My blog on Oct.31, 2010 dealt with forecasting the demand for electric cars. Who doesn’t love the idea of electric vehicles (EVs)? But as we wrote: “everybody feels that everybody else should be driving environmentally-friendly vehicles”. With gas hovering under $3/ gallon, does it really pay financially for you or me to invest in a $40,000 Chevy Volt?
Maybe not, but logistics managers at such firms as Staples, Frito-Lay, FedEx, and AT&T have come to find that electric trucks make a lot of sense for their commercial delivery fleets. As The Wall Street Journal (Dec.8,2010) writes:” electric delivery trucks…make more sense in many ways than electric cars”. That’s because delivery trucks generally drive 
short, defined routes each day–better suited to the limits in range of EVs. And EVs have lower maintenance costs, a big concern to companies with large fleets.
“We’re a business here”, says Staples’ VP-Fleet Services. “They have to justify themselves”. Staples just bought 41 trucks from Smith Electric Vehicles, in Kansas City, and plans to double the order. The trucks have a top speed of 50 mph, and can carry 16,000 lbs. They cost about $90,000, which is $30,000 more than a diesel, but Staples expects to recover that expense in 3.3 years. The EVs have no transmissions; need no fluids, filters, or belts (which cost around $2,700/year); have “regenerative” brakes that last 4-5 years, vs. 1-2 on regular trucks; save $700/year because there is no exhaust system to maintain; and cut fuel costs by $6,500/year. It all adds up to $60,000 savings over the 10 year life of a truck.
Frito-Lay, with an order for 176 Smith trucks, plans to convert 2,000 more delivery vehicles to EVs. Similarly, FedEx, which has 19 EVs in London, Paris, and LA, expects a proliferation of electric trucks. Its not a “good deed for the sake of a good deed. There is a great return on that investment”, adds a Frito-Lay OM exec.
Discussion questions:
1. Do you think use of electric trucks will spread faster than electric cars? Why?
2. What limits the proliferation of electric trucks?
3. Make the case for the USPS to switch to an EV fleet.
I think the WSJ, FedEx, and the others mentioned are right on target converting to EV delivery vehicles. Smith/Tanfield EV is not the best play, being Tanfield Group in the UK appears on a rocky road. Ford terminated their Smith/Tanfield partnership for the Ford Transent Connect electric truck program. Smith said some BS about focusing on their efforts on large EV’s. Seems Ford was really looking for a better partner, which they found. Ford dropped Smith for Azure Dynamics (AZDDF), based out of the Detriot area, in Ford’s sandbox. AZDDF won the XPrize in DC for their EV drive trains, and is building the electric drives on the Ford trucks. No brainer Ford will be the major here, and Smith/Tanfield is a rocky on a rocky road. Can’t see overseas, penny-stock company like Smith/Tanfield, competing head to head with Ford, after loosing that partnership for these new EV vehicles.
Today’s Businessweek (Jan.20,2011) just published an article that provides a few more details about electric trucks. You can view it at:
http://www.businessweek.com/technology/content/jan2011/tc20110120_063762.htm?chan=technology_special+report+-+focus+on+green+business_special+report+-+focus+on+green+business