Updated Dec. 6 at 12:40 p.m. EDT.
Despite the rollout of a $40,000 tax credit for businesses looking to purchase electric vehicles — courtesy of the implementation of the Inflation Reduction Act in August — and a steady push for fleet electrification, the EV industry hasn’t yet captured that lightning in a bottle.
It’ll take some time for most small and midsize transportation companies to enter the EV playing field because of the costs and logistics of electrifying an entire fleet.
But for the bigger firms, the game is well underway. Ford Motor Co. (NYSE: F) is one of the biggest, and the automaker is wasting no time getting into the mix.
Ford on Monday announced that Ford Pro, its distribution business founded in May 2021, signed a memorandum of understanding with Deutsche Post’s DHL Group (OCTUS: DPSGY) to deliver more than 2,000 electric delivery vans to the logistics provider by 2023.
The agreement is part of DHL’s approximately $7.4 billion investment to achieve net-zero emissions in its logistics network by electrifying 60% of its fleet by the end of the decade. The company currently has about 27,000 electric vans on the road through partnerships with other EV makers like Fiat and Lightning eMotors.
For Ford, it’s a step toward meeting ambitious sustainability targets — namely, having zero-emissions vehicles make up 100% of all vehicle sales by 2035.
Some of the vehicles being supplied under the new agreement, which include a batch of Ford’s new E-Transit model, have already been delivered and are making express deliveries for DHL in Europe and the Americas. It has a payload of about 4,400 pounds and a 126-mile range when fully charged.
In addition, the companies on Tuesday announced that DHL Express will add 45 E-Transit vans to its fleet in Palo Alto, Cal. All of them are expected to be in operation before year’s end, and DHL plans to order 180 more electric vans over the next two years.
“This agreement is a major step towards millions of deliveries being completed by electrified vehicles around the world,” said Hans Schep, general manager of Ford Pro Europe. “E-Transit is the top-selling commercial EV in North America and since June is also the best-seller in its segment in Europe, meaning the all-electric 2-tonne van is already making big strides to support this ambition.”
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Interestingly, the agreement also grants DHL access to Ford Pro’s suite of fleet operating solutions, a component the carrier’s past partnerships have not included. Those features include the automaker’s E-Telematics software for fleet connectivity, charging stations and other components designed to optimize efficiency.
Some observers see this as a bigger deal than the 2,000 new vehicles. Ultimately, they’ll make up a small portion of DHL’s electric fleet — much less its entire fleet. But the telematics and charging services are compatible with non-Ford vehicles too, which will allow the carrier to provide value fleetwide.
And for Ford, a couple thousand deliveries is a drop in the bucket considering the firm supplies millions of vehicles every year. The fleet management offering, though, could provide a path for Ford to increase its revenue from services, something many automakers are looking to achieve.
“Businesses going electric know that to be successful they must implement a strong charging and software optimization plan,” Ford Pro CEO Ted Cannis told Barron’s. “We are seeing more and more interest from customers in our one-stop-shop because we can provide industry-leading vehicles plus end-to-end charging and remote software solutions that work with Ford and non-Ford vehicles.”
In a news release, DHL noted that the memorandum opens the door for future collaboration between the two companies, saying that the agreement “will potentially allow both companies to explore the co-development of future products as well as new digital and charging solutions.”
Additionally, Ford Pro plans to give DHL access to test vehicles and monitoring services.
Other large firms have also been quick to jump into the electric delivery van space. Amazon (NASDAQ: AMAZON), for example, introduced EVs from Rivian (NASDAQ: RIVN) in July, while FedEx (NYSE: FDX) and Walmart (NYSE: WMT) have each made sizable investments of their own.
Click for more Modern Shipper articles by Jack Daleo.
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