Ford predicts it will make $45B from businesses using EV delivery vans, new services
SONOMA, Calif.— Selling vehicles is just the first step in Ford's plans to make money off its first electric delivery van that the automaker is rolling out this month.
Between plans to sell 150,000 electric Transit commercial vehicles annually from 2023 onward (after building fewer to sell the first year) and creating "charging depots" to help customers manage their fleets, the company’s new Ford Pro group will generate $45 billion by 2025 and more after that, CEO Jim Farley said Tuesday at an elaborate unveiling of the E-Transit and Ford Pro’s strategy.
"Half our commercial-vehicle revenue could be software and services," Farley said as he announced a pilot program in which the Sonoma County Winegrowers association will test its EVs and services.
Betting big on EVs
Already in production at the company’s Kansas City assembly plant, the E-Transit builds on one of Ford’s hidden assets. Used for everything from delivery vans to flatbeds and farm trucks, the gasoline-powered Transit accounts for nearly half the lucrative business for medium-duty business vans in the U.S. Annual demand for the medium-duty business vans is about 330,000. “Last-mile” delivery vehicles like UPS and Amazon vans account for just 10% of Transit sales.
“Ford Pro is one of the biggest bets we’ve made” on a future of electric vehicles with data connections and other services, Farley said.
The E-Transit and Ford F-150 Lightning electric pickup coming later this year are the first vehicles offering the features Ford expects to add 11-digit numbers to its balance sheet.
Ford Pro boss Ted Cannis said the program, called Ford Pro Intelligence, will include:
- Charging depots where Ford will work with its customers and utilities to minimize EV energy costs and maximize running time.
- Cloud-based routing to reduce driving time and increase efficiency.
- Over-the-air updates with new features.
- The ability for businesses to tailor alerts for maintenance and repairs.
The system can reduce the time vehicles are out for service 40% and cut a business’s total ownership costs 10%-20%, Cannis said.
Prices start at $43,295. That’s about $9,000-$10,000 more than gasoline-powered models, but the E-Transit qualifies for federal and local tax credits that can offset the additional cost.
The E-Transit shares its basic structure with the internal combustion Transit vans Ford sells around the world. The frame was reinforced to hold the 1,050-pound 68 kilowatt-hour lithium-ion battery. Despite the heavy battery, total vehicle weight only rose 600 pounds because of the elimination of the engine, gas tank, transmission, etc., Transit chief engineer Ray Eyles said.
The electric motor rides between the rear wheels, so the E-Transit has an independent rear suspension. The 9,500-pound gross vehicle weight van has the same cargo capacity as a gasoline Transit, because the battery and motor are below its floor.
Ford is building E-Transit vans with three roof heights, three lengths, in addition to chassis cab and cutaway versions that have a cab, but no body behind it.
Saving money and time
The E-Transit van can go about 126 miles on a charge, considerably farther than what Ford’s research shows most owners currently go in a day.
Because the E-Transit is the same size as the gasoline van Ford’s been selling for years, businesses can swap tools, racks and other expensive custom parts from the old vans to EVs, saving money and making it easy for companies to dip a toe in the water by testing the EV in a single vehicle, then converting their fleet over time if they like it.
EVs should require much less maintenance than conventional vehicles because they don’t have complicated engines and transmissions. That accounts for some of the savings at the heart of Ford’s pitch to businesses, but the company has big plans for the new services it will offer to help companies run and charge their fleets efficiently, Farley said.
In the pilot program testing both the E-Transit and Ford Pro services with the Sonoma County Winegrowers association, the growers will each get an E-Transit this year. They’re considering F-150 Lightning electric pickups and may use Ford Pro’s software with other manufacturers’ vehicles they use.