With news that Smith Electric Vehicles canceled an initial public offering of stock, originally planned for Sept. 21st, perhaps it’s time to ask the question, are electric trucks dead? Smith’s difficulties follow the bankruptcies of EV makers Azure Dynamics and Modec. Smith is a formerly British electric medium duty truck maker that relocated to Kansas City, MO in early 2009, just before President Obama’s inauguration. Not only has the Obama administration doled out $32 million in Department of Energy grants, President Obama spoke at Smith’s KC facility in 2010, praising the company as a “promising, innovative” environmentally sensitive company. That promise has not come to fruition. Smith originally had planned to build 620 medium duty commercial electric trucks in 2012. That figure was reduced by 40% to 380 trucks but in the first six months of 2012, Smith only built 79 vehicles. Though they haven’t built many trucks, they have accumulated $132 million in deficits. Since the IPO, initially planned to raise $125 million and then scaled back to $75 million, was supposed to provide the firm with operating capital, at least one analyst said that the canceled IPO could be a sign of an impending Chapter 11 bankruptcy.
In March of this year, Azure Dynamics, which developed electric-drive powertrains for automakers such as Ford, filed for protection from their creditors and stopped production of the electric version of Ford’s Transit Connect compact commercial van.
Last year, Modec, another UK electric truck company that was producing the medium duty commercial eStar truck in a joint venture with Navistar, went into administration, the British equivalent to bankruptcy. Navistar purchased most of the assets of Modec including intellectual property from the administrator. Navistar began production of the eStar in 2010, assisted by a $39 million grant from the Obama administration. As with Smith Electric Vehicles, President Obama also used a Navistar facility as a backdrop for a speech. Apparently the eStar is still in production, though there are only 9 eStar dealers in the United States and another two in Canada. The eStar web site is still active, though the last time the News & Events page was updated was in May of 2011.
If there is one application in which electric drive makes a lot of sense, it’s with urban delivery trucks. A hundred mile range is practical for many of those trucks and they’re rarely used around the clock so they can recharge at night. Also, commercial trucks typically are driven for many more miles than passenger cars are, so any additional up front costs unique to EVs might even be recoverable – just as Priuses and other hybrids have become popular with taxicab operators. According to Smith, total operating costs of their trucks are actually less than with comparable diesel powered delivery trucks.
President Obama’s policies have been aimed at switching a significant fraction of the American fleet to alternatives like hybrids and battery electric vehicles in a relatively short period of time. Theoretically, if electric trucks are all they’re cracked up to be, commercial operators should be embracing the trucks that Azure, Modec and Smith were making. The bankruptcy of Azure, the liquidation of Modec and the financial and production difficulties that Smith is facing don’t auger well for Mr. Obama’s plans.