By Paul A. Eisenstein

FedEx has already placed “a large order” for the electric trucks, after a test showed they resulted in a 25 percent increase in productivity, GM said.

General Motors on Tuesday unveiled a new all-electric subsidiary, BrightDrop, that it hopes will speed up the shipping and delivery process.

General Motors wants to electrify the delivery side of e-commerce, launching a new subsidiary, BrightDrop, that will deliver “an ecosystem” of products and services to speed up the shipping and delivery process.

Set to launch later this year, BrightDrop will offer all-electric delivery vans, as well as a droid-like cargo palette capable of rolling around under its own power.

“BrightDrop offers a smarter way to deliver goods and services,” GM Chairman and CEO Mary Barra said Tuesday, ahead of the formal debut of the new company at the CES consumer electronics trade show. “We are building on our significant expertise in electrification, mobility applications, telematics and fleet management, with a new one-stop-shop solution for commercial customers to move goods in a better, more sustainable way.”

The new GM subsidiary has already received a large order from Federal Express, which tested the technology and found a 25 percent increase in productivity, according to Pam Fletcher, the Detroit automaker’s head of global innovation. 

E-commerce will likely grow to 100 million packages a day by 2023, “three years earlier than originally expected,” Richard Smith, FedEx’s regional president said Tuesday.

Bright Drop has received numerous letters of intent from other shipping and delivery services, Fletcher said.

With BrightDrop, GM will go into competition with several other manufacturers hoping to electrify the delivery business, including Daimler and Rivian, the suburban Detroit startup backed by Ford and Amazon. The online retail giant has ordered 100,000 all-electric Rivian delivery trucks for the U.S., and thousands more from Daimler for Europe.

About the size of the standard FedEx truck of today, the BrightDrop EV600 will use an all-electric platform similar to the one that will underpin the new GMC Hummer pickup that GM plans to launch later this year. It will be powered by the new Ultium batteries the automaker will produce at a new plant in Ohio that is part of a joint venture with South Korea’s LG Chem.

The van will have a range of about 250 miles per charge, according to Fletcher, more than enough to handle the typical “last mile” delivery route, based on industry data showing such delivery trucks typically log fewer than 50 miles a day.

BrightDrop will launch with the EV600 but expects to introduce a range of electric cargo vehicles going forward, Fletcher said. BrightDrop could have access to autonomous technology developed by another new GM subsidiary, San Francisco-based Cruise. That company recently received approval to begin public testing of fully driverless ride-sharing vehicles.

At its debut, the other key product will be the EP1. While not quite the chatty Star Wars droid, this cargo palette will be self-propelled, using electric motors in each of its wheels. That means it will be able to roll along with a human worker, minimizing strain and reducing the risk of injuries.

Both the EP1 and EV600 will use cloud-connected technology so they can be monitored constantly. New BrightDrop software will let a customer know where they are at any time and what goods are being carried. That should reduce errors, as well as theft, according to BrightDrop.

The utility truck market is expected to almost double to more than $90 billion annually by 2026, according to Forbes Business Insight, up from around $47 billion in 2018, with cargo and delivery vehicles of various sizes set to make up a significant share of that.

Demand is growing for all-electric models, according to Alf Poor, CEO of Ideanomics.

That adoption is expected to happen rather rapidly, Poor and other experts believe. One reason is the pressure fleet operators are facing under new regulations. California, for example, has laid out a plan for phasing out the use of internal combustion power in all trucking segments over the coming decade.

But there’s another motivating factor. Until recently, electric drive technology was considered too expensive or limited in range, but upgrades have made it much more appealing. Despite a higher up-front price tag, operating costs are a fraction of conventional vehicles, said Poor, so electric trucks “just make sense because there’s almost an immediate return on investment.”