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Illustration: Eniola Odetunde/Axios

General Motors is launching a new business unit devoted to electrifying the goods delivery market and says package giant FedEx will be the first customer.

Why it matters: Big automakers and startups alike see a huge opportunity.

  • GM said it sees an $850 billion U.S. market for "parcel, food delivery and reverse logistics" by the mid-2020s.
  • "E-commerce already was on a tremendous growth trajectory and COVID has just taken that to the next level," Pam Fletcher, GM's vice president of global innovation, told reporters yesterday.

Driving the news: GM's new BrightDrop unit provides an "ecosystem of electric first-to-last-mile products, software and services" for delivery and logistics companies, the company said.

  • A key piece is a new electric delivery vehicle arriving late this year that GM says will have a range of 250 miles per charge.
  • There's also an "electric pallet" to help move goods over short distances, as well as software products to help customers in areas like ensuring the most efficient delivery routes.

The big picture: GM is plunging into an increasingly competitive market for electric delivery vans and other commercial vehicles with a plug.

  • Amazon has invested heavily in the EV startup Rivian and plans to have as many as 100,000 of its electric delivery vehicles on the roads by 2030.
  • Ford unveiled its E-Transit van last month as it hopes to defend its current market position in the commercial vehicle market.
  • UPS is among the deep-pocketed investors in the U.K.-based startup Arrival and plans to buy lots of its vans.
  • Workhorse Group, another EV startup, last week said the trucking and logistics company Pride Group Enterprises has ordered 6,320 of its delivery vehicles.
  • That's not even a full list!

The intrigue: GM is pursuing multiple strategies for deploying its much-touted Ultium battery propulsion system at a time of upheaval in the auto industry.

  • The new business-to-business line is coming as GM rolls out a bunch of vehicles for the private consumer market, too.

What they're saying: GM officials say the idea of BrightDrop is that the products and services together form a one-stop-shop for customers — providing everything from fleet maintenance to route optimization.

  • "That's the big 'a-ha' here," said Fletcher said, touting the notion of an ecosystem of hardware, software and services. "But we also have a great van," she added.

What's next: Fletcher said FedEx plans to take delivery of its first 500 vans by the end of this year. She also said GM has lined up commitments from other customers she did not name.

Go deeper

Jan 29, 2021 - Podcasts

When investing goes viral

You've likely heard the headlines this week about the stock market mania around GameStop. But this isn't just about the stock market. It's a kind of populist uprising borne of the Internet.

  • Plus, what’s behind GM’s big electric vehicle announcement.
  • And, the new Wild West is in outer space.

Toyota to build $1.3 billion U.S. battery plant in North Carolina

The all-electric Toyota bZ4X, the company's first battery-electric vehicle, at the Los Angeles Auto Show in Los Angeles, California on Nov. 17. Photo: Frederic J. Brown/AFP via Getty Images

Toyota announced Monday it's investing $1.3 billion to construct an electric vehicle battery "megasite" near Greensboro, North Carolina, set to open in 2025.

Why it matters: Toyota's Prius hybrid won environmental plaudits when it launched in 1997, but it has since lost ground to electric vehicle world leader Tesla, per Axios' Joann Muller. This battery plant will be the first to produce automotive batteries for Toyota in North America.

3 hours ago - Politics & Policy

Congress hunts for shortcut to pass defense funding, debt limit combo

Senate Majority Leader Chuck Schumer returned to his office Monday. Photo: Anna Moneymaker/Getty Images

The scramble in Congress to pass the National Defense Authorization Act is being complicated by an effort to tie it to a needed hike in the federal debt limit.

Why it matters: The House and Senate are rapidly coming up against a series of deadlines they must address before the end of the year — or risk disrupting crucial military funding and upending the economy. Congressional leaders are now hoping they can knock out both "must-pass" priorities in one, complex swoop.

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