Electric-van startups race for a ‘golden ticket’ order

  • 5 months   ago
Electric-van startups race for a ‘golden ticket’ order


The future of a bevy of commercial electric van startups seeking investor capital through blank-check IPOs rests largely in the hands of a small group of big companies, above all UPS (UPS.N), FedEx (FDX.N), DHL (DHL.UL) and Amazon (AMZN.O).

With each carrier having tens of thousands of vehicles in its global fleet, an order from a package delivery giant can launch a startup on the road to manufacturing scale and profitability, and serve as a marketing tool to win orders from other big customers.

"Everyone is looking for their golden ticket," said Steven Merkt, president of transportation solutions at sensor, connector and electronic component maker TE Connectivity Ltd (TEL.N), which works with all the startups and provides technical feedback on designs. "If you don't have scale, you're going to get squeezed out pretty quick."

Desperate to find the next Tesla Inc (TSLA.O), investors have poured billions of dollars into electric vehicle startups, with mixed results.

But unlike Tesla, which enjoyed a headstart of years over traditional carmakers, commercial electric vehicle startups are racing against time as major manufacturers like Ford Motor Co (F.N) race to bring products to market or others like Volkswagen AG (VOWG_p.DE) beef up their electric offerings.


Some startups already have their golden ticket. Arrival , which went public via a merger with a special purpose acquisition company (SPAC), has an order for up to 10,000 vans from UPS (UPS.N). Chanje has a 1,000 van order from FedEx (FDX.N) in California, while Rivian has an order to build 100,000 vans for Amazon (AMZN.O).

Others, like Xos, are close. Xos, which is going public via public through a merger with blank-check firm NextGen Acquisition Corp (NGAC.O), is testing electric delivery trucks with both UPS and Amazon.

Some, like Canoo Inc (GOEV.O) have experienced turmoil as they finetune their strategies.

Thore Meurer, European senior fleet director at Deutsche Post AG (DPWGn.DE) unit DHL Express, said, "The window of opportunity is closing."

He said DHL has been talking to Britain's Arrival for years and will try out some of its test models. In the U.S. market, DHL has announced it will buy 89 electric vans from Lighting eMotors (ZEV.N), which went public via a SPAC merger.

Meurer says DHL Express is also talking to two Asian startups about electric vans for Europe. But the company wants 14,000 electric vans in its European fleet by 2030 and is eager to get going. In April, DHL ordered 100 E-Ducato electric vans from Stellantis (STLA.MI), a long-established manufacturer, to deliver packages in Europe.

"If another startup comes to market with a van two years from now, there will be no opportunity left for them," Meurer said. "By then, every big player will have an electric van on the market."