BrightDrop electric van key to GM's financial goals

INGERSOLL, Ont. — As General Motors rolls out a number of high-profile electric vehicles in 2023, including a battery-powered Chevrolet Silverado and GMC Hummer SUV, it's also starting full-scale production of a much lesser-known EV that is key to achieving its financial goals.

GM will begin producing the BrightDrop Zevo 600 electric delivery van on one shift at CAMI Assembly in Ingersoll in January, with plans to ramp up to multiple shifts by the end of next year.

Executives say the fledgling BrightDrop unit could deliver vehicles to more than 30 customers in the first half of 2023. BrightDrop has not yet disclosed that many customers, but Steve Hornyak, its chief commercial officer, told Automotive News that more announcements are coming.

Growth plans hinge on GM's ability to supply the CAMI plant with enough of the automaker's proprietary Ultium battery cells to meet demand. That's a concern for the union that represents hourly employees at the plant.

"We'll start one shift at a time until we get the batteries going," Mike Van Boekel, Unifor chairman at CAMI, told Automotive News Canada. "It will be three full shifts at some point in '23 — again, whenever the [supply of] batteries [is] strong and steady."

GM Canada President Marissa West did not directly address whether battery-supply constraints will slow ramp-up times at CAMI. She told Automotive News Canada the first Ultium Cells manufacturing plant in Ohio is now "up and running," with two more under construction and another in planning elsewhere in the U.S.
"There's such a willingness for adoption for our Ultium-based vehicles that we're anxious to scale up the battery manufacturing across all of those sites that have been announced," West said.
Strong battery demand and limited current output may hamper production for BrightDrop vans in 2023, with forecasts of about 16,500 units next year, Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions, told Automotive News Canada.

That represents about one-third of GM's initial plans, and even that "might be optimistic," Fiorani added.
"With such a limited number of batteries available, concentrating on higher priced and potentially higher profit models such as the $115,000 (all figures in USD) GMC Hummer EV makes more sense than the fleet-focused BrightDrop vans," he wrote in an email.

The BrightDrop Zevo 600 began production last week at the CAMI plant, which hosted an event with GM President Mark Reuss, Prime Minister Justin Trudeau, Ontario provincial officials and Unifor leaders. GM invested close to $800 million to retool CAMI, which previously built the gasoline-powered Chevrolet Equinox.

Production of the smaller Zevo 400 will begin in the fourth quarter of next year, Hornyak said.

Last year, BrightDrop started low-volume production of the Zevo 600 in Michigan while retooling the CAMI plant. Reuss last week called BrightDrop "the fastest product launch in our history, from concept to commercialization in less than two years."

The brand recently expanded its customer base into Canada, signing logistics company DHL Express Canada to use Zevo vans in its fleet starting early in 2023. Hornyak told Automotive News "there is market pull outside of North America," but BrightDrop is focused on this market initially.

It hasn't named additional U.S. dealerships beyond its first, BrightDrop Greater Los Angeles, in Fontana, Calif. The store is owned by Chevrolet-Buick-GMC dealer Mike Caposio. Additional dealerships will follow demand, based on where BrightDrop customers choose to deploy the vans, Hornyak said.

"We will expand upon that in the U.S., looking at very specific dealers that fit our profile for being able to manage fleets, service the vehicles, and in the proper geographic location with the proper facilities and investment profile," he said.

The Zevo 600 features 600 cubic feet of cargo space, can travel up to 250 miles on a full charge and is intended for long-range deliveries. The Zevo 400, with more than 400 cubic feet of cargo space, is designed for more frequent deliveries, such as groceries.

GM set production targets of 50,000 Zevo vans per year by 2025 at CAMI. Last month, GM said BrightDrop is on pace to generate $1 billion in revenue next year — en route to as much as $10 billion in revenue and 20-per-cent profit margins by decade's end.

BrightDrop said it has more than 25,000 reservations and letters of intent for its vans from customers including Walmart, Hertz and Verizon. To date, it has delivered 150 Zevo vans to FedEx Express, its first U.S. customer.

"The billion-dollar target — based on the backlog that we have right now and letters of intent, contracts, as well as orders — we've got extreme confidence in that for next year," Hornyak said.

The expansion of BrightDrop's geographic reach and product line — including current models and forthcoming derivative versions — puts "the plans in place that show us getting to that level," he added.

David Kennedy of Automotive News Canada contributed to this report.