GM BrightDrop Adds Walmart as EV Customer, Expanding Reach

BrightDrop Secures Major Walmart Order for Electric Delivery Vans

BrightDrop, the commercial electric vehicle division of General Motors, has announced a significant agreement with Walmart. The retail giant has placed a reservation for 5,000 electric delivery vans, aiming to achieve a zero-emissions logistics network by the year 2040, as revealed at CES on Wednesday.

Expanding Partnerships and Increased Demand

Furthermore, current client FedEx has secured priority production allocation for 2,000 vans over the coming years. This represents an increase from their initial order of 500 electric vehicles, which was originally announced at last year’s CES event.

Walmart anticipates receiving a mix of EV600 models, currently being manufactured, and the smaller EV410 vans, slated for availability in late 2023. Deliveries are expected to commence next year.

Boosting Last-Mile Delivery Capabilities

These vehicles will supplement Walmart’s existing fleet utilized for its InHome delivery service. The InHome service is projected to expand from approximately 6 million households presently to 30 million U.S. homes by the close of 2022. The addition will also strengthen Walmart’s overall last-mile delivery operations.

Walmart will also integrate BrightDrop EVs into its GoLocal white-label delivery service, which caters to external parties.

Growing Customer Base and Reservations

Walmart joins prominent customers such as Merchants Fleet and Verizon in supporting BrightDrop’s efforts to electrify their delivery fleets. BrightDrop currently holds over 25,000 vehicle reservations in total, excluding the number of vehicles ordered by Verizon.

FedEx, having received its initial five vans in Inglewood, California, last month, is evaluating the potential addition of up to 20,000 more EVs to its order, contingent upon a final purchase agreement.

Scaling Production to Meet Rising Demand

As more companies prioritize the decarbonization of their transportation to meet emissions targets, the demand for BrightDrop’s vehicles is expected to continue its upward trajectory. The key question remains whether the company can effectively scale production from its current levels to tens of thousands of vehicles within the next few years.

“We’ve structured BrightDrop to combine the advantages of a technology startup with the manufacturing capabilities of General Motors,” explained Travis Katz, President and CEO of BrightDrop, in an interview with TechCrunch.

“This allows us to be agile, innovative, and rapidly iterate, while leveraging GM’s expertise in large-scale manufacturing. With the opening of our Canadian factory next year, we will significantly increase vehicle production to meet the growing demand, which is truly remarkable.”

Manufacturing and Battery Supply

BrightDrop’s batteries will be sourced from GM’s Ultium plant located in Lordstown, Ohio. The company plans to achieve large-scale vehicle production at a manufacturing facility in Ontario, Canada, commencing in the fourth quarter of this year.

Until the Canadian plant is operational, BrightDrop is utilizing a low-volume production facility in Michigan, operated by robotics supplier Kuka AG, to facilitate immediate market entry.

Early Deliveries and Pilot Programs

“The first vehicles for FedEx were delivered last month and are currently in service, delivering packages,” Katz stated during a press briefing on Tuesday. “We will continue to deliver more vehicles to FedEx on an ongoing basis, and you can expect to see them on the roads, particularly in the Los Angeles area, delivering packages with zero emissions in the coming months.”

FedEx is also expanding its testing of the BrightDrop EP1 electrified container to ten markets this year. A recent pilot program in New York City demonstrated a 15% increase in package deliveries per hour, a reduction in on-road vehicles, and a halving of curbside dwell time.

A prior pilot program in Toronto, announced in January 2021, resulted in a 25% increase in daily package deliveries.

FedEx’s Electrification Strategy

“By 2025, we aim for 50% of all FedEx Express global pickup and delivery vehicle purchases to be electric, increasing to 100% of all new purchases by 2030,” said Richard Smith, Regional President of the Americas and EVP at FedEx Express, on Tuesday.

“We employ a ‘Goldilocks’ strategy for vehicle sizing, utilizing small, medium, and large vehicles tailored to specific operational needs. BrightDrop’s current EV portfolio, including the EV410 and EV600, addresses the small and medium-sized requirements for FedEx. This represents approximately two-thirds of our total pickup and delivery EV demand, and we are hopeful that BrightDrop can fulfill this need, as the vehicles are exceptional.”

“We have also discussed with BrightDrop the remaining one-third, which would necessitate a larger vehicle with a cargo capacity exceeding 1,000 cubic feet, and we are eager to collaborate with them on that as well.”

Future Collaboration and Deployment

While FedEx’s vehicles are already operational in Los Angeles, Walmart’s deployment will depend on the company’s testing locations and existing charging infrastructure, according to Katz.

Walmart has also partnered with Cruise, another GM subsidiary specializing in autonomous vehicles, to initiate grocery delivery testing in Arizona.

“The shared parentage of these two companies unlocks significant potential and opportunities,” Katz noted. “We anticipate sharing more details about this collaboration in the future.”