Who Will Win the EV Truck Race?
Ford vs. Tesla vs. Rivian vs. GM … everybody has a different strategy to win over customers
Look at these two trucks.
One is aiming for the masses, the other is aiming for Mars. One you’d be hard pressed to differentiate from its gasoline sibling, the other is secretly a Batmobile.
Ever since Ford debuted its electrified F-150 Lightning last month, discussions on who will dominate the EV pickup segment have reached fever pitch.
Unlike the rest of the conversation around electrification, the EV truck is a peculiarly North American concern. While Norway may rejoice its 50% EV share on the back of cars alone, U.S. and Canada won’t get there without bringing along SUVs and pickups. As far as we are concerned, “green” trucking is the final frontier.
In 2020, pickups accounted for 20% of new vehicle sales in the U.S. Data firm IHS Markit predicts it will continue to have double digit growth over the next few years. The top three bestselling models in 2020, just like 2019, were all pickups. Unlike cars, which are declining every year, pickups have both volume and growth going for them.
But trucks may also be the hardest to transition to electrification. The segment does best in states with low population density (North Dakota tops American pickup share of vehicles sold), where consumers face the double whammy of range anxiety fueled by their higher-than-average distance travelled and sparse charging infrastructure.
These states — and their residents — tend to be also less concerned by climate change and may not have the appropriate regulatory structure that encourages transition to electrification. In most cases, both state and consumers are actively opposed to green policies.
So, if you can flip this segment, you may as well declare that EVs have won.
That’s why it good to have different approaches. Unlike electric cars, which have generally shown a tendency to regress to the mean, electric trucks (at least the ones we know about so far) have great variety. The Ford and Tesla are two fine examples — they couldn’t be more divergent. Ford wants to electrify the pickup. Tesla aims to blow it up.
Several new truck models from legacy automakers and startups will be launched in the coming months and years. They all have their unique strategies to corner the market. Some stem directly from their products themselves, while others arise from careful packaging. Here’s a look at how car companies will woo truck buyers.
Ford
What’s the difference? The F-150 Lightning is all pricing and productivity. Ford is not betting on tech appeal — unlike Tesla and GM. Probably reason why the Lightning baselines at $39,000. Compare that to the gasoline F-150 which starts at $31,000 — when you factor in available incentives, their pricing gets pretty close.
Ford’s range falls on the lower side compared to rivals, with two options of 230 and 300 miles. But that may be good enough for its target customers.
The company’s real play is practicality. Copious front trunk space, onboard power to juice up heavy equipment (even homes), and standard all-wheel drive will appeal to buyers who use pickups for a living. Want more proof that Ford knows pickup owners best? It will be pack a standard-size spare tire with the Lightning because smaller spares don’t really work for an on-the-job truck with a flat.
Ford will also pitch its own connected tools such as driver behaviour tracking, predictive maintenance, allowing it to make subscription money.
Who is it for? Primarily fleets. More precisely, small to medium fleets that rely heavily on pickups, make short haul trips and regularly return to the charging base. Think landscapers, construction crews, contractors etc.
How will it be sold? This may turn out to be Ford’s biggest headache. Unless it has some other plans, the company will have to contend with its dealer network which is one of the lowest rated in the industry. Traditional dealers — even the best ones — are not set up to sell electric vehicles and the Ford franchise is nowhere near ready. However, fleet sales is more specialized and Ford will have the opportunity to have more control how these vehicles are sold to businesses.
Expected position? Number two at best but may pick up pace past 2025.
General Motors
What’s the difference? Mary Barra’s stated electric ambitions aim higher than Jim Farley. As a result, GM has announced not one but two EV trucks — a Chevy Silverado variant and the Hummer EV.
Not many details are available about the electric Silverado. But it will compete as a workhorse, much like the Lightning. It is also expected to have a higher range, about 400 miles — which should scare Ford. But since it won’t be available till 2023, Ford will have time to up its battery game.
The Hummer, on the other hand, is set up to be all guilty pleasure — sans the guilt. GM is calling this much-maligned poster child of American excess the first ever EV supertruck. Measured on pure heft, GM’s label is not simply marketing spin. The revived Hummer will weigh over 9,000 pounds, boast about 1,000 horsepower, and will cost over $110,000.
Who is it for? Like the Lightning, the Silverado will be pitched to fleets. GM says that government and businesses are extremely enthused following some early showcases.
The Hummer will go to the bling crowd. It’s essentially a trophy truck and will appeal to anyone who has missed sidelined gas guzzlers.
It might also prove to be far more important than Lightning and Silverado in the IC-to-EV customer conversion games. In my opinion, Hummer 2.0’s allure has little to do with any green conscience. The only green bit about it is its Hulkiness. But that’s a good thing in this case. Buyers will likely come for the muscle and heft— even those who enjoy burning fossil fuel for kicks — but stay for the emissions-free efficiency.
How will it be sold? Again, GM dealerships are not known for their retailing edge. In fact, many of them would rather abandon the automaker than shift course, as it was recently seen when the company tried to force its Cadillac franchisees to upgrade. So GM will initially struggle with consumers but will probably fare better than Ford because of its experience with the Volt and Bolt. But for fleet sales, it should be well positioned to push the Silverado.
Expected position? Tough one to call but I think they will be number three.
Tesla
What’s the difference? Pretty much everything.
First, it looks like nothing like anything that has rolled out on four wheels in the entire history of four wheels. You can call it a pickup, but it’s probably a segment in itself.
Second, the range. Tesla’s maximum mileage will top out at 500 miles, even besting its own, industry-leading Model S.
Then there’s a barrage of Elonesque features and innovations that aim for the ether. The Cybertruck will seat six, boast a steering yoke straight out of name-your-scifi-movie, come with a photovoltaic tonneau cover, and yes, have bulletproof glass. (You can read a longer list of features here).
Who is it for? Possibly everyone, but more likely, people who have never owned a pickup before. A recent survey by Autolist found that demand for the Tesla model ranked highest among non-truck buyers. The Cybertruck will probably attract new customers to the pickup segment and further extend its growth trajectory.
Having said that, Tesla has a compelling entry-level price point and there will be enough work truck features to appeal to fleets and owner operators.
How will it be sold? Largely to individual customers at first, because that’s what it does best. But Tesla may have a harder time winning over fleets because it is relatively green in B2B. However, Tesla is growing its enterprise sales capabilities and the pickup will be its trial by, er, truck.
Expected position? Despite Tesla’s weaker position in fleet sales, I feel the sheer audacity of the Cybertruck will elevate it to the top spot.
Rivian
What’s the difference? They will be the first out of the gate. Despite the announced delay, Rivian will debut its R1T pickup in July. That will give the Amazon-backed startup its biggest edge.
With pretty much everything else, Rivian looks a little laggy, closer in spirit to a Ford or GM than a Tesla. Its exterior and interior stylings look blander than they need to be — particularly when you consider its $70,000 price tag. It promises a top-end 400-mile range, which beats the legacy automakers but again falls short of what Tesla has promised.
Who is it for? Apparently outdoor adventure lovers. I am not sure what that means — one can only assume that’s code for people who love trucking culture, have deep-ish pockets, and love going off the beaten track with their vehicles.
That’s a great niche for a startup but it won’t give Rivian any scale right away. The company will have to fast track its business sales strategy if it wants to be successful in this segment.
How will it be sold? Just like a Tesla. It will start with about 10 retail locations where it will sell direct to customers, with a solid digital footprint. Needless to say dealers won’t like it.
Expected position? At the top spot to start onviously. But down the road I see it trailing behind the other three, unless it has surprises up its sleeve.
