Walmart and FedEx announced on Wednesday that they will acquire thousands of electric delivery vans manufactured by the General Motors subsidiary BrightDrop.
Walmart signed a deal with GM to set aside 5,000 BritghtDrop vans while FedEx, which was BrightDrop’s very first customer, is adding more to its delivery fleet after their initial order of 500 vehicles.
FedEx said on Wednesday that their deal involves 2,000 vehicles being incorporated into their service over the course of the next few years. Richard Smith, FedEx’s regional president of the Americas, said that this order may be upgraded to 20,000 electric vans:
“BrightDrop’s real. They’re here now. Their trucks are on the road in California for us delivering packages,” Smith said at a briefing with BridghtDrop and FedEx. “They have a vehicle that works as advertised, and we love it. We want to buy a lot more of them.”
BrightDrop’s CEO Travis Katz told CNBC that they now have 25,000 pending orders for their vehicles.
“So part of what is exciting about the conversations we’re having with them is we’re both really looking at this market through the lens of technology. How do you use technology to rethink operations and to drive more efficiency?” Katz explained to CNBC.
Biden’s push to make electric vehicles the future
US President Joe Biden is introducing stricter pollution laws in an attempt to phase out gas-powered cars and make electric vehicles the dominant mode of personal transportation in America.
Biden’s strategy is to use tailpipe regulations to edge the public over to electric vehicles from their gas-fueled counterparts. Biden sees this move as the key to reducing the pollution that is contributing to global warming.
The plan is unique for synthesizing climate, economic, and foreign policy to transform the car manufacturing industry. Biden’s anxiety about the environmental effects of gas-powered vehicles is also compounded with his belief that America is lagging behind China in the production of electric vehicles.
The push could also be a huge boost to jobs if American factories are expanded to make batteries and other electric car parts. China currently dominates the industry, with 70% of electric vehicle batteries being produced there.
“This is the first example of how Biden’s administration would do industrial policy in the climate change context,” said Michael Oppenheimer, who teaches geoscience and international affairs at Princeton University.
“It’s how you tie a lot of incentives and mandates together in a way that is aimed at achieving critical climate change goals, but could also put the US in a position to compete economically with China. There are trade implications, it could change where the jobs will be in the economy. It could disrupt the US auto industry — but also provide new opportunities.”