Jan 31, 2020 - Energy & Environment

Corporate clients could provide a lower-cost path to electric vehicles

Illustration: Sarah Grillo/Axios

Carmakers are compelled to introduce electric vehicles to meet rising emissions standards, but the transition is expensive and fraught with risk, and consumers aren't yet on board.

The state of play: There's another potentially faster and cheaper path to electric vehicle adoption: electric delivery fleets. They could catch on faster, especially with new approaches to design and production, and provide a large-scale proof of concept for consumers.

Driving the news: This week a 5-year-old startup named Arrival emerged with a $440 million order in hand for 10,000 electric UPS trucks.

  • Its business model is radically less expensive — and lower-risk.
  • The U.K.-based company is focused only on commercial vehicles, which often have fixed routes and can be charged at a central location.
  • Priced about the same as a diesel truck, they're cheaper to operate because they run on electrons not fuel, are made of lightweight composites and are built on a customizable, modular EV skateboard.
  • And they would be built in inexpensive micro-factories that Arrival says can be up and running in just six months.

Between the lines: Arrival is putting much less capital at risk to produce small batches of purpose-built EVs for customers like UPS, says Mike Ableson, the former GM executive who is now Arrival's North American chief.

  • 10,000 customized trucks are difficult for a legacy auto manufacturer to produce because their business model depends on economies of scale for 200,000 vehicles or more.
  • "Our whole system is set up to deliver bespoke vehicles in smaller volumes," said Ableson. "It's the perfect match between what UPS needs and what we can develop."
  • UPS said it is a minority investor in the company, two weeks after Hyundai and Kia invested $110 million for a 3.3% stake. At the time, JPMorgan valued Arrival at $3.3 billion.
  • Prior to that deal, it had been mostly self-funded by founder Denis Sverdlov, a Russian-born entrepreneur now living in London.

The other side: GM just committed billions of dollars to mass-produce electric pickups, SUVs and a shared robo-taxi at a plant in Detroit that it had planned to mothball.

  • The $2.2 billion factory overhaul doesn't include another $800 million GM will invest in supplier equipment to support EV production or the $2.3 billion a GM joint venture is investing in a new battery cell manufacturing plant in Ohio.
  • GM president Mark Reuss acknowledges there's still buyer reluctance. "The customer will tell us" when they're ready to buy EVs.

My thought bubble: Both GM and Arrival are placing big bets on electrification, albeit at a different scale.

  • But while GM has to wait for consumers to come around to EVs and robotaxis, there's a ready-made market for commercial EVs that's already getting a corporate boost.

Go deeper: UPS to buy 10,000 electric trucks from U.K. startup Arrival

Go deeper

In photos: We've seen images like the protests in Minneapolis before

Photo: Kerem Yucel/AFP/MPI/Getty Images

The photos of protests around the country following the death of George Floyd during an encounter with Minneapolis police are hauntingly familiar. We’ve seen them many times before, going back decades.

Why it matters: "What is also unmistakable in the bitter protests in Minneapolis and around the country is the sense that the state is either complicit or incapable of effecting substantive change," Keeanga-Yamahtta Taylor, an assistant professor of African-American studies at Princeton University writes in the New York Times. The images that follow make all too clear how little has changed since the modern Civil Rights Movement began in the 1950s.

Updated 14 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 11 a.m. ET: 5,968,693— Total deaths: 365,796 — Total recoveries — 2,520,587Map.
  2. U.S.: Total confirmed cases as of 11 a.m. ET: 1,749,846 — Total deaths: 102,900 — Total recoveries: 406,446 — Total tested: 16,099,515Map.
  3. Economy: The future of mobility in the post-pandemic worldGeorge Floyd's killing and economic calamity are both part of America's unfinished business.
  4. Supreme Court: Chief Justice Roberts sides with liberals in denying challenge to California's pandemic worship rules.
  5. Public health: Hydroxychloroquine prescription fills exploded in March.
  6. 2020: North Carolina asks RNC if convention will honor Trump's wish for no masks or social distancing.
  7. Business: Fed chair Powell says coronavirus is "great increaser" of income inequality.

The aftermath of George Floyd's death: Everything you need to know

A mural outside Cup Foods in Minneapolis, near where George Floyd was killed in an encouner with police. Photo: Steel Brooks/Anadolu Agency via Getty Images

Former Minneapolis police officer Derek Chauvin is in jail under $500,000 bail on charges of third-degree murder and manslaughter after a video of him kneeling on George Floyd's neck for more than eight minutes and Floyd's death catapulted the country's major cities into a state of protest.

The big picture: Floyd's fatal run-in with police is the latest reminder of the disparities between black and white communities in the U.S. and comes as African Americans grapple with higher death rates from the coronavirus and higher unemployment from trying to stem its spread.