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Will GM’s Electric Van Be Its ‘Tesla Model 3’ Moment?

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Jun. 5 2020, Updated 12:41 p.m. ET

Reuters reported that General Motors (NYSE:GM) plans an electric van aimed towards business users. The company already announced that it plans to introduce at least 20 new electric vehicles by 2023.

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General Motors to pre-empt Tesla

Reuters reported that General Motors and other Detroit automakers, including Ford (NYSE:F), “don’t want to leave the door open for Tesla” as they did in passenger cars.

However, legacy automakers, including General Motors and Ford, didn’t foresee EVs’ (electric vehicles) huge potential. Before Tesla’s (NASDAQ:TSLA) entry into EVs, they were making electric cars just to meet the emission standards. Tesla showed legacy automakers how EVs could be profitable at the same time. Now, these automakers don’t want to repeat the same mistake with electric vans—a segment Tesla hasn’t ventured into yet.

Already competitive electric van market

While Tesla hasn’t entered the space, it doesn’t mean that the market isn’t competitive already. Amazon (NASDAQ:AMZN) has invested in the EV start-up Rivian. The company ordered 100,000 electric delivery vans from Rivian. Also, Electrek reported that UPS has ordered 10,000 electric delivery vans from start-up Arrival. Ford also announced an electric transit van.

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Will electric vans disrupt the commercial market?

Reuters reported that UPS’s senior director of fleet maintenance, Scott Phillippi, thinks that electric vans could disrupt the commercial market. He said, “It’s going to be similar to what the Model 3 has done for the consumer market.”

General Motors’s BV1 electric van

General Motors’ van is code-named “BV1.” The company will likely start producing the van in late 2021. BV1 will likely share some components with General Motors’ future electric pickups and sedans. The van will have the company’s new Ultium advanced battery system. Apart from competing with Tesla, General Motors might have a lucrative business opportunity in mind.

Morgan Stanley likes the idea

Techcrunch cited Morgan Stanley’s research regarding the electric vans. According to Morgan Stanley’s research, delivery vans are a logical fit for electrification with predictable routes and high utilization.

Overall, Tesla Model 3 has enjoyed tremendous success in the consumer markets globally. It will be difficult for any vehicle to replicate this success in any other segment. We’ll have to see if General Motors can achieve this feat in the commercial space with its electric van.

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