The problems automakers face in transitioning to electric vans was exposed in February by the sudden and outwardly unexpected announcement by Deutsche Post that it would stop making its StreetScooter range of battery-powered vans.
Why electrified vans are poised to 'take off' despite recent setbacks
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The company admitted to “years of losses” in the much-hyped project, which annoyed former Volkswagen Group CEO Matthias Mueller “beyond measure” after Deutsche Post bypassed the German automotive giant and developed the van on its own. When it needed production help, Deutsche Post brought in Ford Motor, which in 2018 started to build the StreetScooter Work XL variant based on the chassis of its popular Transit midsize van.
StreetScooter’s demise highlights the key issue with electric vans: They struggle to compete against diesel-powered rivals because their batteries are still too heavy and expensive.
“It’s a vicious circle,” said David Leah, senior commercial vehicle analyst at LMC Automotive. “One key consideration for LCVs [light commercial vehicles] is payload capacity, which a battery eats into. Weight is the nemesis of range, so greater battery capacity is needed to offset the decreased range, which further increases the weight and cost, which then eats into the payload capacity.”
Europe’s top-selling electrified vans in Q1 2020; % change from Q1 2019
1. Nissan e-NV200 2,097 +48%
2. Renault Kangoo Z.E. 1,874 -0.1%
3. StreetScooter Work 1,079 +195%
4. Ford Transit Custom(*) 4,680 new
(*) Plug-in hybrid
Source: JATO Dynamics
Despite this dilemma, automakers are undertaking electrification programs for their van ranges. “They have no choice. The legislation in Europe is pushing toward a reduction in average CO2,” Leah said. “It’s inevitable the electrified LCV market will take off.”
Last year 26,107 full-electric vans were sold in Europe, representing 1.2 percent of all LCVs, according to data from industry association ACEA. More than half of that market was shared between the two longest established electric vans, the Nissan e-NV200 and Renault Kangoo Z.E.
Those models are about to get a lot more competition as LMC predicts the market share for electric vans will jump to 15 percent by 2025, resulting in sales of about 370,000 that year. By 2030, the market will almost double to 700,000 electric vans out of 2 million total LCVs, the analyst firm expects.
Last year’s leaders
Europe’s top-selling electrified vans in 2019; % change from 2018
1. Renault Kangoo Z.E 9,158 +18%
2. Nissan e-NV200 6,358 +93%
3. StreetScooter Work 3,097 -24%
4. Renault Zoe LVC 1,268 +25%
Source: JATO Dynamics
Launch activity is already increasing. PSA Group, Europe’s largest van maker, will roll out full-electric versions of its midsize vans in the second quarter. The vans, badged as the Opel/Vauxhall Vivaro-e, Peugeot e-Expert and Citroen e-Jumpy (e-Dispatch in the UK), will be offered with two battery sizes: a 50-kilowatt-hour pack for a 200 km (124 mile) range, and a 75 kWh pack with 300 km range.
PSA executives are bullish about the reception the battery-powered vans will receive. “I think electric vehicles will be far more relevant in the van market than the car market, where it is already very relevant,” said Stephen Norman, head of PSA's Vauxhall business.
Ford of Europe was rolling out the new Transit Custom plug-in hybrid midsize van when the coronavirus outbreak put a halt to sales. Despite the setback, early demand for the electrified van was ahead of internal forecasts. “I wish I had many, many more than I have,” Ford of Europe President Stuart Rowley told Automotive News Europe in March, without disclosing figures.
Ford is also working on an electric version of the Transit large van, due in 2021. Demand will be there, Rowley expects, dependent on the country and the use case within that country. “I think you are going to see subsegments of the market transitioning quite quickly [to EVs],” he said, adding that companies operating delivery fleets in big cities would be likely candidates to make the switch.
Along with tougher EU rules – between 2021 and 2025, CO2 from new vans must decrease by 15 percent – automakers also face stricter local air quality standards within large European cities. The Netherlands, for example, will establish zero-emissions zones in 30 to 40 cities by 2025. Only full-electric or plug-in hybrid vans will be allowed to enter those locations.
That could be detrimental to small businesses with thin profit margins. “We can imagine a situation where that company is forced by regulation to switch to a ‘cleaner’ van and the cost of that can’t be sustained by their business model,” LMC’s Leah said.
The cost increase is significant. For example, the entry Transit Custom plug-in hybrid costs 40,215 pounds (46,093 euros; $49,093) in the UK, compared with 27,561 pounds for its diesel equivalent. The Transit’s battery pack is relatively small, too, at 13.6 kWh compared with 50 kWh for PSA’s forthcoming entry models (PSA has not announced prices for its electric vans).
One way to reduce price and weight is to develop an electric van from scratch. Delivery company UPS ordered 10,000 battery-powered vans from UK-based startup Arrival after investing an undisclosed amount in the company. Hyundai and Kia also invested in Arrival, putting in 100 million euros. Arrival said deliveries of the vans will start in 2021.
UPS became a believer in electric powertrains after converting some of its diesel delivery vans for use in central London, citing the predictability of its routes and back-to-base operation for overnight charging.
UPS, however, thinks that using a brand new design based on a skateboard platform is the only way to bring efficiencies that are not possible when using an existing combustion-driven van as the basis.
“If you are just looking to swap out the engine and put in an electric powertrain, that's typically where the problem comes in terms of adding weight. There are a lot of redundancies because it was never designed for that powertrain,” Luke Wake, UPS’s international director of automotive engineering and advanced technology group, told ANE.
Also touting the benefits of a platform designed specifically for electric use is London taxi maker LEVC. Later this year LEVC will launch a van using the same lightweight aluminum architecture and plug-in hybrid technology found in its black cab.
The combination of the 1.5-liter three-cylinder range extender and large, 30-kWh battery balances the need for good zero-emissions range (the company quotes more than 100 km on electric-only travel) and everyday use, the Zhejiang Geely-owned company believes.
“An acceptable range for an electric van is 200 miles [about 320 km], but for that you would need a 100-kWh battery, which would add a ton of weight. That’s not feasible,” LEVC Product Manager Antonios Giampanis said. The VN5 also carries over a lot of the technology from the taxi, including the large dashboard screen, rear parking camera and automatic emergency braking.
StreetScooter’s policy of stripping the driver’s environment of everything but the basics was part of why it wasn’t successful, Giampanis said. “Apparently basic doesn’t work for the European market,” he said. “If drivers feel comfortable, they enjoy driving and they are more productive,” he said. “Otherwise they slam doors, aggressively accelerate and use more energy.”
LEVC hasn’t yet revealed the cost of the VN5, but it’s expected to be more than the 40,000-pound Transit Custom plug-in hybrid, which is the van that it most closely rivals.
One way that manufacturers of electric vans are tackling the cost issue is by offering different size battery packs.
“You don't want to be coming back 75 percent charged every day,” UPS’s Wake said. He believes that Arrival is getting close to cost neutrality with the van produced in collaboration with UPS. But LMC’s Leah believes that won’t be the case in general. Said Leah: “Without incentives, we do not expect battery-electric vans to be cost competitive until the second half of this decade.”