UPS plans to add another 200 hybrid-electric delivery trucks to its growing fleet of alternative fuel vehicles in a $10 million deal with Workhorse Group Inc., a small manufacturer of delivery trucks and drones.
The new purchase builds on a May order for 125 Workhouse hybrid vehicles. At the time, UPS was Workhorse’s only customer. Workhorse has since added FedEx and Alpha Baking to its client list.
“We are committed to developing alternative fuel vehicles that lessen our impact on the environment and reliance on petroleum-based fuels. That effort is helping to transform markets and communities,” said Mark Wallace, senior vice president of global engineering and sustainability for UPS.
Workhorse’s hybrid technology provides the trucks with four times the fuel economy of a gasoline-powered vehicle, Steve Burns, chief executive of Workhorse, told Trucks.com.
The vehicles use lithium ion batteries to power an electric drivetrain. They also are equipped with a small two-cylinder gasoline engine – the same that comes on BMW i3 passenger cars – that acts as a generator to extend the truck’s range.
“Say you normally go 60 miles on your route, but it’s Christmas and drivers need to go 90 miles in a day,” Burns said. “We have an insurance policy on the vehicle, a gas generator, which will help the drivers finish their routes.”
“After driving a diesel vehicle, drivers get in our vehicle, which are quiet,” he said. “There is no smoke, no vibration and drivers really like them.”
The trucks will be deployed in seven states starting in January 2017, including Arizona, Texas, Nevada, Mississippi, Alabama, Georgia and Florida, UPS said.
Burns said UPS’ second and larger order for the Workhorse hybrid trucks validates the Cincinnati truck builder’s strategy and proves there is growing demand for low cost alternative energy vehicles.
“This second order from UPS speaks volumes to the validity of the premise, the pricing structure, the solidness of the vehicles, the desire to reduce emissions and the cost point per vehicle,” Burns said.
In May, UPS announced it was paying $50,000 per vehicle for its first order of 125 trucks. Burns said the new order is “comparable” to the cost of the original order on a per vehicle basis.
The world’s largest package delivery company posted $58.4 billion in revenue in 2015
UPS has invested heavily in exploring low-emission and alternative fuel vehicles through its Rolling Laboratory and now deploys more than 7,200 low-emission vehicles. The company achieved its goal of driving 1 billion miles with its alternative fuel fleet in August 2016, UPS said.
Besides the Workhorse hybrid vehicles, UPS also has purchased electric, hydraulic hybrid, compressed natural gas, liquefied natural gas and propane-powered vehicles.
Workhorse also is developing battery-electric delivery truck-based drones that can deliver packages and augment a delivery driver’s route. But federal rules don’t allow for truck-based drone delivery. Although UPS is experimenting with drone delivery from static locations, it has not purchased the Workhorse technology.