GM’s BrightDrop to launch second electric van, secures Verizon as first customer

DETROIT — BrightDrop, General Motors’ electric delivery van brand, will launch its second vehicle in 2023, with Verizon as the first customer.

The EV410, a midsize delivery van designed for small, frequent trips, will join the larger EV600 van at GM’s CAMI Assembly plant in Ingersoll, Ontario. Like the EV600, it will have a GM-estimated 250 miles of range on a full charge.

BrightDrop will complete the first EV600 production builds for FedEx Express this year, the company said in a statement Tuesday. The build timeline was the fastest vehicle program in GM’s history, BrightDrop said.

“This is a strong statement to the market of how our unique operations setup, which marries the cutting-edge innovation, agility and focus of a technology startup with the scale and manufacturing might of a major automaker, can deliver real value to both customers and the planet,” Travis Katz, BrightDrop CEO, said in the statement.

The EV410 has 410 cubic feet of cargo area; a shorter wheelbase than the EV600, at about 150 inches; and a length of about 20 feet.

The midsize van can fit into a standard parking space, which is key for reducing congestion in urban areas, BrightDrop said.

The van was designed for faster, smaller payloads, such as grocery deliveries, or as a service vehicle for companies such as Verizon, which has set a goal for net-zero operational emissions by 2035.

“Mainstream EV adoption by businesses will require the largest fleet operators to work together with innovators like BrightDrop in the development of vehicles that meet the particular needs of our business,” Ken Jack, vice president of Fleet Operations for Verizon, said in the statement.

BrightDrop would not disclose the size of Verizon’s order.

The 20-month EV600 development timeline was driven by GM’s Ultium battery platform, virtual development processes established by the GMC Hummer EV program and an adjusted approach to manufacturing development.

BrightDrop partnered with supplier Kuka in Livonia, Mich., for the initial low-volume production of the EV600 while GM retools CAMI. The Canada plant will begin building the EV600 in November 2022.

GM estimates that fleet managers can save $7,000 annually by going electric with the EV600 compared with similar diesel-powered offerings.

“As e-commerce demand continues to increase and the effects of climate change are felt like never before across the globe, it’s imperative that we move quickly to reduce harmful emissions,” Katz said.

This year, FedEx Express has ordered at least 500 EV600s, and Merchants Fleet ordered 12,600 of them.

BrightDrop has also developed the EP1, a pallet that was designed to reduce package touch points, costs and physical strain on delivery drivers.

Michigan increases tax incentives for expansion of Ford F-150 Lightning plant

Ford Motor Co. will receive twice the amount of Michigan tax incentives for its Dearborn Truck Plant after announcing last month that it plans to double production of the F-150 Lightning pickup at the plant.

The automaker will receive just more than $6 million in State Essential Services Assessment, or SESA, exemption tax incentives for the $200 million expansion following approval from the Michigan Economic Development Corp. on Tuesday. The expansion is expected to create 300-400 manufacturing jobs. The average annual wage for the Ford plant jobs is $61,000.

Ford received $35 million in incentives in 2019 to support a $1.5 billion capital investment and creation of 3,000 jobs at its plants in Dearborn and Wayne, Crain’s Detroit Business previously reported. Crain’s is an affiliate of Automotive News.

At the time, it was approved for a SESA exemption valued at $3.2 million for the Dearborn project. Following its announcement of the plant expansion, the MEDC increased the automaker’s SESA exemption from $3.2 million to more than $6 million.

The expansion is expected to be complete by the third quarter of 2023.

“The proposed project will further expand the Company’s massive footprint in Michigan and create an extended ripple effect that will benefit Tier 1 suppliers, the Tier 1 supply base and several communities,” the MEDC said in a briefing memo.

The state’s approval of the Dearborn project comes a day after Ford’s splashy announcement that it will invest $11.4 billion in new EV plants in Kentucky and Tennessee. Michigan did not “actively bid” for the projects, MEDC CEO Quentin Messer said in a conference call with reporters Tuesday.

Ford boosted production of the F-150 Lightning after its annual production target projection doubled to 80,000 by 2024, Automotive News reported. The first truck is expected to roll off the line next spring.

Magna, Canadian university partner on $1.3M AV R&D project

Canadian supplier Magna International Inc. and the University of Waterloo in Ontario announced Monday a $1.3 million ($1.6 million CAD) joint project designed to enhance the safety and cybersecurity of self-driving vehicles.

Jim Quesenberry, director of research and development at Magna, said the five-year collaboration will aim to tackle some of the big issues in the “increasingly complex” modern transportation industry.

“As we look at what Uber or Amazon Delivery has done for us in terms of convenience and efficiency — and hopefully affordability — there are things behind that that we have to ensure are done with the utmost safety and security,” he said.

Sebastian Fischmeister, a professor of electrical and computer engineering at the university, said the research will focus on keeping vehicles — along with the people in and around them — safe, even as automated systems take on more tasks typically relegated to drivers. The teams will also look at safeguarding privacy and security as an increasing number of vehicle systems are connected to the Internet. The university is home to the Autonomous Vehicle Research and Intelligence Lab.

Driver-assistance features on a new test vehicle, provided by Magna, include systems for emergency braking, adaptive cruise control and lane keeping. More advances will likely be added over the five-year life of the project. For Fischmeister, these sorts of features represent the latest in a long line of steps forward for vehicle automation. That began more than a century ago with the electric starter, he said.

“People no longer had to crank the engine and potentially break their thumb.”

Fischmeister, who is also the head of the Real-Time Embedded Software Group at Waterloo and the executive director of the Waterloo Centre for Automotive Research, will lead the project. He said the work will put roughly a dozen masters, PhD and post-doctoral students to work developing software designed for the auto sector.

Funding for the project totals around $1.3 million, with the university contributing about $317,000 and Magna spending around $475,000, as well as offering up the test vehicle. The Natural Sciences and Engineering Research Council of Canada  will provide the remaining $475,000.

Waterloo has brought in a new specialist in control systems and general decision-making for autonomous systems as a direct result of the funding as well. Yash Vardhan Pant said he will focus on smoothing out what are known as “corner cases,” or situations that fall outside normal vehicle operating parameters.

Fixes that Waterloo researchers develop for these scenarios may find their way into Magna parts or software. 

“If we find a solution that claims it can handle that corner case, it would be a wonderful addition to add a sensor or add a control algorithm to this and then put the safety mechanisms in place,” Quesenberry said.

Over the course of the project, Magna’s engineering teams will work with their counterparts at Waterloo, as well as provide the researchers with real-world problems. The parts supplier and Ontario university have been close collaborators over the years, with the University of Waterloo heading up several company-backed projects and Magna hiring more than 500 co-op students from the university over the past 15 years.

Though the latest research project has a five-year horizon, Fischmeister was non-committal on whether fully autonomous vehicles may be roaming Canadian streets by the mid-2020s.

“Who would have thought in 1995 when they thought about mobile phones how we would use mobile phones today? And the same thing will happen with autonomous vehicles. As we develop the technology, we will see new challenges and we will see new opportunities as well.”

He said no matter the timeline the goal should be vehicles that are safe, secure and that people can step into without worrying the autonomous systems may let them down.

Dealer Rick Ricart on boosting EV sales, getting employees to go electric and the growth of online retail

Rick Ricart, president of Ricart Automotive Group in Columbus, Ohio, knows about selling electric vehicles. He’s been doing so for a decade.

His dealership group has been designated an official Electrified Dealer by Smart Columbus, a smart-city initiative.

Ricart, 42, discussed the program, selling EVs and the digital retailing trend with Contributor Sebastian Blanco. Here are edited excerpts.

Q: Ricart Automotive Group was certified as an Electrified Dealer. What does that mean?

a: It means that a customer shopping for electric vehicles in Columbus could work with dealerships that are well informed about electric vehicles to make it easier to make that transition. And then to be able to talk about, what does range anxiety mean, what does it really look like? To be able to have sales staff who are go-to experts on those electric vehicle questions.

Because, of course, there’s information on the Internet. People can go research that way. But if you are truly in the market, being able to talk to an individual who’s an expert within your own city, I think, makes a big difference in the consumer’s mind and allows them to feel more secure and trusted in their electric vehicle purchase.

Q: How many electric or plug-in HYBRID vehicles has Ricart sold?

a: I don’t know what the total unit count is. We began 10 years ago when the Nissan Leaf first came to market, and as we have seen more products come to market, the number slowly increased. I think 2020 was kind of the first year that it’s worth keeping track of those numbers because for most of that time, we were dealing with 1 or 2 percent of all new vehicles sold in the state were EV or PHEV. I know that number has grown closer to 4 or 5 percent now. In my personal opinion, we are just now seeing products from the manufacturers that are truly what the consumers want.

Q: What needs to be done to boost EV sales?

a: I think first and foremost, it’s the product itself. As these vehicles go from the hundred-mile range to 200, and now we see vehicles on our lot with 300- to 400-mile ranges, I think that’s what’s really making people open their eyes.

I also believe change starts internally. I myself actually did the official switch this week from a gas pickup truck to an all-electric Mustang Mach-E, and we encourage our employees to drive EVs. That’s one of the reasons we put in a lot of charging stations, so that our employees could feel comfortable buying one and be able to plug them in and charge them while they’re at work.

Ownership is always the best education. The more we can encourage them to drive them home, test drive them, that way, they’re communicating with each other all day; they’re sharing those experiences, and it makes it a more authentic communication when they do address the consumer.

Q: What digital strategies worked to sell vehicles before the pandemic?

a: We had an opportunity almost four years ago to become an early dealer partner with a company called AutoFi. AutoFi had a product that we use called Express Checkout, and, luckily, we began the advertising of “we can come to you” even before the pandemic started. So our team already had some experience doing online, remote sales, and by the time the pandemic hit, having that tool in place and having a staff that was trained and understood that has helped us greatly. We try to have everything available online. We have chat features, and they can call us. The next level is videoconferencing and FaceTime.

That is all a big help also because we can have someone who’s at home or in their office who really wants to do everything virtually, and then we offer to deliver to them at their home, their office or a neutral site.

Q: What about in-person transactions?

a: For the consumer that does feel comfortable coming in, but still would like to expedite the purchase, we encourage them to do as much online as they can.

That way, when they do come to the store, it really becomes an experience that has to do with just verifying the car. As long as the car checks out, everything else is done, and we can concentrate on celebrating taking delivery. That is one of the shining lights that’ll come out of the whole COVID pandemic. Car dealers were forced to adapt quickly, and consumers now have better purchasing options than they ever have.

Q: Do you think shoppers will want to keep doing more digitally?

a: I think you’re going to see that blend continue, and I think we’re going to slowly see more and more people do things online and spend less time in the store. If that’s 35 percent of people today, I think it’ll be 60 percent within two years.

A look at the roots of the chip shortage that has strained dealer inventory

Sould a part the size of a rice grain and worth less than a penny slow down and even stop a 5,000-pound, $50,000, full-size truck from being sold? When that tiny part is a microchip that triggers an airbag, fires a fuel injector or commands a navigation system, the answer is yes.

This isn’t going to go away quickly,” Phil Amsrud, an IHS Markit senior principal analyst, warned Automotive News in late January. “It’s a complicated situation. The root cause of all this is COVID. The system just got out of whack … and it’s going to take awhile to get it back in order.”

In January, consulting firm AlixPartners estimated the global auto industry would lose nearly $61 billion in revenue this year because of the chip shortage. It has since amended that to $110 billion.

Hopeful analyst predictions and soothing supply assurances from automaker CEOs and reps have proved to be optimistic. Even Toyota, which initially dodged North American production cuts, projected it would lose 60,000 to 90,000 vehicles in August and 80,000 this month. Honda also is warning its dealers of vehicle delivery cuts of as much as 40 percent in coming weeks. Likewise, Hyundai reported reduced production and inventories. But it expected August would be its most challenging month, with a gradual improvement in the following months.

How did the system get “out of whack,” and when will order be restored?

As the COVID-19 pandemic accelerated in early spring 2020, automakers chopped chip orders because of a predicted sag in new-vehicle sales. But when U.S. auto demand abruptly returned, they found they had lost their places in microchip supply lines, behind appliance makers, electronic-game companies and a host of chip-hungry TV, laptop and cellphone makers. Consumers were ordering chip- controlled toys and digital stay-at-home conveniences — at the same time they were shopping for vehicles online to replace current vehicles and avoid public transportation.

Government actions further aggravated the issue. Europe and the U.S. enacted regulations for high-end consumer goods that required chips to achieve new energy-efficiency requirements.

Also, the U.S. sanctioned several Chinese electronics companies, such as Huawei, crippling their access to materials and critical high-tech U.S. chipmaking equipment. So those companies stockpiled chips to ride out the American regulatory storm, and that created an added artificial scarcity.

Further tightening supply was a March fire at Japanese supplier Renesas.

Finally, the long-predicted move to electric and connected vehicles started to take off. A typical luxury vehicle requires approximately 1,300 chips to perform its microprocessor-directed tricks. An EV requires twice that many. So some experts say most chip prices and supplies aren’t likely to return to normal until sometime in mid- to late 2022.

Meanwhile, in mid-February, dealers and automakers, pinched for new vehicles, reduced incentives, cut advertising and, not surprisingly, raised prices.

Duncan Aldred, vice president of global Buick-GMC, said in February that many dealers were getting buyers lined up even before vehicles arrived on the lot. He described it as “a win-win for everybody.” He pointed out that the stock turns quickly, the dealer makes more money, and the customer gets a fresh vehicle.

Further, with launches of new vehicles blunted, used-vehicle prices took off. Today, used vehicles cost 15 to 25 percent more than a year earlier, if you can find them. Rental companies, which initially sold off their fleets thinking people would avoid shared transport because of virus concerns, are now scooping up even high-mileage models at auctions as travel restrictions ease and previously housebound folks go on vacations and visit relatives. Dealers at those same auctions are finding it difficult to buy low-mileage pre-owned vehicles.

Responding to the early chip scarcity, the Detroit 3 juggled several things. First, they prioritized chip supplies for more profitable, higher-volume models such as pickups and SUVs over slower-selling, low-margin vehicles such as sedans. Second, they reduced special options, such as navigation and advanced driver-assist systems, that required chips. Third, they built and stored vehicles without chips to be finished when supplies are reestablished. Some makers even considered shipping unfinished vehicles to dealers for retrofits. Still, even with these desperate moves, automakers such as General Motors, Ford and Stellantis were announcing plans to temporarily idle production lines.

Europe accounts for about 10 percent of global chip production, and the U.S. makes about 12 percent — down from 40 percent in 1990. Most of the remaining 78 percent is in Taiwan, China, Japan and South Korea. All producers have promised varying amounts of added production to cover global requirements.

Critically, the chips many automakers are looking for are not exactly cutting-edge silicon. Semiconductor companies are hesitant to invest much in increasing capacity in what are referred to as fabs and foundries for older, 200-millimeter silicon wafers, since in many cases this is 15-year-old technology.

Every week, industry expert estimates of lost vehicle production increase. AutoForecast Solutions keeps adding to its damage report. As of early this month, it was expecting the global industry to lose more than 8.5 million vehicles from production plans by the time the crisis ends. So it’s fair to say analyst and expert crystal balls are fairly chip-free but full of dark clouds.

Digital license plates aim to take the headache out of vehicle registration

For many car owners, renewing their registration is one of the more annoying (and easily forgotten) tasks on their car to-do lists. ReviverMX, of Sacramento, Calif., aims to change that with digital license plates, and it’s using growing relationships with dealers to do so.

Reviver’s digital license plates, known as Rplates, function via a cloud-based platform that connects vehicle owners with their cars and with state motor vehicle administrations over a wireless network.

“The most significant advantage to owning an Rplate is the ability to renew vehicle registration digitally,” Reviver founder Neville Boston told Shift in an email conversation. “Registration renewal takes place through a highly intuitive smartphone app. The entire transaction is completed in two quick clicks and the plate renews itself.”

Reviver was founded in 2009, and its first eight years were dedicated to designing the product and pushing for relevant legislation in California.

Though currently the plates can be sold only in California and Arizona, the company plans to reach adoption nationwide by 2025. However, this will depend upon each state’s willingness to push through necessary legislation. As Boston noted, “Each state has its own unique set of laws regulating license plates. Adopting digital license plates is a legislative act unique to each state.”

In addition, a number of other countries are working with Reviver to consolidate their own licensing compliance protocols using the platform, according to Boston.

Over the past year, Reviver has been distributing the Rplate through more than 50 California dealerships. Boston explained the process: “Reviver sells its Rplates directly to dealers, who install and display them on showroom floor vehicles bearing dealer-branded graphics on their displays and resell them with the vehicles to consumers.”

According to Boston, there are multiple reasons a dealer would be interested in selling the Rplate, including as an “on-ramp” to a larger sales discussion for a vehicle and as a “point of differentiation” during the buyer’s purchase process.

In addition, Boston says there are a few different ways dealers make money from the Rplate: “Dealers sell Rplates on their own terms and prices, keeping margins for themselves. They also receive a portion of the monthly connection fee in the form of recurring revenue.”

For some dealers, digital license plates make a lot of sense.

“Digital license plates come with a lot of potential in areas of convenience and simplicity, especially since everyone dreads renewing, registration is always a headache, and toll tags only complicate things further,” said Alex Killingsworth, a consultant for Superior Honda in New Orleans. “Digital plates present an opportunity to solve all of those problems with one product, and consumers are going to be willing to pay for that.”

To date, Reviver has shipped more than 13,000 Rplates. The plates aren’t cheap — with prices starting at $899 on the Reviver website. Boston says the typical customer “varies from a broad variety of custom-automobile enthusiasts to the full spectrum of new-car buyers purchasing virtually every make and model of car, truck and SUV.” He also noted that “emerging EV buyers are particularly attracted to the Rplate.”

Beyond the convenience of automatic registration, the Rplate allows car owners to add custom messages from a list approved by the motor vehicle department. The display, which uses “digital paper” technology from E-Ink, can be refreshed using an app. This can come in handy if the vehicle is stolen; owners can add the word “stolen” to the license plate to make it easier to identify.

As the auto world becomes progressively digital and buyers continue to seek out convenience, digital license plates may grow increasingly attractive to buyers and dealers alike.