Frito-Lay, Staples Salesmen Compete for Keys to Electric Delivery Trucks

As auto manufacturers seek to convince car buyers of the virtues of electric vehicles, one key group needs little persuasion: delivery fleet managers.

Commuters may fret about so-called range anxiety -- the fear of not making it to a charging station before the car’s battery needs topping up. Drivers of commercial delivery vehicles tend to follow the same route each day and have a good idea how much power they’ll need. Since trucks typically return to a garage every night, there’s little worry about finding a charger, Bloomberg BusinessWeek reports in its Jan. 24 issue.

Electrics “are quiet, don’t pollute, and vibrate less than diesels,” Mike O’Connell, director of fleet capability for Frito-Lay North America, said in an interview. “Our sales reps are fighting over who gets the next one.”

Frito-Lay, a unit of Purchase, New York-based PepsiCo Inc., has bought 176 electric delivery trucks for use across the country, or about 1 percent of its total fleet. As that number grows, O’Connell says, the vehicles will be instrumental in reaching a company goal of halving fuel use by 2020.

The trucks, all of them a model called the Newton from Kansas City, Missouri-based Smith Electric Vehicles U.S. Corp., have cut fuel expenses and boosted worker productivity, said Bob Simpson, Frito-Lay’s fleet manager for the New York region. By May, 6 percent of Simpson’s fleet of 250 trucks will be electrics, and if he had his way he would replace all of his diesels with them.

‘Real Savings’

Electric vehicles offer “real savings (on fuel), and we expect even more when you factor in very low maintenance and repairs,” Simpson said as he threaded his way through greasy diesels to show off his Newtons on a Brooklyn lot.

Less than 1 percent of the 135,000 medium-duty trucks that U.S. companies will buy this year will be electric, according to Americas Commercial Transportation Research.

Battery prices, which represent about a third of the cost of an electric truck, will likely fall to a quarter of today’s level by 2020, which will “drive down costs and create demand,” says Glen Walker, an analyst at Bloomberg New Energy Finance. Until then, incentives will likely help sales, he says.

The federal government offers a tax credit of up to $7,500 for each electric vehicle. California and other states offer additional rebates of as much as $5,000. Ford Motor Co. and Azure Dynamics Corp., a Canadian company, in December introduced the electric Transit Connect van. Ford expects to manufacture more than 750 of them this year, compared to 30,000 gasoline- powered models of the same truck.

80-Mile Range

With a range of about 80 miles (129 kilometers), the vans cost $57,400, or nearly triple what the gasoline version costs. Navistar International Corp. has built 78 of its $150,000 eStar electric trucks.

While the eStars are roughly double the price of similar diesels, Navistar expects to sell about 700 of them by mid-2012. FedEx Corp. has bought 19 eStars for use in cities worldwide, though the company says it needs to study their performance before committing to a larger order.

Smith, the largest producer of commercial electric vehicles, expects to sell about 1,000 Newtons this year, a fivefold increase from 2010. The $100,000 trucks, with a range of up to 100 miles, are built on a chassis purchased from a Czech manufacturer, and their electric components come from American subcontractors.

Coca-Cola Bottling Co., AT&T Inc., and utility PG&E Corp. have all replaced diesels with Newtons. In December, the U.S. Marine Corps ordered two for its base in Camp Pendleton, California.

Cheaper Than Diesel

While the trucks cost 50 percent more than diesel­powered rivals, Smith’s Chief Executive Officer Bryan Hansel said buyers will make up for that premium with lower fuel costs. “Our customers see it as a marketing advantage,” he said.

Office supply retailer Staples Inc. said the benefits are clear. The company has 41 Newtons -- about 3 percent of its total delivery fleet -- in California, Missouri, and Ohio. Staples is considering an order for more close to the end of the year as leases expire on 140 diesels. The company said the Newtons have helped it cut fuel use by 4 percent in the past three months.

Passersby often stop drivers to ask about the trucks, says Staples fleet manager Mike Payette. “It’s pretty cool for (drivers) to be able to say they didn’t use any gas today,” he says.

Some buyers say there’s still some reason for range anxiety. During a December storm that dropped 20 inches (51 centimeters) of snow on New York, one Frito-Lay driver got stuck midway through his route and almost drained the Newton’s battery rocking the vehicle back and forth to gain traction.

He returned to the garage and had to complete his rounds with a diesel, said fleet manager Simpson. The driver wouldn’t hear of switching back permanently.

“He said, ‘No way,’” Simpson says. “I’d take a beating if I tried to take one of these away from my drivers.”

To contact the reporter for this story: Chris Martin in New York at cmartin11@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.

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