E<\/span>lectric<\/strong> van and bus maker Arrival is wrestling with the global pandemic like other UK firms, but not because of a lack of business.<\/p>\n\n\n\n Arrival is fielding four to five times the number of queries from potential customers compared with a year ago as soaring e-commerce during the pandemic and changing emissions regulations have fueled demand, said president Avinash Rugoobur.<\/p>\n\n\n\n \u201cWorldwide, the mindset has shifted and people understand the future is electric,\u201d said Rugoobur. \u201cSo now it\u2019s a question of how do we get there?\u201d<\/p>\n\n\n\n At Arrival\u2019s R&D centre in Banbury, northwest of London, executives from a major British retail group patiently waited to tour the startup\u2019s test van, due to start production in 2022.<\/p>\n\n\n\n A spike in interest in Arrival followed Britain\u2019s call in November for a ban on new fossil-fuel vehicles by 2030, and was further helped by new U.S. President Joe Biden\u2019s stated interest in electrification.<\/p>\n\n\n\n Tightening CO2 emissions targets in Europe and China have combined with improving battery technology to provide greater range at lower costs, giving commercial electric vehicles (EVs) their moment in the sun after years of waiting.<\/p>\n\n\n\n \u201cPeople talk about a tipping point for commercial EVs, but I think we\u2019re already there,\u201d said Luke Wake, vice president of maintenance and engineering at United Parcel Service Inc, which has ordered up to 10,000 vans from Arrival and owns a stake in the startup.<\/p>\n\n\n\n Feverish investor interest in finding the next Tesla Inc and bringing them to market via special-purpose acquisition companies (SPACs) has included commercial EV startups like Canoo Inc and Arrival, which will go public later this month via a merger with CIIG Merger Corp.<\/p>\n\n\n\n Also, the coronavirus pandemic has boosted the need for vans to deliver goods to consumers at home.<\/p>\n\n\n\n Startups like Rivian, Volta Trucks and traditional manufacturers Daimler AG, Ford Motor Co and General Motors Co have models out or in the works. Rivian will begin making vans for Amazon.com Inc later this year.<\/p>\n\n\n\n As batteries are still expensive, commercial EVs have a higher sticker price than diesel or petrol equivalents – a hard sell for many cost-conscious companies.<\/p>\n\n\n\n But thanks to lightweight materials and tailoring battery packs to customers\u2019 range needs, Arrival\u2019s Rugoobur said that is about to change – at some ranges its vans will cost less than a diesel equivalent.<\/p>\n\n\n\n \u201cIf Arrival can manufacture those vehicles at the equivalent price of a diesel van, the total cost of ownership is so heavily in their favour it becomes a competitive advantage,\u201d said David Wyatt, an analyst at research firm IDTechEx.<\/p>\n\n\n\n \u2018IT\u2019S GOING TO HAPPEN FAST\u2019<\/strong><\/p>\n\n\n\n Fleet operators also face increasing scrutiny over sustainability from retail customers, who feel the same pressure from consumers, said Volta Trucks Chief Executive Rob Fowler.<\/p>\n\n\n\n \u201cIf you look at logistics operators, they\u2019re in the middle and under pressure from all sides,\u201d he said.<\/p>\n\n\n\n Stockholm-based Volta Trucks, which also operates in the UK, is developing a 16-tonne electric truck, due for production in 2022, for urban freight distribution routes. Batteries are heavy, so the Volta Zero\u2019s body is made of a light hemp-based composite and its shorter inner-city routes require fewer battery cells.<\/p>\n\n\n\n Volta Trucks has an order book of $260 million and its biggest public order to date is for 1,000 trucks from French refrigerated truck firm Petit Forestier.<\/p>\n\n\n\n Higher upfront costs, challenges associated with charging multiple vehicles simultaneously and a paucity of available models mean there are still relatively few commercial EVs in service.<\/p>\n\n\n\n But Simon Webber, a portfolio manager at Schroders, which has about $650 billion in assets under management, said more EVs coming to market and falling battery costs will change that.<\/p>\n\n\n\n \u201cIt\u2019s going to happen fast,\u201d Webber said. \u201cBecause the average life of those vehicles is lower, they turn over faster than passenger vehicles, they will electrify faster.\u201d<\/p>\n\n\n\n Leading energy consultancy Wood Mackenzie said the commercial EV market will mushroom from a low base today to global sales of 3 million units by 2025 and 9 million by 2030, led by buses and light trucks.<\/p>\n\n\n\n Based on conversations with manufacturers, \u201cwe see commercial electric vehicles coming in a big, big way,\u201d said Tom Jensen, CEO of battery maker FREYR, which is going public via a merger with a SPAC, Alussa Energy Acquisition Corp.<\/p>\n\n\n\n \u2018STILL MORE EXPENSIVE\u2019<\/strong><\/p>\n\n\n\n EV makers say while commercial EVs have a higher sticker price, over their lifetime their \u201ctotal cost of ownership\u201d is lower as electricity is cheaper than diesel and electric motors require less frequent repairs due to having fewer moving parts.<\/p>\n\n\n\n The UK arm of package delivery firm DPD, a unit of France\u2019s La Poste, was an early adopter and its 732 EVs account for nearly 10% of its fleet – most of them e-NV200 vans from Nissan Motor Co Ltd or eTGE vans from Volkswagen AG unit MAN.<\/p>\n\n\n\n In 2020, the pandemic drove DPD\u2019s volumes to a daily record of 2 million packages during the holiday peak season and the company will buy 500 more electric trucks in 2021.<\/p>\n\n\n\n Olly Craughan, DPD UK\u2019s head of corporate social responsibility, said a diesel Mercedes-Benz Sprinter unit costs around 25,000 pounds ($34,572), but an electric version costs up to 45,000 pounds.<\/p>\n\n\n\n \u201cIt\u2019s still more expensive, but the gap is closing,\u201d said Craughan. \u201cIf you can run them longer than diesel vehicles that\u2019s where you\u2019re going to make more of a return.\u201d<\/p>\n\n\n\n DPD will test a Volta Zero later this year and has talked regularly with Arrival, Craughan said.<\/p>\n\n\n\n By 2025, battery prices are expected to fall enough to give EVs price-parity with fossil-fuel vehicles.<\/p>\n\n\n\n But Arrival\u2019s Rugoobur said some of the startup\u2019s production models will already beat diesels on price – aided by a tough, light thermoplastic composite body that offsets heavy batteries – and includes basic self-driving features to cut down on costly accidents at package depots.<\/p>\n\n\n\n \u201cIf we can get that price point down to an acceptable level where you can scale it, it allows us to make bigger commitments like the one with Arrival,\u201d UPS\u2019s Wake said.<\/p>\n\n\n\n Reporting by Nick Carey in Banbury, England; Additional reporting by Kate Abnett in London; Editing by Ben Klayman and Matthew Lewis<\/p>\n","protected":false},"excerpt":{"rendered":" A man stands next to a fully-electric test van, due to go into production in 2022, built by electric van and bus maker Arrival Ltd, that has seen a spike in interest due to soaring e-commerce amid the coronavirus disease (COVID-19) pandemic and looming fossil-fuel vehicle bans, in Banbury, Britain, February 23, 2021. 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