Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Electric-van startups race for a 'golden ticket' order

Stock MarketsJun 03, 2021 08:16AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
4/4 © Reuters. FILE PHOTO: An exhaust pipe is seen as a vehicle sitting in traffic approaches the Blackwall Tunnel, in London, Britain, November 18, 2020. REUTERS/Simon Dawson/File Photo 2/4

By Nick Carey and Lisa Baertlein

LONDON (Reuters) - The future of a bevy of commercial electric van startups seeking investor capital through blank-check IPOs rests largely in the hands of a small group of big companies, above all UPS, FedEx (NYSE:FDX), DHL and Amazon (NASDAQ:AMZN).

With each carrier having tens of thousands of vehicles in its global fleet, an order from a package delivery giant can launch a startup on the road to manufacturing scale and profitability, and serve as a marketing tool to win orders from other big customers. 

"Everyone is looking for their golden ticket," said Steven Merkt, president of transportation solutions at sensor, connector and electronic component maker TE Connectivity Ltd (NYSE:TEL), which works with all the startups and provides technical feedback on designs. "If you don't have scale, you're going to get squeezed out pretty quick."

Desperate to find the next Tesla (NASDAQ:TSLA) Inc, investors have poured billions of dollars into electric vehicle startups, with mixed results.

But unlike Tesla, which enjoyed a headstart of years over traditional carmakers, commercial electric vehicle startups are racing against time as major manufacturers like Ford Motor (NYSE:F) Co race to bring products to market or others like Volkswagen AG (OTC:VWAGY) beef up their electric offerings.

Some startups already have their golden ticket. Arrival, which went public via a merger with a special purpose acquisition company (SPAC), has an order for up to 10,000 vans from UPS. Chanje has a 1,000 van order from FedEx in California, while Rivian has an order to build 100,000 vans for Amazon.

Others, like Xos, are close. Xos, which is going public via public through a merger with blank-check firm NextGen Acquisition Corp, is testing electric delivery trucks with both UPS and Amazon.

Some, like Canoo Inc have experienced turmoil as they finetune their strategies.

Thore Meurer, European senior fleet director at Deutsche Post AG (DE:DPWGn) unit DHL Express, said, "The window of opportunity is closing."

He said DHL has been talking to Britain's Arrival for years and will try out some of its test models. In the U.S. market, DHL has announced it will buy 89 electric vans from Lighting eMotors, which went public via a SPAC merger.

Meurer says DHL Express is also talking to two Asian startups about electric vans for Europe. But the company wants 14,000 electric vans in its European fleet by 2030 and is eager to get going. In April, DHL ordered 100 E-Ducato electric vans from Stellantis, a long-established manufacturer, to deliver packages in Europe.

"If another startup comes to market with a van two years from now, there will be no opportunity left for them," Meurer said. "By then, every big player will have an electric van on the market."

"CONFIDENCE GAP"

The Arrival electric test van decked out in UPS' distinct brown livery is popular with drivers at the package delivery giant's facility in London's Kentish Town district. During a demonstration of the van by Luke Wake, UPS vice president of maintenance and engineering, several drivers asked: "When can we drive one?"

The Arrival van is the culmination of many years work by UPS to incorporate electric vehicles into its fleet. The Kentish Town depot is still home to some old former diesel trucks that UPS converted into electric vehicles.

"We converted hundreds of our pre-existing vehicles to electric to see how they fit in," Wake says, "and to stimulate a market that didn't yet exist."

Working with a startup like Arrival has opened up a wealth of possibilities for UPS, including self-driving features on the van that can reduce costly accidents at depots, Wake said.

The van's battery pack will allow UPS to add automatic doors for drivers and LED lights in the back to help drivers find packages more quickly. Such features can save seconds per delivery - which add up as UPS delivers 2 billion packages annually.

The UPS order put Arrival on the map, and the startup emphasized that relationship when announcing last month it will develop an electric car for Uber (NYSE:UBER).

"You always have a confidence gap to bridge," said Carl-Magnus Norden, founder of Stockholm-based Volta Trucks, which is developing an electric truck for inner-city deliveries to businesses and has an order for 1,000 trucks from French refrigerated truck firm Petit Forestier. "So someone like Petit Forestier is important for us."

While most startups seek that golden ticket order, Electric Last Mile Inc (ELMS), which will go public via a merger with Forum Merger III Corp, a SPAC, is tapping U.S. dealer networks as a way to build scale and has pre-orders for 45,000 small electric vans that it will launch this year.

Chief Executive James Taylor said speed is paramount as giants like Ford focus on electric commercial vehicles. Ford sells the most commercial vehicles in the U.S. and European markets and will launch an electric Transit van in 2023.

ELMS is betting it can make it because so far no one else plans to produce a van as small in the United States.

"We have at least a short runway where we have no competition," Taylor said.

Electric-van startups race for a 'golden ticket' order
 

Related Articles

Wall Street pivots to value as Treasury yields rise
Wall Street pivots to value as Treasury yields rise By Reuters - Sep 27, 2021 7

By Stephen Culp NEW YORK (Reuters) - Wall Street began the last week of September and the quarter with investors backing value over growth on Monday as tech shares, hurt by rising...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
rizwan aslam
rizwan aslam Jun 05, 2021 1:21AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Nkla
Loki Kan
Loki Kan Jun 03, 2021 10:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
chanje vans have 150 Miles Range (before discount). seriously, this is not practical for delivery van...
Wayne Gillispie
Wayne Gillispie Jun 03, 2021 10:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
150 miles is plenty for my HVAC service company. How about getting the manufacturig jobs back in the USA. Oh no, that might cut into the CEO’s $20M salary.
William Smith
William Smith Jun 03, 2021 7:38AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Next Tesla? That's easy, it is NIO.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email