General Motors is launching a new business later this month called BrightDrop.
BrightDrop will make electric delivery vehicles and offer other technology and services to delivery companies such as FedEx and UPS.
It also gives GM an added revenue stream.
The start-up will initially offer two products: The EP1, an electrically powered pallet to move packages, easing the burden on delivery company workers’ bodies. Also, the EV600, a commercial electric truck.
GM said a pilot program between FedEx and BrightDrop showed it helped improve FedEx’s efficiency, safely and sustainably. BrightDrop will deliver 500 of the EV600 trucks to FedEx, its first customer, later this year.
“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,” said GM CEO Mary Barra in a statement.
GM is not the first carmaker to enter this space. In 2019, Amazon said it would purchase 100,000 electric vans from electric truck maker Rivian. Amazon said it expects to deploy 10,000 of them by 2022.
The difference is BrightDrop will offer software and services as well.
It will help fund GM’s transformation to an all-electric automaker too. GM has pledged to invest $27 billion in EV development over the next four years. Barra has said GM will launch 30 new EVs by 2025.
“At GM we believe in an all-electric future, but we realize we’ll need more than consumer commercial cars to get there,” said Pam Fletcher, GM’s vice president of global innovation. “We need to leverage our expertise in other areas as well. So we created BrightDrop.”
Fletcher’s team developed BrightDrop. The same team created other GM start-ups such as OnStar Insurance, which will offer auto insurance to drivers at a lower rate, OnStar Guardian, which is a safety app, and GM Defense, which uses GM’s technology to make vehicles for the military and government.
Travis Katz serves as CEO of BrightDrop. He joined the company from venture capital firm Redpoint Ventures where he was an entrepreneur-in-residence.
Fletcher declined to say how much GM expects BrightDrop will contribute to GM’s bottom line. But GM estimates that by 2025, parcel, food delivery and other deliveries in the United States will be an $850 billion market.
“You will get a sense from the way we are treating this opportunity — making it a standalone business, a terrific team and new leader — that we think the possibilities with this are very impressive,” Fletcher said. “The contribution it will make is more than worth the commitment.”
Fletcher added that the “contribution to the bottom line will start very quickly” because BrightDrop already has letters-of-intent from customers beyond FedEx, but she declined to name them.
Initially, BrightDrop will serve the United States and Canada only. Its vehicles will use GM’s Ultium platform, the battery system GM designed to underpin the new commercial EVs it is developing.
BrightDrop’s first product to market, the EP1, is a propulsion-assisted, electric pallet to move goods over short distances, including from the delivery truck to a front door.
The EP1 will be available this year, Fletcher said. She declined to reveal its cost. Its purpose is to help reduce package touch points and physical strain on workers because the electric engine helps couriers to move it. Here are some of its features:
Built-in electric hub motor can go up to 3 mph. Maneuverable in tight spaces. Carries and secures, with lockable doors, about 23 total cubic feet of cargo. Can carry up to 200 pounds. Adjustable shelving organizes contents.
During the pilot program with FedEx, couriers were able to safely handle 25% more packages per day with the EP1s, Fletcher said. The couriers said the EP1s were easy to maneuver and reduced physical strain.
BrightDrop’s second product due out this year is the EV600, an electric light commercial vehicle made for deliveries over long ranges. BrigthDrop will help fleet customers establish charging stations for it, Fletcher said. She declined to give its cost or say where GM would build it. But its features include:
Powered by the Ultium battery system, it will have an estimated range of up to 250 miles on a full charge. Peak charge rate of up to 170 miles of EV range per hour from a fast charging station. Has more than 600 cubic feet of cargo area.
Initial customer interest in the EV600 has been strong, Fletcher said, but the first 500 go to FedEx this year. BrightDrop expects to make the EV600s available to more customers to order starting early next year.
In terms of software and services, BrightDrop offers an integrated, cloud-based software platform, which gives customers access to their BrightDrop products through both web and mobile devices.
The connectivity will give businesses detailed data that can help improve overall operations, including route efficiency, how assets are used and product upgrades. Drivers and couriers can utilize the mobile application for a variety of tasks, Fletcher said.
There is also BrightDrop mobile asset management for the EP1. This provides location monitoring, battery status, remote commands to lock and unlock, and over-the-air updates of connected features.
For the EV600, BrightDrop offers fleet management. This software gives fleet operators remote access, real-time location, battery and charging management, driver safety coaching and incident recording, remote diagnostics, safety alerts and other updates.
Fletcher said the EP1 and EV600 are only the beginning. BrightDrop will continue to grow its product offerings.
“The EV600 will be exclusive to the BrightDrop brand and we’re not talking about a commercial portfolio beyond that today,” Fletcher said, but added that a number of concepts are being explored, such as a medium-distance solution that transports multiple EP1s, and a rapid load delivery vehicle concept.