Amazon, UPS, and FedEx, in search of cost savings, partnered with startups that are now rolling out electric vans. Has Ford, the leader in vans, dropped the ball?
By Wolf Richter for WOLF STREET.
The biggest no-brainer in the history of mankind, or at least in the history of electric vehicles going back to the 1800s, is finally taking off in a massive way, after attracting billions of dollars of investments: The humdrum business of manufacturing lowly delivery vans, more specifically electric delivery vans for stop-and-go urban delivery routes in the age of ecommerce.
All the big automakers and a slew of startups have jumped on it. Delivery companies, such as Amazon, FedEx, and UPS, seeing the savings in operating costs provided by those vans, are clamoring for them. Amazon, for which delivery costs are a huge item, has been the most aggressive. And Amazon, UPS, and FedEx are doing it in competition with legacy automakers — which came as a wake-up call for the automakers.
In the US, commercial van sales fell 15% in 2020 to about 422,000 vans (from nearly 500,000 in 2019), despite the boom in ecommerce. Ford is the largest player in the US, with a share of around one-third of the van market.
Any electric van sale comes at the expense of a gasoline or diesel-powered van. It’s a zero-sum game. This is true for all EVs. They’re still vehicles, just with a different power train, and they compete with internal combustion engine (ICE) vehicles in the same market. Any sale of an EV is a lost sale of an ICE vehicle. Legacy automakers have finally started to pay attention.
Electric vans have some unique advantages. The average delivery route is 74 miles per day – with some routes being longer and others shorter – according to Ford’s Telematics data, as these vans spend a lot of time idling while packages get unloaded and dropped off at points along the way. At night, these vans sit at the depot.
So, for electric delivery vans, “range anxiety” is not a problem, and charging is done at night at the depot. Maintenance is far lower than with diesel or gasoline-powered vehicles. All modern EVs use regenerative braking, where the motors are used to brake. In the process, they charge up the battery. And at stops, electric motors don’t idle. This makes electric vans very efficient on stop-and-go delivery routes.
GM estimates that its BrightDrop electric van will save $7,000 a year in operating costs compared to a “diesel alternative” (“Estimated based on assumptions for fuel costs, miles traveled, maintenance and cargo load. May vary based on use case,” it says).
While UPS and FedEx and others have been testing electric vans for years, on a relatively small scale, the industry is now ramping up. The battery technology is the tricky part, but the rest of the EV is far simpler and easier to build than an ICE vehicle. And given that delivery routes are relatively short, batteries are less of an issue, and less of an expense, in vans than in vehicles for personal transportation or long-haul trucks.
GM announced that it would start producing the first of its BrightDrop EV600 electric vans late this year at its CAMI manufacturing plant in Ingersoll, Ontario. The first 500 vans will be sold to FedEx.
The EV600 is designed similar to other EV platforms: all-wheel drive with small-ish motors in the front and in the back between each set of wheels, with a big battery pack in the middle (image via GM’s BrightDrop):
These platforms are flexible, and can be stretched, and more powerful motors, or more motors, can be added, which will lead to commoditization of the components and cost efficiencies, and open the door to new entrants into the vehicle market to compete with legacy automakers, which is precisely what is happening.
In September 2019, Amazon, whose delivery costs are huge and controlling them is a priority, announced it would purchase 100,000 electric vans from a startup company, Rivian, which has raised about $8 billion since then, including $2 billion from Amazon and $500 million from Ford.
The Amazon vans, which come in three different sizes, are based on Rivian’s Skateboard platform, that allows for all-wheel drive with small motors between the wheels and the battery pack in the middle. Some Amazon vans may also be front-wheel drive only, minus the motor in the rear (image via Rivian):
After testing the vans for months, Amazon announced in early February that it has started testing the vans in Los Angeles on actual delivery routes and will start testing them in 15 other cities this year.
“Amazon is working with Rivian to conduct additional testing of the vehicle’s performance, safety durability in various climates and geographies, as engineers continue to refine the vehicles for the start of production slated for the end of this year,” it said.
“Amazon has also started getting its buildings ready to accommodate the new fleet of vehicles and has installed thousands of electric vehicles charging stations at its delivery stations across North America and Europe,” it said (image via Amazon):
In August, Amazon also ordered over 1,800 electric vans from Mercedes-Benz. Amazon already operates thousands of electric vans around the world and said that in North America and Europe, in 2020, these electric vans delivered 20 million packages, and that it “is redesigning its delivery stations to service electric vehicles – ranging from the electrical design to the physical layout.”
FedEx has been testing electric vehicles for a decade. In November 2018, it announced that it would add to its fleet 1,000 electric vans by Chanje Energy, a California-based company, buying 100 of the vans and leasing the remaining 900 from Ryder System. For FedEx, these are small numbers, but they will allow the company to test the vans thoroughly before becoming reliant on them. And if those vans work out for FedEx, they will be more competition for GM and Ford.
UPS has also for years been testing electric delivery vehicles and is converting some of its older diesel vans to electric drives. But it made headlines last April when it gave an “initial order” of 10,000 electric vans to Arrival, a startup in the UK with which UPS has partnered since 2016. “UPS and Arrival have co-developed the vehicles,” Arrival said, to “exactly match UPS’s specifications.”
Arrival said that its new electric vans offer “50% operational cost savings for fleet owners.” The 10,000 vans will be “rolled out in the UK, Europe, and North America from 2020 to 2024.” UPS has the option to purchase another 10,000 vans during this period. In addition, UPS made an investment in Arrival of an “undisclosed amount.”
Ford, the US leader in ICE van sales, is getting its E-Transit van ready for sale in late 2021. Despite its investment in Rivian, Ford’s E-Transit will not be based on Rivian’s Skateboard. Unlike the other models discussed here, Ford’s van will not be based on a new platform at all, but will be an electric version of its existing ICE Transit Cargo Van.
Some of the advantages of EVs disappear when an existing ICE model is converted to electric drive. Maybe Ford got lost in its own Transit success or didn’t want to spend the resources to design a new platform and didn’t want to use Rivian’s platform, now that it has become a competitor. And it may have dropped the ball.
European automakers Volkswagen, Mercedes-Benz, and various brands now under the new roof of Stellantis are rolling out electric delivery vans based on their new platforms. Chinese automakers have been very active in building electric vans for use in China.
But the most fascinating part of this development is that huge delivery companies with immensely deep pockets — Amazon, UPS, and FedEx — are partnering with startups to create electric vans in competition with legacy automakers, and legacy automakers are now scrambling to not get run over. That competition is a good thing.
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Imagine, If Amazon had their electric van fleet up and running in Texas right now and they were buying all their electricity from Griddy at current winter storm spot prices of $9.00 per kWh. That would take a big whack out of the potential cost savings. Might take a couple of years to make up for running a week at those prices.
If the Amazon delivery station has power and can therefore operate, its charging docks for the e-vans have power, and the e-vans are all charged up in the morning and good to go. And since they may be all-wheel drives, they’re in better shape than regular vans.
And if the Amazon delivery station doesn’t have power, the vans don’t matter because nothing is leaving the delivery station because it cannot operate without power.
And retail prices for electricity don’t change from day to day and minute to minute for the end user, which a business like a delivery station is. Much like your home electricity bill.
The fluctuation in rates only affects traders and utilities that buy the electricity from power producers or in the wholesale market.
Don’t know about this Wolf, remember, a lot of these guys running Amazon delivery are contractor companies. So, unless Amazon is providing the basic equipment, and making those workers leave the vans to charge over night on their site, it gets interesting. It gets complicated.
Once those contractors (small-ish companies) get the e-vans, they will be forced to install the charging docks at the depot. If Amazon is your only customer, finances the vehicles that it tells you to buy, and provides the software for you to do your job, you do as Amazon says.
Well, I can understand that, but I also recall reading more than a few times there was a good turnover on the contractor companies. Of course, it’s very hard to know the real truth these days reading media rags, since they overwhelmingly tend to present the side of the story on their angle. After all, it’s in vogue to bash Amazon at any opportunity.
Too bad the tech and business media all seem to be driven more by angles than facts.
Wonder if Amazon would just buy Robins outright if it had the right capabilities. It would certainly be reminiscent of the Kiva purchase. In fact, one could see a marriage of Kiva, Zoox, and may be a company like Rivian under those circumstances.
If Amazon bought Rivian, it would certain put a frown on the world of SPACs.
Oops, meant to say Rivian instead of Robins.
“Too bad the tech and business media all seem to be driven more by angles than facts.”
LOL, as opposed to your clear right wing media, that supports a leader who with a straight face says that windmills cause cancer?
No Wile E…
I mean all media. All of them are driven by angles… if you can’t see it… well, not my problem.
Very few out there actually look at the facts, all of the facts without slapping their own lens on it.
Will toilets be installed in these 21st-century vans? Or at least a holder for multiple pee-bottles, wipes and a re-purposed bucket for the brown stuff?
And a sign “Do not flush when stopped”. Or “Flush only above 30 MPH”.
You drank some funny kool-aid Wolf.
No, but I did live in Texas and Oklahoma for nearly three decades and I know what happens in a brutal winter storm when the power goes out: a regular company cannot function anymore because nothing works, and you cannot even get your employees to show up to work because they cannot get there. Been there, done that.
Wolf is correct about places similar to OK and TX in flyover country at about the same latitude.
We lived east of there at about 35 north, and when it snowed or iced, everybody just stayed home and kept the wood stove fed.
Once out of electricity for 2 weeks due to ice bringing down even the main lines, no problem, as most folks had wood back up, as well as the large propane tank that suppliers put a bit of anti-freeze into in the fall fill up.
Might mention that schools were also closed due to potential for buses to slip and slide on the ice.
Wolf, you are correct that normally the end user does not pay wholesale prices, or see prices that vary drastically in the short term. But in Texas end users have the choice of buying their electricity through an innovative ( cough) company called “Griddy”. In normal times this would give people (or business’s) average prices of 9.5 cents per kWh instead of the 12.5 cents of the normal retail market. But the cost of this low price is the risk of not having the price limited on the top side until you hit the regulatory limit of $9.99 per kWh. Ironically this would have been an especially attractive proposition for companies running a number of EV’s because they might have seen even lower average prices because they use most of their electricity at night. The lesson here is not that EV’s are bad, but in a future of increasingly increasing and unstable grid prices beware of Greeks bearing gifts.
Thanks, I didn’t know about Griddy. Shoudda checked.
For large users, there’s also the futures market, to hedge your consumption costs. You forecast your consumption needs and costs, like forecasting any needs, commodity or financial. If prices go up, your contract makes you money, if they go down, your contract loses money but you even out to your forecasted price, which is costed into your inputs.
And you don’t have to worry about upward limits. Let the specs worry about that.
Anyway, “Power supplier, Griddy, told all 29,000 of its customers that they should switch to another provider as spot electricity prices soared to as high as $9,000 a megawatt-hour. Griddy’s customers are fully exposed to the real-time swings in wholesale power markets, so those who don’t leave soon will face extraordinarily high electricity bills.” – Dallas News.
Looks like Griddy didn’t hedge …
We are entering another Ice Age. Global Warming is obsolete.
Amazon can always hedge its electrical costs.
Yes. This is a one off. Minnesota with all its wind turbines are doing just fine.
A solution will be found to de-ice the wind blades in the future.
the solution is obvious. store the electricity generated by the turbines and then use it to heat the blades and de-ice them when needed.
Tony, maybe a better idea is to install natural gas fired heaters on the turbines to deice the blades when needed.
There are three separate synchronized electrical grids in the continental US. The eastern interconnect, the western interconnect and Texas (Ercot). So it is unlikely that Minnesota or nearly anywhere else would have the kind of electrical problems currently tormenting Texas because they would be burrered by the capacity of a huge multi-state grid spread over a large geographic and climactic area. This is a regional grid capacity problem, not a wind turbine problem. Like in any many things ( trucking regs for one) Texas does its own thing and does not play nice with others. This can be good or bad depending on your point of view.
Maybe a large coal stove under every windmill.
The storage of electricity is the greatest difficulty for alternative energy. It is not easy. They have been trying to figure it out for nearly 50 years. Molten salts is one of the contenders, I believe.
This is a problem when non-engineers get involved in things like alternative power. They say words like “easy” when it is far from easy.
On windmills you can have de-iceing coatings and/or active de-iceing features. In Texas they did not. It’s important to remember that many coal, natural gas, and nuclear facilities in Texas are shut down or having problems because of the winter weather. Where I am in the Midwest, where we are used to it and it’s even colder. All power plants and windmills are working perfectly.
The cheapest, most sustainable, and reliable method of heating are certain newer types of wood burning furnaces with specially treated wood. (Regular wood works in a pinch). The only issue with them is if alot of people do it in a small area, it will create localized pollution, while less than coal and recycled by new trees, this pollution will be right in the cities instead of coming out of a power plant at the edge or outside of town. This still greatly greatly beats any type of backup power/heating a normal house would have.
Most windmills are still working in Texas and the working ones are generating above normal amounts of electricity, while in the meantime, natural gas pipes are freezing up.
I thought setting fire to the blades was the preferred method…
A lot of smart people have been dealing with aircraft de-icing for maybe 100 years, so I’m certain de-icing wind turbines is total child’s play to them.
The mental damage years of talk radio has done, however, is not so easily fixed, sadly. A lot of strange thinking people have been created, and given even stranger things to get mad at, blame, or just bitch about, instead of our present insanely distorted wealth distribution system and who and what really caused it. In short, they don’t know what they are upset about.
Not to mention trashing this ball in space that through pure chance gave them an opportunity to even “have (their own?) opinions” in the first place.
That is the essence of corporate theft. It starts from the top down (tax payer pays for profitable corporations to retool, then pay the same corporate thieves when times get tougher.
I could go along with this if these multinational shareholder paid their fair share.
But they don’t. They are thieves of the worst kind.
My heating system is four electric resistance heaters. The most expensive one was $15. Two were free. And one I paid $10. They are hooked to a multi billion dollar nuclear power plant about 30 miles away. The bill last month was $111. Will be higher this next month, but not too bad. I have heated with wood, but I got enough of that after a few years.
Is Texas still on it’s own grid?
Seneca, very few people even have electricity right now in Texas so forget about the cost per KWH when you can’t even make toast (or heat your house). Many folks are charging their cell phones with their ICE car engine running, powering the USB outlets.
Good thing we have ICE cars as it’s 10 F right now and there are no Tesla’s or Leaf’s on the road (or anybody else for that matter. LOL).
But I do like the idea of these EV vans. I sure hope in the states where the grid is “challenged”, the grid and power capacity gets reviewed to take on the current loads and the new loads of the EV vans and cars.
I suspect in these UPS, FEDEX, and Amazon load out warehouses where they will be night charging the vans, they will install backup power generators fueled by diesel or natural gas. I know I would.
Ten years ago, Al Gore and others were saying we would have no more winters. No one would see snow.
Doesn’t being a right-wing blow-hard get tiring after awhile?
It’s a serious question. First, I doubt he said that. Secondly, can’t you do better than dragging out Al Gore? Climate change due to humanity is accepted by 98% of scientists. I’ll take them over Rush “oxycotin” Limbaugh, Sean Hannity and all the other professional liars on your “fair and balanced” propaganda channel.
Your comment is really nonsensical considering what’s happening in Texas is evidence Al Gore was right: Climate change is real and it’s something we need to work on.
Let me guess, you think Covid is a hoax too, right?
If I were a Republican (Either a millionaire/billionaire, where it would make sense, or the other 98%: “The Dupes”), I’m not sure I’d be strutting around too proudly after what President Soprano unleashed on this country via corruption and incompetence.
Please Sir, don’t humiliate yourself on the internet!
Interesting display of tolerance for other’s opinions (reminder: it’s not the right-wing burning down Portland. Or Milwaukee. Or mid-town Manhattan…).
Al Gore may or may not have said “no more winters”, but he did say “no more snow on Kilimanjaro within 10 years”.
For your reading pleasure, I’ve attached the link to Mount Kilimanjaro’s (open) ski lift.
I will reply here to nodecentrepublicansleft. The ultrarich greenies have the biggest footprint of anyone on earth. If they would lead by example more people would believe their message. I suspect their main driver is the guilt they feel for consuming so much or either they are front running green investments.
Amazon, Ups, Fedex should start prepaying their retirement plans like the USPS. IIRC the Post Office was stuck with that theft because they had the audaciety to consider electric delivery vehicles; for the same reasons mentioned above.
The fosil fuel boys went hysterical, and their well paid lap dogs started growling.
Slightly OT, isn’t fossil fuel kind of like good booze? Limited supply per vintage, gets better with age, and does not spoil. Why do the oilies hate their grand kids so much, not to leave a good future for them?
Then the battery freezes up.
Gas cars can freeze up too (especially firing up a diesel), right now, gas cars perform better at lower temperatures, but in the future, this may not be the case. There’s alot less parts in an electric car, making a special heating system or making the battery perform better at cold temperatures, would hugely outperform an ICE.
No one would buy electric at a flexible rate. All power deals are done at long term which is no more than 10 or 11 cents per kwh
There has been a company on Vancouver Island that has retro-fitted ICE vans and work trucks for municipal govts and the general public. They’ve been doing it for several years now and have a pretty good reputation. These are NOT junkers, but high tech and state of the art vehicles. The designers were electrical engineers.
I won’t post the link but they are based in Parksville BC.
“Canadian Electric Vehicles manufactures electric utility trucks and conversion systems to convert fossil fuel vehicles and machinery to battery electric power.”
After watching the movie ‘Ford vs Ferrari’, I think it’s easy to see how Ford could drop the ball on EV.
Big corporations are run for the benefit of those who run them. Long term vision is not their thing.
Read “The Innovators Dilemma” by Clayton Christensen. He explains why exiting companies mostly always fail to adapt to new technologies.
Long term vision and big corporations sounds like Boeing to me!
Seriously though, Wolf’s take on Ford struck me straight on, “Maybe Ford got lost in its own Transit success …”
Recall that when Volkswagen announced their big EV investment pitch recently, and Wolf reported on, BMW also unveiled their new luxury electric SUV. One thing the people of Muenchen made a point to stress was that they would be building the battery systems in-house.
The next frontier is exactly as described above. From an investment perspective, where does one put some capital? And who is going to be the winner in providing the battery systems? Panasonic?
P.S. I know that our moderator does not give out investing advice, but I think its a good question.
Actually, the site’s host continually gives out excellent investing advice; however, if you meant he does not give “stock-picking” advice, you’re absolutely correct.
Any time you can get quality data and analysis like this site provides, that’s about the best investing advice you can get. For example, if you’ve been paying attention to the site over the past few years, you probably haven’t felt inspired to buy a lot of B&M retail stocks.
“Transit success” was no joke. They easily jacked the price way way up, and when wanting to look at them, the salesman’s attitude was a lot like a junkyard guy we used to use 40-50 years ago, back when they could talk on two phones, a CB, and to you all at the same time.
When you asked about a part, his first comment was always, “You must really need this”.
Has a Ford done anything lately? Need a higher death tax.
As we know, they made Farley the new CEO and he has been going around shaking hands and kissing babies. Other than that, business as usual and they embarrassed the Mustang name.
Ford or Tesla or just about any major tech company will be fine. They have the same sugar daddy as Boing.
Seeing these skateboard chassis electric vehicles from different manufacturers has me thinking Tesla is finished. Their stock price is a sick joke, as is their CEO. He’s speculating in crypto while these other companies are about to eat his lunch. He’s out to lunch.
I mean, is he even allowed to use Tesla’s money to invest in crypto?
Tesla is turning into one of those Japanese Zaitech companies.
MB, that’s a good question…..!
I share the optimism, however I also remember that 20 years ago or so CNG vans were all the rage as the new best alternative fuel for uses such as delivery vehicles, yet discounting a few niche case they never became the backbone of commercial vehicle fleets. And that’s despite the fact that CNG is a proven technology – you can go out and buy CNG vans -, not just a mirage of automotive & startup CEOs.
Who Killed The Electric Car?
Ounce upon a time there was a electric car made by GM.
They were running around in Southern California by consumer lease only.
Check out the history of the “EV” narrative by “Winning” Charlie Sheen.
Who Killed The Electric Car
GM’s new electric cars are doing just fine. And it’s coming out with all kinds of new models. What happened with the EV1 in the 1990s is an interesting story, centered around battery technology not being ready for prime time, and around legacy automakers resisting EVs. But the story has been obviated by events.
CNG seems to have found its home in municipal fleets, buses, garbage trucks, etc. The size of the high pressure tanks, and the availability of refill stations doomed it for general use.
Actually LNG may circumvent the pipe delivery system and reinvigorate that industry. The EV will never be sole technology as long as battery/storage tank cost comparisons remain. The ICE in the last fifty years has gone from a lifetime of maybe 100k miles to 300K or more, esp when burning clean NG. Long term cost comparisons are favorable. I am thinking of converting my older PU to play the backside of the transition.
I graduated college in 1978. The electrical engineering department built an electric car if I am not mistaken. We had a guy come and talk to us about generating electricity with ocean waves. Seems like we are going to have to kill off cheap natural gas to get to zero carbon dream as natural gas is too cheap and abundant to suit the greenies.
Seems like more effort ought to go into creating low cost shelter instead of reconfiguring the transportation system as shelter is more of a basic need than delivering a package from China.
Post Office moving to EV, Public Transportation too.
Major Snow storm like this, California Fire or Hurricane- can put whole infrastructure down for several days at least, for weeks in some cases.
Unless you use solar and wind for powering those EV at night, carbon foot print doesn’t really change.
Instead of burning fossil inside ICE, you will burn it at Power Plant near the city.
I agree that solar / wind needs to become primary regeneration source for the batts. However, I am guessing these transpo giants will have 7-10 days worth of extra batts in their warehouses, ready to swap out in the event of a prolonged blackout. Additionally, they could have propane generators available for backup charging.
I live in a 100% OTG home. No sun for 2 full days and I am toast. I have a generator for backup like most OTG homeowners.
I designed consumer products for a living. Once in a long while you get a good idea from non technical folks, but very rarely. A lot of people have ideas, but most do not pass the test of it being something the customer will pay for at a price that will generate a return for the company.
It’s kind of a new era that money is flowing so free that Tesla can hang around for more than 10 years losing money. I think the zombie company ratio is now at 20%. This is not capitalism, where resources flow to the most efficient but now to the inefficient if they are political ly connected. It’s not healthy for long term prosperity. Supposedly a recession is better for long term wealth than the boom as the recession purges and generates creativity.
A bit unrelated but didn’t you take a short position against the broad market via a derivative a few months back? Care to give an update?
Wolf will most likely be correct if he can hang on. Wouldn’t surprise me if we make one more manic top in s&p500 to 4500 maybe even 5000. There are still a few it hasn’t sucked in, but most likely the bust will come. Somebody is going to say is it really logical to be paying $5000 for $50 of dividends in a 1.5% growth economy?
Yes and after 8 to 10 years the batteries are useless, and thats assuming they charge properly after a few years, still not been tested yet, and the cost of these batteries is huge, plus the old batteries are non recyclable a complete waste of rare earth minerals,,
Instead they should be going down the Hydrogen fuel, which only exhausts water vapour, where as EV vehicles need a mass of electricity to be charged and think of how many more power stations we will need if these idiots get there way and only Electric vehicles are allowed as they want, and controlled by AI so the creeps at the WEF can say where and when you can go anywhere, IF you are lucky enough to be allowed to even have a vehicle..
EV are NOT a good or clean idea..
A commercial ICE vehicle being used for 10 years every day all day is kinda at the end too. You’d be swapping engines and other major parts before you get there to keep it running reliably. That’s expensive and ties up the vehicle. With an EV you can swap batteries, and the rest is fine. There are no good cheap solutions to wear and tear of a commercial vehicle that has been used every day all day for 10 years.
How many miles are Mercedes-Benz cars good for?
Mercedes-Benz In 1970 and 1980 had rolled over 1 million kilometers, and it was still running like a tank.
That was 40 years and many MBAs ago.
I have heard people say the 5 cylinder Mercedes diesel was one of the best engines ever made. They were used in sprinters til emissions knocked it out and was replaced by 6 cylinder that was complicated and less fuel efficient. Supposedly they would go 300,000 miles with little to go wrong.
The rest is not fine, Wolf and you and others always downplay this fact.
At ten years use in any EV commercial vehicle you swap tires and brakes several times, suspension components (ball joints, tie rods, control arms, shocks, etc), drive axles and CV joints, gear cases (EV’s have those), probably a few electric motors (commutators wear out, maybe a few electrical parts, brushes, shaft bearings, etc, etc.
Whether you drive an ICE vehicle or and EV that long, it is reasonable to expect wear and tear on the entire drive and chassis.
Swapping a drive battery is not that simple and if you look where it is located, that becomes evident, and it is costly.
Of course it must be totally beyond the wit of mankind to make it simple to swap a battery pack or Gods Wrath will descend upon us all for the insolence!?
I think the designers working on this scale know exactly what they are doing. One of the things they will be doing is MTBF calculations on all of the parts. The high MTBF-items will all be very easy to maintain (or eliminated for better items).
This is standard engineering stuff. Car builders, who are not French, are extremely good at it.
Electric motors for industrial use, and even in some appliances like washing machines today, do not have brushes. They are synchronous variable reluctance motors driven by an inverter that controls the motor speed and torque. Mechanically very simple devices and sealed.
The trixy thing is the transistors in the inverters, the dies flex with heating and eventually they will crack. Professor Rik De Doncker, RWTH Aachen University, has made a career out of this problem.
He kinda hit that one right on the butt, with everything going electric Now, whereas I was 20 years too early :p
Great post & insights.
I asked someone the other day if it wasn’t time to consider “forever appliances” – that are home-owner maintainable, component-swappable, low-energy-use, highly-reclaimable subassys that last … a very long time.
What’s your take on the technical potential of this idea?
I’m thinking about city-scale distributed assembly, generic parts (components fit lots of models), web-enabled std interface, all smarts on linux board, etc.
Wolf – this is riff off your generic-component skate-board chassis notion. It’s a stretch, but still in the ballpark. :)
There will never be a EV in every driveway. Heck. it took over 40 years for the ICE autos to achieve mass market status to coincide with the Interstate System . EV’s will be for the privileged while urban residents will make do with mass transit. Rural people will get by with whatever the driving infrastructure will allow, including even passenger trains. It will be the objections you are raising that will make the above so. EV’s will be sold, financed and maintained in a manner that is unknown to us now but it will be a new paradigm from today.
batteries can be reused after their life in a car for other purposes such as grid backup. Well known fact if one bothers to research.
Rare earth are mainly used in the electric motors of EV (plus some for the electronics). Guess what an FCEV also has. The battery itself does not use Rare Earths
As much as anything, this is about the ability to come up with a new idea and be efficient in designing, developing and fielding it reasonably quickly. The US automakers seem to be dinosaurs in this regard.
Most EV batteries will outlast the car. There are lots of Tesla’s that have gone 300k miles.
I’m not a Tesla fan. I drive a Chevy bolt, which is a stupid looking, low cost, And very practical long range EV. Per mile, my driving costs are 1/8th the cost of my Subaru. I pay extra for 100% green energy.
Companies are working on recycling li batteries, and removing cobalt from the cathode. It is coming.
Hydrogen is much less efficient than electricity generation. First, generate electricity. Then, create hydrogen. Then, transport hydrogen. Then, store hydrogen. Then, form electricity from hydrogen to drive motor. Much lower efficiency than an EV. Maybe 10x worse. That would mean a hydrogen future is 10x harder than an EV future!
Mass distribution of hydrogen is an insanely difficult thing. Hydrogen tanks for cars are as expensive as EV batteries. Hydrogen is stored at very low temperatures and dissipates over time. Leave your hydrogen car in the garage for a couple of weeks and you will find your tank empty.
You may see hydrogen in commercial aircraft over time. Maybe long haul freight. Not cars. And if solid state batteries are commercialized, maybe not trucks, either.
Go try an EV. They are super fun to drive. I love the idea of EV delivery trucks! Companies will save tons of money, and air will improve. Everyone wins.
“I pay extra for 100% green energy.”
Haha, what? This is the kind of dumbed-down society we’re living in. Google “lithium mine” and click “images.” You call that “green?” “Green” and “energy” are mutually exclusive.
Totally agree. Chris at Capital exploits wrote a good article on green energy basically stating that green mining is hugely exploitive of the planet and that there will be a lot of money made on green energy but it’s only a costly temperary fix for peak oil on our way to a longer term solution. I sure hope they figure it out or our grandkids will be going backwards a hundred years in modern conveinances.
No, I pay extra for 100% green electricity.
Go look at a coal strip mine, or the Alberta tar sands. It’s not lithium batteries in a vacuum—-it is one technology compared to another.
We know the cost of fossil fuels. Pollution, global warming, asthma, cancer. Geopolitics? Think about it.
You don’t think those earthmovers at the lithium mines are burning diesel and aren’t oil dependent? How about the surrounding landscape? “100% green?” Laughable. Oil is 100% of our economy, and it’s in everything you use day to day. You are not “100% green” by any stretch. You are a virtue signaler, nothing more.
Way to go, Bill MB.
Progressive thinker with strong practical streak. Winning hand.
Where and how much are the arbitrary subsidies?
Do you mean for oil?
I don’t know where to start, but armies, tax breaks, depletion allowances quickly come to mind…
High taxes on gasoline and diesel are an important income source for government.
consumer taxes, industry subsidies
It’s very simple, like Europe and the UK, they are going to ban all petrol/diesel cars and vans. Get over it……….
Buying a used car is very green. It will take a while to exhaust as much CO2 as was produced in the total manufacture of the vehicle. Not just at the factory, but also consider the incidental costs of acquiring and manufacturing the metal and plastic from the beginning.
– “a startup company, Rivian, which has raised about $8 billion”
I am impressed by this amount, and… yes, this is good order of magnitude to start a Tesla of vans.
Should ask army, navy and air force to start using vehicle powered by batteries.
Already in the works. Just google it.
“Army Futures Command has given a green light to ground maneuver officials at Fort Benning, Georgia, to find out what it would take to outfit the service’s tactical and combat vehicles with electric engines.”
“The Maneuver Capabilities Development and Integration Directorate is moving forward with the development of future electrification requirements for the Army’s ground force, according to a service news release.”
“We know industry is making significant progress in the electrification of vehicles and, from our perspective, the operational and tactical benefits couldn’t be clearer,” a Maneuver Requirements Division project officer said in a statement to Military.com. “We believe now is the time to start moving out on electrification, because the available technology aligns with the capabilities we are pursuing.”
I actually put together a proposal for the Navy to do that about a decade or so ago. There was some sort of contest for energy saving ideas and I proposed electrifying or CNGing the base delivery vans. The military was experimenting with ideas like that… electric golf carts instead of cars and vans for shuttling base workers around… CNG buses… etc. Even a few electric buses.
The problem was that maintenance is usually outsourced… and you would need a separate contract for these more “exotic” vehicles. The local Ford dealership would be happy to bid on maintaining Econolines, Tauruses, and even non-Ford delivery trucks. But they wouldn’t include a CNG or electric vehicle offer within their bid proposals.
It really is a “Go Big or Go Home” situation.
Very interesting how the industry is being shaken up. I think most traditional car makers are doomed with massive debt, huge investment needed and shrinking margins over the coming years. Newcomers will eat their lunch.
It’s also scary to see how Amazon eats or controls everybody. Amazon becomes the government.
Next step is self driving delivery vans. The entire population will be unemployed and buying Chinese stuff through Amazon with their $600 / month UBI checks ;)
I need more than $600/month….try $2,000 plus food stamps and free medical. OH, maybe a provision for budgeted home repairs.
I cannot help but see parallels with the telecom industry in the late 90’s early 00’s. Everybody saw massive opportunities with emerging cell phones etc. Money was pouring in. Stocks were hyped. And yes, it changed the world. But most investors lost money. See were telecom stocks are now…
I think a similar thing happened with the airline industry after WW2. Air travel was going to be big. And yes, it became a massive industry. There were winners and losers, but I read somewhere that the airline industry as a whole has never made profit.
Although with EV, I think it will play out differently. You’ll end up with one or two monopolistic battery manufacturers who have patented the winning technology and a bunch of zero margin engine and other commoditised parts manufacturers.
Chinese will build super cheap platforms on which everybody can build their own body. Most of the car market will be super low margin, except for some premium stuff like Porsche etc where the batch matters.
Airline industry == Public Transport
Neither will ever make money directly. They are subsidized by the profits made possible because of them.
ps. most cars are sold because of the badge
Thanks Wolf for the update. Definitely driving costs down for shareholders. Everyone one else remains to be seen. No rights now for an ice car coming down the road? Doesn’t feel right to me.
I would also add that the frequent engine stop and restart (which delivery vehicles perform many times a day) aren’t too kind on the IC engine either. The driving profile and daily distance travelled really do make EVs exceptionally well-suited to perform as delivery vehicles, especially in urban areas. Even as a delivery recipient you get to enjoy the reduced noise in your neighborhood thanks to the silent operation as compared to the sound of a diesel engine starting and shutting down multiple times in your neighborhood.
I ordered some clothes from Walmart, total under $100. It took 8 days and 4 different deliveries to complete the delivery using UPS and Fed Ex. A bag of socks one day, a shirt the next and so on, which means my country road got pounded by trucks 4 times for just me. UPS delivered to me before noon one day, in the evening I saw UPS delivering across the lane to a neighbor.
Are Walmart and Amazon paying any additional road taxes for this lunacy? Heck no. Looks like the distribution logistics need to be a little more streamlined before ANY delivery vehicle would be efficient.
One UPS man told me he meets other UPS buddies on the road about a hundred times a day, waving at each other as they pass by.
Couple things not mentioned above in this great update to the delivery systems, including many good comments:
1. As far as we know, ALL fuel for ICE vehicles is taxed, much of it supposedly for infrastructure maintenance and repair, etc.
2. As such, there will need to be new taxes, per mile or something similar on these delivery vehicles, as well as private cars.
3. All these fuel based solutions are a good temporary fix, but will go away when the physics of gravity are understood better, to the point that engineers/designers can use only gravity, directly per vehicle, as the source of the energy needed.
4. No mention here of the very likely arrival of a CME or Carrington Event that will take out any and all electronics and the electricity at all levels dependent on electronic controls, as it all is these days IIRC. It is also very likely that the same event will reduce the global population of our species, the overabundance of which appears to be the major challenge of our times.
You know how much resources raising kids takes? We are already self culling.
Whatever is stopping cargo trains from going (almost) fully automated and electric?
Trains have used electric motors since the 50″s. The diesel’s are stationary.
They’re almost fully automated now. There has been tremendous labor-force reduction in the railroad industry…inexorably and systematically..for the past 60 years.
Diesel-electric locos are the norm now. Diesel engine drives alternator which drives the electric traction motors. There are almost no exceptions to this in freight service across the U.S.
The cost of putting overhead lines to serve electricity to the locos is – I believe but don’t know for sure – the constraining economic factor which keeps the diesel in the loop.
Even with inefficiencies implicit in diesel-alternator-traction motor design, trains are the most efficient land-based transportation, by far.
The one really great advantage an all-electric design might offer is regenerative braking. Think about a big train going up and down a mountain range, and all the energy that gets wasted.
Electric freight and passenger rail (via overhead wires) has been the norm in Europe and Russia for many decades (the Trans-Siberian is electrified).
I know about Europe. Russia has a lot of diesel-electrics in addn to all-electric. Might be an issue of traffic density (has to be certain num of trains per unit time to justify maint and install of overhead lines)
Trying to figure out why U.S. tried and gave up on electrified. Pennsylvania was electrified in the Wash-NY-Boston Northeast corridor (freight and passenger), and west from Philly to mid-PA.
Part of the Milwaukee Road up in the Rockies was, too, for a while, and a couple of short lines. But Pennsy gave up on it around the time of their bankruptcy/merger/consolidation to Conrail, and that was that. Same for Milwaukee Road (big-time operator between Chicago and Portland back in the day).
If batteries hit pay-dirt with energy density, we may see locos go all-electric. Get the efficiency with no overhead lines. Also, trains can easily carry one, two, three cars – attached to the locos – whose sole function would be “battery”. Weight and size restrictions are very relaxed on a train with … hundreds of cars in it.
The only vehicles that make a profit being made in the US are ICE trucks and SUVs. Yes, I can agree that the fleets are probably a zero sum game (not sure if that applies to personal cars), but it’s a game that Ford isn’t really trying to win or they would’ve spent the money and acquired Rivian. Economy of scale does not work for EVs yet, the raw material input prices keep skyrocketing. Talk of 100% EV conversion is just lip service to keep investors/politicians/media paying attention. Let’s say you’re Barra or Farley, would you convert your global assembly footprint to EV only and pray that you can make the money from carbon credits or financing in a ZIRP environment, or have EV options out there but ultimately let the market decide?
I think it will be a long time before most cars are EV but the delivery van is the perfect EV app. The key is the fixed schedule. Work on shift, charge off shift.
This is why Harbor Air, operating small planes between Vancouver and Vancouver Island is converting some to electric. It’s a short hop done only on a daily schedule.
The savings are in the very expensive overhaul of the existing turbo-prop turbines.
So now you know I’m not an ICE fanatic fan….last winter we had some areas on Van Isle out of power for over 5 days. I talked to one guy who said his main beef was no showers. So yes they fed their stoves but they sure as hell didn’t stay home. Even if you didn’t have to work that would be a way to go insane. They drove to where there was gas, filled up and got on with their lives.
In these debates there is a huge disconnect between high density urban and rural/semi- rural. Most of the latter expect occasional outages of a day or so. No big deal. In high density urban, i.e. high rise, the dweller is MARRIED to the grid. It almost never fails because it can’t be allowed to fail. Anyone much above the 6 th floor is effectively homeless. Even if he wants to take the stairs, he only has water as long as the ICE generator takes over from the pumps.
In a true rural situation: farm, hobby farm, off grid, etc. people often put a gas or diesel drum up on a metal frame. For 500 $ or so they have the energy equivalent storage of a hundred grand Tesla battery.
Yep. Rural setting is a problem and an opportunity for EVs.
Rural folk use a lot of powerful machines, and their livelihood depends upon them. That’s not the EV niche yet.
The opportunity is that rural settings have space and sunlight, which are the key inputs to solar farm. Wind sometimes, too. Also have water storage opptys for ponds/containment at different elevations, providing hydro-power gen capacity.
Once the batteries get better, the rural disadvantage might well become a big advantage. That’s what I’m planning for.
An electric motor offers a huge amount of torque, Nick. Think diesel-electric locomotive. Direct diesel drive can’t touch them for starting torque (“tractive effort”). So, it’s possible to get some awesome performance from an electric drivetrain.
Problem is still energy storage. Somebody’s gonna crack that nut.
See Johnny Cab, Total Recall.
The USPS is due for replacement of their 600,000 (I think) mail delivery vans. I would hope they’re considering electric. I didn’t see this mentioned in the article or the comments, and this number of vehicles is significant by any measure.
They certainly will be considering them with Joe Biden in the White House now. The question is whether he can find them the money. USPS is a semi-autonomous government entity (hard to call them either a business OR an agency) with massive financial problems already.
Plus I am not sure that the USPS vans idle as much as actual delivery vans. It may change the value proposition somewhat.
On the other hand, it would certainly be an element of Green Manufacturing that might appeal to 60 Senators. It will save money on petroleum, be produced domestically, and cut emissions in a way that doesn’t burden auto buyers.
Perhaps an interim solution is to give the Rural delivery subcontractor contracts to people with electric vehicles. Or at least they get points towards winning the contract if they have an EV.
With the expansion of EV delivery vehicles, which are smaller, are we at the end of the age of the 18 wheeler? Is the 18 wheeler now too big and too dangerous?
Very good point IMO Petunia!
Other than the areas of Australia, and possibly other areas that are very sparsely populated, there really should not be the vast disparity between the semi articulated vehicles at approximately 40 tons and the 1.1 ton and up to 2 ton automobiles.
I suspect that others, as well as myself, have chosen to go back to a 2.5 ton or larger pick up truck just to compensate somewhat for that huge difference in mass.
Not that it will do that much good in a direct hit, but having been through a side hit from a monster RV in 2018, (in a full size pick up,) from which all folks emerged unscathed physically, the benefit of the additional mass of the pick up seems clear enough.
In terms of big, 18-wheelers are not it. You have to go to Australia and see the “road trains” to see Big. Google that term and look at the astounding pics. I saw a few of those road trains myself when they crossed the desert in the middle of the country. But they don’t enter cities.
So I don’t think highway trucks in the US are going to get any smaller. There is some pressure to allow them to be larger for highway use, as the equipment has gotten a lot better over the decades. But in tight urban environments, big trucks can be an issue.
Now, in the winter, these big trucks cross Donner Pass (I-80) which is the lifeline between Northern California and the rest of the US. Donner Pass is 6,000 feet, and in the winter, profuse amounts of snow and ice can turn the highway into a nightmare. As you can imagine, tractor-trailer rigs, despite the required chains, can jackknife on ice going downhill. And when it happens, it’s a big issue. Even if there are no injuries, it will close I-80 in that direction for hours. So even bigger trucks on this route would probably not be a good idea.
Are EVs really so hot that a company like GP (GreenPower) can pretend to be an EV manufacturer when all they do is buy them on Alibaba for under $70k, put their own logo on it, and then resell for $150k, as is being claimed: https://whitediamondresearch.com/wp-content/uploads/2020/12/GreenPower-Report.pdf. That sounds so ridiculous. I mean, GP has been trading around $30 for 6 weeks. Tesla valuations sound crazy, but this would be a whole different level of ludicrous.
I wonder what the price point will be for a new EV van compared to an ICE van when they become available to the public?
My 1997 Dodge cargo van that I converted into a camper is near end of life so I’ll be buying a new van to convert within the next two years.
I’ve been shopping cargo vans over the past 6 months and base prices appear to be about 36k for mid sized vans. I may buy a used ICE and wait until EVs become widely available to buy new.
Those EV vans are designed for urban delivery with a range that fits that job. I don’t think that they would make good cross-country vehicles for that reason. But after they ramp up production, automakers may develop longer-range options with higher price tags that might work for a camper. But you would have to be patient :-]
I find it very hard to believe battery power can haul much wait at all, hydrogen van or trucks maybe, battery power, nah, don’t think so, I think people are being taken for a ride, excuse the pun. How can a battery pull the weight when a normal EV needs 12 hour charge to travel just 150 miles, not possible. I bet come 2030 some excuse comes along on why EV’s went the way of the dodo, if they crack hydrogen then yes it could work.
Excuse the error, weight, I’m not a believer, maybe they can have warehouses at the top of a hill, doing it Nikola style lol
I guess Amazon ain’t doing deliveries at the moment then in Texas lol, the US is falling apart boyyy, a little cold & it’s all collapses, cowboys.
My bet would be on Ford dropping the ball. First off, it is hard to imagine that Ford’s best auto engineers and managers (with the most innovative ideas and approaches) are sitting in their Commercial Van division. Secondly, with Ford racing to convert to all-electric car production I doubt that the Commercial Van division’s needs rose very high on senior management’s priority list.
Lastly, Ford does things the Ford way. Innovative automobile design isn’t what they are known for. Innovative manufacturing has always been their forte… ever since the Model T. They have certainly had some great cars over the years but they tend to luck into those situations (Thunderbird, Bronco, etc.). They are kind of the Dell Computer of the automotive industry… whatever direction the industry is headed in… they head that way as well (and do it better than most of their peers)… but don’t expect them to lead the parade.
Wolf gets it right. City delivery has ALWAYS been the best use of electric vehicles. True in 1910, still true now. Tesla was a bizarre distraction, turning other manufacturers away from the proper use.
I saw a study that as measured by green house gases the best thing to do was to improve an old home instead of building a more energy efficient home or leaving the old home unchanged. Makes me wonder how that works out on an automobile. There must be some age that it’s better to throw it away and buy the latest and greatest. My guess is probably 15 years or so if you are replacing same size vehicle.
Battery vs Oil:
The electricity shortage in Texas amid the cold snap has sent spot electricity prices soaring so much that the surge in power prices equals a cost of $900 for charging a Tesla.
The typical full charge of a Tesla costs around $18 using a Level 1 or Level 2 charger at home, according to estimates from The Drive. This estimate is based on an average price of $0.14 per kWh of power.
However, the extreme winter weather this week has sent Texas spot electricity prices soaring, as the wind turbines froze in the ice storms and reduced the wind power generating capacity in the Lone Star State by half.
Spot electricity prices at the West hub have soared above the grid’s $9,000 per megawatt-hour cap, compared to a ‘normal’ price of $25 per megawatt-hour, FOX Business notes.
The Houston Chronicle reports ERCOT declined to give an estimate when the power will be restored to millions of customers. The grid operator warned controlled blackouts would continue as 40% of generation capacity remains offline.
Millions of Americans are without power Wednesday morning as winter storms and freezing temperatures batter the country. At least 20 people are dead due to weather-related incidents. As for Texas, the state with the most power outages, millions are still without power heading into the fourth day.
Up to 15 million Texans remain without heat and electricity as temperatures across the state are well below freezing. Another round of winter weather is battering parts of the state Wednesday morning, as many Texans have been without electricity since Sunday are desperately scrambling to find shelters. Weather-related deaths have already been reported as one of the nation’s wealthiest states can barely supply electricity to its residents.
oh my my, can not charge battery no electricity.
Mr. Wolf, bad ideas have bad consequences.
OVER the years, the phrase “unintended consequences” has come up with increasing frequency, as more and more wonderful-sounding ideas have led to disastrous results. By now, you might think that people with wonderful-sounding ideas would start to question what the consequences would turn out to be — and would devote as much time to discovering those consequences as to getting their ideas accepted and turned into laws and policies. But that seldom, if ever, happens.
It gets a LOT colder in other parts of the US, and wind turbines and other power plants are doing just fine. It’s just in Texas, folks haven’t prepared for the cold and haven’t installed deicing equipment on their wind turbines.
And much worse, the infrastructure at gas and coal power plants froze up, and those plants stopped generating power. That doesn’t happen in states that are prepared for the cold.
And at least one nuclear reactor shut down due to the cold (South Texas Nuclear Power Station) near Houston, knocking out power for lots of customers. A cold wave shutting down a nuclear power plant? Only in Texas.
Why don’t you start a statewide campaign to recall the utterly incompetent reckless governor that left the state totally unprepared for the cold (not sure if Texans can recall a governor, but if they could, that would a step in the right direction).
We recalled our governor over an electricity screw-up – the fallout from badly done privatization and Enron traders. If Californians can, Texans should be able to recall their governor as well. That would just be fair.
How have intellectuals managed to be so wrong, so often? By thinking that because they are knowledgeable— or even expert— within some narrow band out of the vast spectrum of human concerns, that makes them wise guides to the masses and to the rulers of the nation.
But the ignorance of Ph.D.s is still ignorance and high-IQ groupthink is still groupthink, which is the antithesis of real thinking.
A small number typical people wont be freezing in a stadium parking lot all night long.