The image illuminates commercial electric vehicles with a growing demand from delivery customers

BANBURY, England (Reuters) – Electric van and bus maker Arrival is battling the global pandemic like other UK companies, but not for lack of business.

The arrival is between four and five times the number of queries from potential customers compared to a year ago, as the growth of e-commerce during the pandemic and changes in emissions regulations have fueled demand, he said. President Avinash Rugoobur.

“All over the world, the mindset has changed and people understand that the future is electric,” Rugoobur said. “So now it’s about how we get there?”

At Arrival’s R&D center in Banbury, north-west London, executives from a major British retail group were patiently waiting to tour the startup’s test van, which would begin production in 2022.

Rising interest in Arrival followed Britain’s request in November to ban new fossil fuel vehicles by 2030, and was also helped by the new interest of new US President Joe Biden in ‘electrification.

The tightening of CO2 emissions targets in Europe and China have been combined with improved battery technology to provide greater scope at lower costs, giving commercial electric vehicles (EVs) their time in the alone after years of waiting.

“People are talking about a turning point for commercial electric vehicles, but I think we’re already there,” said Luke Wake, vice president of maintenance and engineering at United Parcel Service Inc, which has ordered up to 10,000 vans from Arrival and owns a stake in the beginning.

The interest of feverish investors in finding the next Tesla Inc and bringing them to market through special purpose acquisition companies (SPAC) has included EV commercial startups like Canoo Inc and Arrival, which will be made public later this month. through a merger with CIIG Merger Corp.

In addition, the coronavirus pandemic has increased the need for vans to deliver goods to consumers at home.

Startups like Rivian, Volta Trucks and traditional manufacturers Daimler AG, Ford Motor Co. and General Motors Co. have models for sale or in operation. Rivian will begin manufacturing vans for Amazon.com Inc. later this year.

Because batteries are still expensive, commercial electric vehicles have a higher sticker price than diesel or gasoline equivalents, which is a tough sell-off for many cost-conscious businesses.

But thanks to lightweight materials and adapting battery packs to customer needs, Arrival’s Rugoobur said it is about to change: in some ranges its vans will cost less than a diesel equivalent.

“If Arrival can manufacture these vehicles at the equivalent price of a diesel van, the total cost of ownership is so favorable to them that it becomes a competitive advantage,” said David Wyatt, an analyst at research firm IDTechEx.

“IT’S GOING TO PASS FAST”

Fleet operators are also facing increasing control over the sustainability of retail customers, who feel the same pressure from consumers, said Rob Fowler, chief executive of Volta Trucks.

“If we look at the logistics operators, they are at the center and are pressured on all sides,” he said.

Volta Trucks, based in Stockholm, which also operates in the UK, is developing a 16-ton electric truck, which will be produced in 2022, for urban freight distribution routes. The batteries are heavy, so the body of the Volta Zero is made up of a light composite compound and its shorter routes around the city require fewer batteries.

Volta Trucks has a $ 260 million order book and its largest public order to date is for 1,000 trucks from French refrigerated truck firm Petit Forestier.

The higher initial costs, the challenges associated with the simultaneous loading of several vehicles and the lack of available models mean that there are still relatively few commercial vehicles in service.

But Simon Webber, a Schroders portfolio manager who has about $ 650 billion in assets under management, said more electric vehicles will hit the market and falling battery costs will change that.

“It’s going to happen fast,” Webber said. “Because the average life of these vehicles is shorter, they turn faster than passenger vehicles, they will electrify faster.”

Leading energy consultant Wood Mackenzie said the commercial electric vehicle market will move from a low base today to global sales of 3 million units in 2025 and 9 million in 2030, led by buses and light trucks.

Based on conversations with manufacturers, “we see commercial electric vehicles coming in big,” said Tom Jensen, CEO of battery maker FREYR, which will be made public through a merger with a SPAC, Alussa Energy Acquisition Corp.

“ALL MORE EXPENSIVE”

Electric vehicle manufacturers say that while commercial electric vehicles have a higher sticker price, over their lifetime their “total cost of ownership” is lower, as electricity is cheaper than diesel and electric motors require less frequent repairs due to having fewer moving parts.

The British group of package delivery firm DPD, a La Poste unit in France, was a first-time adopter and its 732 electric vehicles account for almost 10% of its fleet, mostly Nissan Motor e-NV200 vans. Co. Ltd. o eTGE of Volkswagen Unit AG MAN.

In 2020, the pandemic brought DPD volumes to a daily record of 2 million packages during the high holiday season and the company will buy 500 more electric trucks by 2021.

Olly Craughan, head of corporate social responsibility at DPD UK, said a Mercedes-Benz Sprinter diesel unit costs around £ 25,000 ($ 34,572), but an electric version costs up to £ 45,000.

“It’s even more expensive, but the gap is closing,” Craughan said. “If you can make them run longer than diesel vehicles, that’s where it will make more of a comeback.”

DPD will test a Zero Volta later this year and has spoken regularly with Arrival, Craughan said.

By 2025, battery prices are expected to fall enough for electric vehicles to be equal to fossil fuel vehicles.

But Arrugo’s Rugoobur said some of the startup’s production models will already outperform diesels by price, aided by a lightweight, durable thermoplastic composite body that compensates for heavy batteries, and includes basic self-driving functions to reduce costs. accidents in packaging depots.

“If we manage to lower that price point to an acceptable level where you can scale it, it allows us to make bigger commitments like the Arrival one,” Wake of UPS said.