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GM released their first allocations of vehicles to fleet customers this week for 2022 model year vans. The news was much worse than even a pessimist like me expected. For example some companies that requested 150 Express vans got 15 allocated. Now keep in mind that these are just what has been allocated and that does not guarantee that these are going to be built. These production slots have an incredibly good chance of being disrupted between now and when they are supposed to be scheduled. If this year has taught us anything it is that the auto manufacturers are built on a foundation of sand and problems at any of their thousands of suppliers have the possibility of bringing production to a halt. Most of this is due to the fact that the auto manufacturers have little or no control over the suppliers they buy parts from. As you can see in the semiconductor market, they are one of many gigantic companies from many different industries competing for a small supply of parts. When most of these semiconductor manufacturers are overseas and the US auto industry is just a small fraction of their business, the US auto manufacturers are not getting the preferential treatment they are used to getting. Which in my opinion is why it seems they are doing little to fix the problem themselves and looking to the federal government to mandate that they get preferential treatment. On top of all this the auto manufacturers are still planning on continuing the practice of “just in time” manufacturing. This is a manufacturing process that has the needed parts show up “just in time” for installation and no spare parts are kept on hand in case of supply chain problems. This is to maximize profit margins and make their stock ticker look really good, but does not help them consistently produce an actual product.
In a recent interview with auto part supplier, Jatco Ltd’s CEO Teruaki Nakatsuka said he expects production for their partner automakers to smooth out in March of 2022. Jatco is majority owned by Honda Motor Co with Suzuki also owning a stake. This sounds like good news for Honda and Suzuki but it seems that suppliers that work with the US manufacturers are still claiming this shortage could last into 2023.
Stelantis announces an all electric Promaster Van will be available for purchase in 2023. This is right in time to compete with GM’s new Brightdrop EV and Ford’s E-Transit. Stelantis said this move comes with a lot of demand from their customers. GM is also planning an all electric cargo van and medium duty truck in the near future. I imagine there are huge government cash incentives given to these companies for electric vehicle development. Must be nice to be some of the wealthiest companies in the world and still have so much of your business subsidized by the American people.
I wanted to ask a question to our audience and customers, how much would you be willing to spend on an all electric version of the current vehicles you use? For instance, a parcel delivery company can buy a large gas delivery vehicle for $45,000 on the low side up to 70 or $80,000 on the high end. We have heard estimates or $60-$100,000 for a similar all electric product. This price also does not include the infrastructure needed to support and charge a fleet of electric vehicles. Each charging station can cost upwards of $5,000 to install. With most fleet managers having major questions, like how many charges will these batteries last before they start to show signs of degradation? If a vehicle runs out of charge on the road is it going to have to be towed to a charging station? And what does a heavy cargo load do to my estimated range. All of these seem to be reasonable objections to fleet EVs and I am not sure anyone has the answers yet. I guess we will have to see how these vehicles are holding up in the next 4-5 years.
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