General Motors plans to invest $787 million to build its new commercial electric van, the EV600, aren’t moving quickly enough to satisfy one of its high-profile customers so it’s turning to a German company to produce a limited run of the vehicles.
The automaker is using auto parts supplier Kuka to manufacture the first run of production vans for FedEx. The goal is to get road-ready vehicles to the logistics giant by the end of this year.
The move, which isn’t uncommon for passenger cars (i.e. Magna will build the Fisker Ocean EV), mirrors a move by California-based EV maker Canoo, which is partnering with Netherlands-based VDL Nedcar to build its “Lifestyle” vehicle.
The big difference is GM plans to shift full-time production to its former CAMI assembly plant in Ingersoll, Ontario. The new van made its debut in January.
Meeting customer demand
“We are working alongside Kuka for initial low-volume production to keep up with market demand and remain on track to deliver our first EV600 order later this year,” Travis Katz, CEO of GM’s BrightDrop division, told Reuters.
Kuka will build about 500 of the vehicles — by hand — to meet demand for the vehicles. The company will produce them at its facility in Livonia, Michigan starting in October, Reuters reported.
Currently the CAMI plant builds the Chevrolet Equinox, which is the company’s top-selling sport-utility vehicle and second-best selling vehicle overall trailing only the Chevrolet Silverado full-size pickup.
This requires some reconfiguring of the company’s manufacturing footprint, GM noted last month. In order to meet the demand for the EVs, it plans to stop Equinox production next April. The conversion should be complete for production of the EV600 to begin in earnest in late October or early November 202.
Initially the plant will run one shift, but the forecast calls for two shifts in 2023 and three shifts the following year. Much of that will depend on demand for the vehicles.
Vans are a hot market
GM’s push to get vans on the road quickly — even assuming possible risks due to contracting the build out to Kuka — is a sign of just how competitive the segment is.
The EV600 is part of a very crowded field facing competition like the Mercedes e-Sprinter, Rivan’s new all-electric delivery van, Fiat’s new E-Ducato and the king of the segment, Ford and its E-Transit model.
But it’s not just the big names looking to make inroads in the segment, GM’s competing with fringe players like Silicon Valley’s Canoo, Ohio’s Workhorse Group and the even smaller Arrival, which uses “microfactories,” ditching the traditional assembly line approach vehicle manufacturing.