THERE ARE APPROXIMATELY 90 million commercial freight vehicles on the roads of the world’s major economies and almost all of them are diesel powered. In 2018, according to figures from research firm IDTechEx, these trucks produced nearly 2,000 tonnes of CO2, or about five percent of global CO2 emissions. The most common type of van on the road is the middle class, which includes the hugely popular Ford Transit and E-series vans (which have racked up a total of 16 million in sales) and the Volkswagen Transporter (12 million). .
The pandemic has accelerated a series of trends that will only increase those numbers, according to William Grimsey, former managing director of Wickes and Iceland, and author of The Grimsey Review on Main Street. He predicts that the main street will turn into pedestrian entertainment and social spaces, while shopping will focus online. âBy 2050 there will be no more cars inside cities and there will be a move away from major malls out of the city, so we should start planning now,â he says. âWe won’t need parking lots, but we will need mobility and delivery centers. Delivery vans and buses will become the heart of our economy. “
Arrival is building electric vehicles to meet the needs of this new economy. It aims to reinvent the bus and delivery van on a modular, customizable platform that it says will be lighter and cheaper than existing models, with a standard price similar to fossil fuel equivalents. With a combination of new materials and cloud-based monitoring software to reduce operation and maintenance costs, it aims to destroy the economic case for buying a diesel utility vehicle. So far, the company has racked up $ 1.2bn (around Â£ 870m) in orders, with the goal of building 10,000 vehicles in 2021, its first year of production. UPS begins road testing of its two-ton van this summer, while First Bus – one of the UK’s largest bus companies – is already testing its single-decker electric bus on some routes.
âVans are the fastest growing category in the automotive industry in general, and the easiest to understand,â says Arriving founder Denis Sverdlov. âPeople choose passenger cars on a lot of different criteria – make, interior, maintenance. But commercial vehicles, they buy based on function and price. It is a very rational decision. For a startup like us, instead of trying to convince the millions of people who rarely buy new cars that your vehicle is the best, go to commercial vehicles and solve their problems, and you have a market.
Most manufacturers, including Tesla, Daimler, Volkswagen and Volvo, are also working on the production of electric utility vehicles. But Ford’s E-Transit, launched in 2022, will sell for around Â£ 36,000 excluding VAT. The current price of the diesel version is Â£ 20,950 excluding VAT.
âCommercial vehicle buyers are very conservative and they’re all low-margin companies, so they’re counting money,â Sverdlov says. âOur value proposition for them is that you don’t have to pay more per vehicle to be electric, and you get 50% savings on your personal costs. The inflection point begins when the economy begins to operate.
To bring down the costs of an electric vehicle, the first thing Arrival needs to do, he says, is to break the rule of economies of scale. âOtherwise, you have to go into investing in factories and wait until you start producing 300,000 vehicles to become profitable, and we couldn’t afford to do that. “
But economies of scale have been at the heart of how most companies have been building vehicles for a hundred years or so – think Henry Ford’s assembly line. The traditional way to build electric vehicles, says David Wyatt, electric vehicle analyst for IDTechEx, is to use the same production lines and put electric motors and batteries in an existing chassis. “It just doesn’t optimize the strengths of an electric vehicle, but the bosses of traditional car manufacturers are happier working on combustion engines and they still see improved combustion engines as the solution,” he said.