Smith Electric Truck Manufacturer Looking For Big Growth And Sales in 2010

2010 looks to be the breakout year for alternate energy vehicles. Smith Electric is leading the way as far as medium duty truck are concerned. To help them along are potential tax incentives for the buyers up to $30,000 per vehicle.

From Edmunds.com:

It's been a tough 12 months for most in the auto industry, but a few independent EV makers are actually emerging from 2009 better off than they entered the year.

----------

Workers at Smith U.S. install taillights on electric truck chassis.

----------

Both Tesla Motors and Fisker Automotive got huge boosts when they qualified for government loans to pursue development of "affordable" (an adjective that right now seems to means somewhere between $32,000 and $40,000 - after incentives - in EV-talk) electrified sedans and at now one key player in the electric truck market says things are moving rapidly in the right direction as 2010 dawns.

Smith Electric Vehicles U.S., a Kansas City-based builder of mid-sized electric delivery vehicles, says that the recession hasn't crimped its early-stage business and that it has its hands full just keeping up with production of back-ordered vehicles for its initial cadre of customers - blue chip companies including Coca-Cola, AT&T and Frito-Lay.

Good Timing

Smith - an American offshoot of the U.K electric truck builder Smith Electric Vehicles, seems to be in the right place at the right time - not so big that it can be hurt by the economic slump, not so small that it has gotten lost in the shuffle.

It's initial orders are for demonstration electric truck projects that many major companies are launching because they get federal and state tax credits for greening up their delivery fleets.

Companies such as Coca-Cola thus had money this year that they had to spend on greener vehicles, and Smith was there with an EPA-approved drivetrain and a truck large enough to satisfy their needs.

Smith U.S. now makes Class 5 to Class 8 electric trucks, which range in size from 7.5-12 tons, and has plans to drop down into the 5- to 8-ton category to compete in the larger Class 3 and Class 4 markets.

Its Class 5-8 trucks can deliver from 50 to 120 miles of range - depending on the size of the battery pack a customer orders - and typically have a top speed of around 50 miles an hour, more than sufficient for the intra-city delivery work for which they are intended.

They can be recharged in 6-8 hours with a single on-board charger and customers who need quicker turn-around can double up the on-board charging capacity.

The company has what appears to be a great sales climate: big corporations, government agencies and small companies as well all need to slash their delivery costs, government at all levels is looking to reduce smog and noise pollution and CO2 emissions and electric-truck makers can replace noisy, emissions-spewing diesels with short-haul vehicles that are incredibly cheap to operate.

Pricey Up Front

The downside is that they have a stiff initial cost - an 8-ton Class 5 Smith Newton can cost $150,000 and up, or close to triple the price of a competing diesel.

But government subsidies and lower operating costs are helping to equalize that, and as volume grows and competitive supplier base develops, the price of electric drive systems is expected to begin falling.

As is the case with electric cars, battery-electric trucks like Smith's will probably always cost more up front than conventionally powered models, but their low fuel and maintenance costs - no oil changes, no spark plugs or fuel injection systems to maintain, no clutches to burn out, and fewer brake jobs because of regenerative braking systems - can soon earn back the difference.

Smith's 120-kilowatt electric motor has four moving parts, versus around 1,000 in a diesel truck engine.

That simplicity means cost savings that can make a big difference in the fleet delivery business, where trucks can stay in operation for 10 years or more and an electric model can easily earn back its initial cost and then start helping reduce the fleet maintenance budget. Smith figures that for the typical fleet, payback on an electric truck comes within the first five years."We're at the right place on the curve right now," Smith U.S. chief executive Bryan Hansel (right) told us in a recent interview. "We can sell into this economy because our partners are still in the demonstration mode and the percentage of our trucks to their entire fleets is so small" that purchases hardly make a dent in their purchase funds.

Smith U.S.'s 25-employee plant in Kansas City, Mo., started earlier this year simply prepping and delivering trucks brought over from England.

New Chariman

But it now is beginning to use locally supplied components to finish up the cab-and-chassis units it is buying from Smith U.K., whose parent, Tanfield Group, is a 49 percent owner of the U.S. company.

Tanfield's founder, Roy Stanley, has just been named chairman of the Smith U.S. board of directors to help direct the company's efforts here. Stanley also founded a U.K. bus maker, Optare, which now builds hybrid and battery-electric buses for the European market.

That may be a clue as to a future direction for Smith's U.S., but for now the company is concentrating on its Newton truck line, said Hansel.

"We've been working up our domestic supply chain and getting our daily production line going," he said. "That's been our priority for the past 120 days, the transition to local suppliers and production."

Ramping Up

Each truck as about 120 items that must be added to the bare chassis, he sad, "and we're up to 85 percent from local suppliers" for items such as brake systems, wiring harnesses and fasteners.

Production is running at two trucks a week, he said, with the goal of increasing the flow (and sales to match) to four a week in February "and to continue growing and increasing production after that."

Hansel, for instance, earlier this month signed a deal with Austin, Texas-based battery maker Valence Technology for $1.4 million worth of lithium iron magnesium phosphate battery packs and controllers - enough for 25 of the trucks the company expects to be building and delivering in the last half of 2010.

Acknowledging that the Smith electric truck, with its lithium-ion battery pack (the packs come in varying sizes, and costs, depending on the range demands of the customer), is an expensive vehicle, Hansel breathes a sigh of relief at what appears to be a congressional imperative to help get such trucks into the nation's fleets so they can build a body of reliability and cost-efficiency data that will help them sell themselves in years to come.

Federal Jump-Start

The Senate, for instance is set to begin pondering early in 2010 a measure - S. 2854, the Kohl-Hatch Heavy Duty Truck Hybrid Tax Credit Bill - that would extend federal tax credits of $15,000 to $30,000 per truck to purchasers of electric trucks in the weight classes in which Smith competes.

There's also an appropriations bill pending in congress that would provide $65 million for the U.S. Postal Service to use for purchasing electric delivery vehicles - and Smith already is on the approved bidder list.

While Smith is one of the few - so far - independent companies in the electric truck business, most major truck makers are developing hybrid diesel-electric drivetrains for their big rigs, and some, including Ford Motor Co. and Daimler's Mercedes-Benz unit, are working on all-electric delivery vans as well.

I'm listening to a diesel delivery truck's clattering idle out in the street below my study window as I put the finishing touches on this.

Maybe 2010 not only will bring us our first mass produced electric cars - Nissan's battery-electric Leaf and General Motors' generator-extended Volt - but will signal the start of an equally significant trend in the electrification of a big chunk of the nation's trucking fleet.