles on the road that you can save $10,000 to $12,000 a year because the fuel and maintenance costs are much lower with electric vehicles,” he said. “If a company plans to have a five-year lifespan, it’s saving $50,000 per vehicle. That’s pretty compelling.”

Mr Jacobs said Merchants Fleet had ordered 750 BrightDrop trucks and had another 17,000 on reservation.

Large delivery companies have been calling for electric trucks for years. Amazon wants to buy as many as 100,000 vans from Rivian and is considering an electric Ram ProMaster van that Chrysler parent Stellantis should start producing this year.

UPS has ordered 10,000 electric vans from Arrival, a Luxembourg-based start-up with operations in the UK. Arrival experienced financial difficulties and production delays. FedEx plans to buy only battery-powered vans starting in 2030, and hopes to operate an all-electric fleet by 2040. It has tested 150 BrightDrop trucks, is taking delivery of more than 350 and has ordered another 2,000.

Nelson Granados, a FedEx delivery driver in Inglewood, Calif., has been using a BrightDrop vehicle for the past year, a white van with an orange and purple FedEx logo next to a picture of bright green plugs and wires .

Mr. Granados gave the truck a thumbs up. The truck has comforts not found in diesel vans, such as a stereo and heated seats, and a lower floor to make entry and exit easier. “You’re in and out all day, so it’s worth it,” Mr Granados said. “It’s like a luxury delivery truck.”

Mr. Smedley, a plumber in the Kansas City area, noticed benefits from his E-Transit beyond fuel savings. On a job site, the truck can power equipment like a drain cleaning machine without having to lug around a generator. He started driving the van to Kansas City Chiefs games—he had season tickets—so he could use its electrical outlets for tailgating parties. The truck also secured him premium parking in the space reserved for electric vehicles at Arrowhead Stadium.

This year, Mr. Smedley decided to add a second electric vehicle to his fleet, the Ford F-150 Lighting pickup. He also continues to track his savings from E-Transit.

“When I look at the cost over five years,” he laughs, “it’s almost like getting a free van.”

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