American auto giant Ford took the wraps off an electric vehicle Thursday morning that launches the company squarely into the growing movement to electrify fleets and last-mile delivery in cities.
The E-Transit cargo van is an electric version of its already-popular cargo van — Ford sells 150,000 of the model per year. The E-Transit van will be available starting in late 2021, will cost "less than $45,000" and will have a range of 126 miles. It'll also have a feature that can turn the van's battery into an onboard generator that can power tools such as belt sanders.
While the range might sound downright weak — in comparison, Ford's Mustang Mach-E is designed with a 300-mile battery range — Ford Global Director of Electrification Mark Kaufman said in an interview that Ford designed the vehicle based on real-world data collected from customers about the average fleet route in cities. "The average range for Transit customers today is 74 miles. We worked with 30 million miles of fleet telematics data to find where the best balance point is," Kaufman said.
Ford's big reveal highlights the growing market around electrifying commercial trucks and buses in cities and, in particular, the emerging interest around electric last-mile delivery. Delivery companies such as Amazon, FedEx and UPS are rapidly electrifying last-mile delivery vans in a bid to reduce carbon emissions, maintain strong sustainability-focused brands and save money on fuel costs.
While some electric commercial vehicles, such as long haul trucks, are years away from being cost-effective to electrify, delivery vans are at the cusp and already can save fleets money on diesel fuel. When the cost of vehicles gets low enough — like the $45,000 price tag for the E-Transit — entire segments of commercial vehicles could tip to electric, especially in states such as California that offer both incentives and mandates for commercial zero-emission vehicles. In comparison, the price of the internal combustion version of Ford's Transit is around $36,000.
The biggest barrier to electric delivery vans in the U.S. actually has been the dragging feet of America's big automakers. For years startups such as Chanje, Workhorse, Rivian and Lightning eMotors were the only players making electric vans and trucks at small volumes. Late last year, Amazon kickstarted Rivian's production with an order for 100,000 electric delivery vehicles and an investment in the company.
Delivery providers are starting to be pushed by some corporate customers, too. IKEA set a goal to have all of its products shipped with electric vehicles for last-mile delivery by 2025, starting in five cities by the end of 2020. IKEA doesn't own its own fleet but uses 10,000 vehicles globally owned by delivery partners such as DHL and UPS.
Ford says consumers are beginning to care more about the environmental footprint of the vehicles delivering the growing number of packages that land on their doorsteps. Ford's Kaufman wrote in a post on Medium that 60 percent of Americans and 68 percent of Brits care about the environmental impact of vehicles used by delivery services, according to a Ford-conducted survey. "That’s a 12 percent increase in the U.S. alone since earlier in the year, when we conducted an initial survey," wrote Kaufman.
Ford's E-Transit van essentially will be the first electric commercial van available from one of the large American OEMs. Germany's Mercedes-Benz has an electric version of its Sprinter van, which Amazon has placed orders for.
Researchers at Bloomberg New Energy Finance released a report earlier this year that called delivery vans "the next segment to cross the tipping point" for electrification. Ford's E-Transit launch will continue to help tip the sector. The E-Transit isn't just meant for delivery customers but has eight configurations meant to be used by sectors such as utilities and electricians.
To get the E-Transit into customers' hands starting in late 2021, Ford said it's investing $100 million into its plant in Kansas City, which is already making the diesel-powered Transit. Ford is also creating 150 new jobs to begin production of the E-Transit.
Across its divisions, Ford is investing $11.5 billion into electrifying vehicles through 2022, including its Mustang Mach-E and an electric version of its Ford F-150, America's most popular pick-up truck.