GM turns to supplier to build initial EV vans while it readies plant in Canada -sources

Electric Last Mile Solutions

12/07/2021 16:02

By Ben Klayman
    DETROIT, July 12 (Reuters) - General Motors Co  GM.N  is
turning to a German parts supplier to make the initial, small
production run of its new electric commercial van in a move to
get the vehicle quickly into the hands of customer Fedex FDX.N ,
three people familiar with the matter said.
    The decision to use Kuka AG  KU2G.DE  to build the EV600
vans is not typical in the industry. But it shows the No. 1 U.S.
automaker's desire to stick to a plan to roll out the vehicle in
late 2021, according to two people who asked not to be
identified and a union official at GM's CAMI assembly plant in
Ingersoll, Ontario, that will ultimately build the van. 
    GM announced the BrightDrop commercial van business in
January.  urn:newsml:reuters.com:*:nL1N2JN1DW         
    "They just want to get them going," Mike Van Boekel,
chairman of Unifor Local 88, which represents about 1,500 hourly
workers at the Canadian plant, said of the decision to use Kuka.
"The orders are coming through so strong." 
    GM did not immediately comment, and Kuka declined to
comment.    
    GM said in June it would end production of the Chevrolet
Equinox SUV at CAMI next April and begin production of the
electric van there in November 2022 before increasing the number
of shifts building it to two in 2023 and three in 2024. It also
said it was "working with supplier partners" to meet its
timetable.
    Kuka's production run will number fewer than 500 hand-built
models and begin in late October at the supplier's plant in
Livonia, Michigan, according to the sources and GM documents. 
    "It is unusual. They want to show they can do this quickly,"
said Sam Fiorani, vice president of global vehicle forecasting
at AutoForecast Solutions. "However, they don't have the plant
(in Canada) ready because they're still building Equinoxes."    
    GM previously said it would invest $800 million in the
Canadian plant for the large van's production.  urn:newsml:reuters.com:*:nL4N2JR03M     
 
    The electric commercial van business is attractive because
governments in China and Europe are pushing companies to slash
CO2 emissions, and companies like FedEx, Amazon AMZN.O  and
United Parcel Service  UPS.N  have pledged to shift their large
delivery fleets to EVs. 
    In addition, EV leader Tesla  TSLA.O  has not cracked the
market, and it has become a race for companies like GM, Ford
Motor Co F.N , Stellantis STLA.MI , Daimler DAIGn.DE  and
startups Rivian, Arrival and Electric Last Mile
Solutions ELMS.O  to introduce their EV delivery vans.
    GM has estimated the U.S. market for parcel and food
delivery vehicles will climb to more than $850 billion by 2025. 
    In January, GM's shares surged after Chief Executive Mary
Barra announced the company's entry to the growing electric
delivery vehicle business, with plans to begin shipping the
first BrightDrop vans to FedEx later this year. GM said then the
first 500 units would be shipped to FedEx by year end, with
deliveries to other customers starting in early 2022. 
    GM's EV600 will use a version of its own Ultium battery
system that will power many of its future EVs. It will have a
driving range of 250 miles (400 km) between charges.
    Last month, GM boosted its spending on electric and
autonomous vehicles by about 30% to $35 billion and accelerated 
plans for two U.S. battery cell plants.  urn:newsml:reuters.com:*:nL2N2NY17Q  

 (Reporting by Ben Klayman in Detroit; Editing by Dan Grebler)
 ((benjamin.klayman@thomsonreuters.com; 313-600-2277; Reuters
Messaging: benjamin.klayman.thomsonreuters.com@reuters.net))