Just a month ago, truck maker Smith Electric Vehicles revealed it was suspending operations in Kansas City, citing a "tight cash flow situation." It looked like one more casualty in a long list of dead batteries that includes Fisker, Bright and Coda. But it appears that, for once, a suspension really is a suspension. According to CEO Bryan Hansel, Smith will rise again, with $42 million from the Chinese battery company Sinopoly. The first installment, $2 million, crossed the transom on May 12.
You should care about this because electric trucks will help all of us breathe easier in American cities. Every bag of Fritos at an urban convenience store has to be delivered, and most of them aren’t coming in by cargo bike. The short-haul diesel box trucks idle, and pollute, and block traffic. In truth, Fritos are an ideal EV cargo because they're really light for their volume, which translates into extra miles for these vehicles around town. Coke, well, that's heavier.
Building Smith electric trucks on the line in Kansas City. (Photo: Jim Motavalli)
Smith’s partners for electrified fleets include PepsiCo’s Frito-Lay division, Duane Reade drug stores, Staples, TNT, Coca-Cola and DHL. For FedEx, it delivered a batch of 100 step vans, its latest product (launched in 2012). Some 700 Smith trucks are on the road so far, and have covered 8.5 million miles.
Smith's truck takes on Manhattan. (Photo: Smith Electric Vehicles)
Smith Electric has built beachheads in cities like New York and Chicago, where it was planning to build factories. The announcement — a factory in the South Bronx! — drew every politician in the city, but then everything went on hiatus. The Bronx plans are on again, said Hansel, but there’s no timetable yet. “We have high hopes for New York,” he said. “It’s a big opportunity.”
Smith's electric step van in FedEx livery. (Photo: FedEx)
Electric trucks are made possible by big subsidies, which in New York amount to $9 million in federal funds, up to $60,000 per truck. A similar voucher program in California will subsidize clean trucks with $14 million in 2014, and up to $65,000 per truck. These incentives put electric trucks in the same ballpark as the diesel alternative, and that’s a major reason big companies buy them. “In the short term, buying electric trucks without subsidies is extremely challenging,” said Mike O’Connell, fleet manager at Frito-Lay.
In 2011, officials celebrate the plans for a Smith factory in the Bronx. The factory may still be built. That's Bryan Hansel second from right. (Photo: Jim Motavalli)
Smith could be profitable selling just 500 made-in-Kansas-City Newton box trucks and step vans a year, and Hansel said it wants to concentrate on making the numbers there before it builds its new plants in the Bronx and Chicago. “We’ll be starting the Kansas City line back up mid-summer,” he said.
Sinopoly gains a major U.S.-based customer for its batteries, but in some cases where “Buy America” rules are in effect, Smith will have to shop elsewhere. Sinopoly may also make some electric truck parts at its plant in Hangzhou. Sinopoly now owns what Hansel calls a minority position in Smith; the CEO said that the company’s biggest investor is Potomac Energy Fund. It should be noted that Sinopoly has had some financial challenges of its own. (You can read all about them here.) The company's LIFePO4 cells have been popular with EV converters because they're relatively cheap and reliable.
Smith is still keen to become a public company, after one failed attempt in 2012. It said then it was turning to the private sector, and the Sinopoly investment seems to have emboldened the company for a second bid. “It certainly is our plan to be in the public markets,” Hansel said. “We want to be on a major exchange.”
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