Several high-profile commercial electric vehicle startups are heading towards bankruptcy, but there’s one that seems to stand out above all the rest.
On Thursday, BrightDrop, backed by General Motors (NYSE: GM), announced that it is on track to hit $1 billion in sales by 2023. BrightDrop noted that by the end of the decade, BrightDrop would have sales of $10 billion at a 20% profit margin.
“We’re a tech startup with a subscription-based product offering backed by a global powerhouse – that puts us in a league of our own,” said Katz. “As we focus not only on electric vans, but also on e-carts and software, we are confident that our complete ecosystem of connected products and services will result in significant sales and growth in the years to come. Between delivery and our recent expansion into the online grocery sector, we are able to capture significant market share across multiple verticals.”
BrightDrop said it has over 25,000 reservations and letters of intent for its vehicles. It began delivering EV600 vans to FedEx Express in December 2021. In January of this year, BrightDrop announced that Walmart had placed an order for 7,000 vehicles and FedEx was expanding its original order of 500 vehicles to up to 20,000 units. Hertz, Verizon and Merchants Fleet have also announced their intention to use BrightDrop vehicles.
If BrightDrop hits its $1 billion revenue goal next year, it would only be in its third year of existence. For comparison, it took Google five years to reach $1 billion, Facebook six years, Tesla nine years and Apple 14 years.
EV issues persist
BrightDrop’s success runs counter to the current commercial EV market, where start-up competitors are struggling to survive. With the possible exception of Rivian (NASDAQ:RIVN), which is backed by Amazon, many are facing difficult times highlighted by Arrival’s woes.
Earlier this month, the UK-based vehicle maker said it might not have enough cash to survive through the end of the year. In August, the company cut its 2022 production target by 95%, from a projected delivery of up to 600 vehicles to just 20. Founded in 2015, Arrival (NASDAQ: ARVL) was an early entry, earning an early order from UPS (NYSE: UPS) for 10,000 units.
Both Rivian and Canoo (NASDAQ: GOEV) shed about 6% of their workforces this summer, though both appear to be on stronger footing. Rivian has a commitment from Amazon for 100,000 vehicles, and Canoo recently bought a manufacturing facility in Oklahoma City and announced a battery plant in Pryor, Oklahoma.
Another EV startup, Electric Last Mile Solutions (ELMS), went bankrupt this summer. On Thursday, Mullen Automotive (NASDAQ: MULN) announced that it has secured $150 million in financing to acquire the assets of ELMS.
From the start, BrightDrop has taken a different approach than most EV manufacturers. Katz previously told Modern Shipper that BrightDrop would be developing a broader approach to electric vehicles.
“The vehicles are an important part, however [we] Actually look at the problem of last-mile logistics holistically,” Katz said. “How to create efficiency through the wider flow [of goods movement].”
Innovations keep coming
BrightDrop is building two different size delivery trucks, is continuing to work on an electric pallet system, announced Trace Grocery in September and unveiled BrightDrop Core on Thursday.
Trace Grocery is a temperature-controlled electric trolley that allows grocers to grab the device straight from the store shelves and place it outside for customer pickup. Customers receive digital verification codes to access their items in the Trace Grocery unit.
The system can move up to 350 pounds at a speed of 3 mph to match an operator’s walking speed. It has nine compartments.
BrightDrop Core combines hardware and software to reduce the total cost of ownership of BrightDrop vehicles. It features a fleet readiness dashboard, asset monitoring, historical reports, and customizable alerts.
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