Rise of online shopping, shipping drives GM into race to electrify delivery products

The explosion of online shopping and shipping during the pandemic pushed General Motors Co. GM-N down a new path, working to improve last-mile deliveries with an electric, made-in-Canada solution.

BrightDrop, GM’s new commercial electric delivery-vehicle business, made its debut at the Consumer Electronics Show in January 2021, and FedEx Corp. has already committed to buy 500 Zevo 600 vans [previously known as the EV600]. FedEx received the first deliveries in December – only 20 months after initial conception, making it the fastest production vehicle GM has ever built.

Since then, BrightDrop has unveiled its second, smaller van, called the Zevo 400, received 30,000 orders for the Zevo 600 and Zevo 400, added new clients including Walmart, Verizon and Merchants Fleet, and started retooling GM’s CAMI manufacturing facility in Ingersoll, Ont., to begin full-scale production of the Zevo 600, slated for December 2022, followed by the Zevo 400 in 2023.

When production begins later this year, it will be Canada’s first large-scale EV manufacturing plant.

“We already saw the e-commerce market exploding and the pandemic basically fanned the inferno,” Steve Hornyak, chief revenue officer at BrightDrop, said during a visit to Toronto to demonstrate the Zevo 600, which has 600 cubic feet of cargo space and up to 400 kilometres of electric range. The van recently set a Guinness World Record for driving from New York City to Washington – a distance of 418 kilometres – on a single charge.

Hornyak said the volume of grocery and other products being delivered jumped five years into the future in a short period of time. According to Statistics Canada, retail e-commerce sales grew nearly 86 per cent in 2020 compared with 2019 after restrictions on in-store shopping pushed more consumers online and retailers altered their delivery models. Since then, the trend has continued.

“Within cities, much of that delivery is done by trucks, which are belching out all sorts of pollutants. They’re belching out greenhouse gas emissions, which are causing climate change, but they’re also belching out particulates, which have an impact on asthma and respiratory diseases,” said Matti Siemiatycki, director of the Infrastructure Institute research hub and professor of geography and planning at the University of Toronto. “It’s really important to find alternative fuel sources and means and methods for deliveries.”

That’s especially the case now that consumers want shipments faster – in some cases, within the hour.

“The model is moving toward convenience and goods coming to you rather than you going to where the goods are being sold. That then changes and creates a rethinking of how our transportation systems work,” said Siemiatycki, who sees cities responding with many more delivery trucks and new solutions for different modes of transportation.

Food delivery services, for example, are often filled by electric bicycles, e-scooters or by foot. Larger goods and groceries are being delivered by trucks and vans, which are becoming smaller in size and moving toward electric, too.

Currently, hundreds of thousands of delivery vans and trucks are on Canadian roads. Few of those last-mile deliveries are made by EVs, but the proportion is growing because of Amazon’s test fleet of Rivian electric vans and Ford’s e-Transit electric vans.

Electric delivery vans cut down on carbon emissions and can improve a company’s bottom line because they reduce operating costs significantly, said Hornyak. The average price of fuel for a gas-powered delivery van is $7,000 a year and that was before the recent spike in gas prices.

“It is just pure economics; fuel prices have skyrocketed and that affects motorists and also delivery companies,” said Siemiatycki. In urban areas with more chargers, companies can set up a fleet of charging stations to make it more cost and time efficient.

“Fleet [delivery] is a different enterprise because they can install stations at their depots and do this at an industrial scale,” he said. Individuals, meanwhile, can face many obstacles when it comes to owning EVs, such as where to charge if they live in a condo or apartment building.

Deepening its ties with the delivery business, BrightDrop has also developed the Trace delivery cart, a electrically propelled box on wheels that can be filled with packages and dropped off to a courier, who can then deliver parcels without having to hunt for a parking spot. FedEx is currently trying it out in downtown Toronto and New York, where parking and loading zones are especially hard to find. The Trace e-cart was developed and tested largely by GM’s Canadian Technical Centre in Ontario.

By 2025, BrightDrop aims to deliver a minimum of 50,000 vehicles a year and by 2030, contribute at least $10-billion of revenue to General Motors.

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