Walmart and FedEx plan to add thousands of electric delivery vans produced by General Motors to their massive vehicle fleets in the coming years, the companies announced Wednesday.
Walmart has signed a new agreement with the Detroit automaker to reserve 5,000 BrightDrop vans, while FedEx – BrightDrop’s first customer – is building on an initial order of 500 vehicles that GM began delivering last month.
FedEx on Wednesday said it has agreed to a deal for 2,000 more vehicles over the next several years. That order could potentially increase to 20,000 electric vans, according Richard Smith, FedEx regional president of the Americas.
“BrightDrop’s real. They’re here now. Their trucks are on the road in California for us delivering packages,” Smith said during a media briefing with executives from BrightDrop and FedEx. “They have a vehicle that works as advertised, and we love it. We want to buy a lot more of them.”
BrightDrop, a GM subsidiary, now has 25,000 confirmed reservations for its vans, BrightDrop CEO Travis Katz told CNBC. He said GM expects to complete FedEx’s initial order of 500 vans this year, followed by deliveries for Walmart beginning in 2023.
“So part of what is exciting about the conversations we’re having with them is we’re both really looking at this market through the lens of technology. How do you use technology to rethink operations and to drive more efficiency?” Katz told CNBC.
The increase in reservations comes as GM and others are rushing to launch new electric vehicles for corporate customers like Walmart, FedEx and Amazon that deliver directly to consumers.
Amazon has a deal with EV start-up Rivian Automotive to produce 100,000 electric delivery vehicles by 2030, with 10,000 of them coming by the end of this year. The retail giant has a 20% stake in Rivian.
U.K.-based start-up Arrival has a deal in place to deliver 10,000 EVs to UPS by 2024. Oshkosh will build 165,000 EVs for the U.S. Postal Service over the next decade.
GM, Walmart and FedEx declined to disclose any financial details about the deals, which were announced Wednesday as GM CEO Mary Barra delivered a keynote address at the CES technology show.
“This is really a momentum story,” Katz said. “What I can tell you is demand for these vehicles is through the roof. We’re seeing tons of customer interest.”
For FedEx and Walmart, the purchases from BrightDrop are a combination of savings and sustainability. BrightDrop says the cost to charge its EVs is approximately 75% less than to fuel a similar gas-powered vehicle. Both FedEx and Walmart have announced goals to have a zero-emissions delivery fleets by 2040.
Barra announced GM’s BrightDrop business at last year’s CES, including the first customer for its large EV600 delivery van being FedEx. It plans to begin producing a smaller electric van called the EV410 in late 2023, according to Katz.
Walmart plans to use BrightDrop’s electric vans as part of an expansion of its InHome delivery service. The company earlier Wednesday announced plans to grow its service area from 6 million U.S. households to 30 million by the end of this year.
BrightDrop is part of GM’s plans to grow new businesses from about $2 billion today to $80 billion by 2030.