A Potential $127 Billion Opportunity In The Accelerating Step Van Market

(MENAFN- Baystreet) A Potential $127 Billion Opportunity in the Accelerating Step Van market

With the world going green, demand for electric vehicles is quickly accelerating. Look at electric step vans, for example. According to RMI,“electrifying vans and step vans would avoid about 43.5 million tons of CO2 emissions annually, equivalent to removing nearly 5 billion gallons of gasoline from our Economy per year.” Better, according to Fortune Business Insights, the global electric van market could be worth $127.07 billion by 2030 from $16.7 billion today. That's likely to have a sizable impact on companies such as Xos, Inc. (NASDAQ: XOS), Tesla (NASDAQ: TSLA), Workhorse Group (NASDAQ: WKHS), United Parcel Service (NYSE: UPS), and GreenPower Motors (NASDAQ: GP). Plus, with growing demand from industries such as logistics, e-commerce, and public transportation, demand could easily pick up speed.

Helping,“Preference for electric trucks over diesel alternatives is spurred by governmental incentives aimed at fostering electric truck adoption, alongside the undeniable benefits they offer, including abundant torque, negligible noise emissions, and reduced maintenance expenditures,” as noted by Fact, a provider of market research.

Look at Xos, Inc. (NASDAQ: XOS), For Example

Xos, Inc. delivered 105 units to end customers in the third quarter of 2023. The period marks the highest quarterly delivery volumes to date for the company and the company's first quarter delivering positive gross margin units to customers. Vehicles delivered in the third quarter include the first 2023 Xos SV Stepvans delivered to customers. The new Xos 2023 stepvan is designed to meet or exceed margin performance of legacy diesel trucks on a host of performance metrics. This makes Xos among the first gross margin positive commercial EV manufacturers in the entire commercial EV industry and propels Xos towards its stated objective of positive free cash flows.

We were able to deliver GAAP gross margins in the quarter ranging from 7% to 15% pending final closing. These margins were driven by unit gross margins of the new 2023 Xos SV Stepvan that range from approximately +10% to 20% per unit, depending on configuration. Three pillars underscore this milestone achievement:

- Proprietary software technology;

- Long-term supply agreements with one of the largest global Tier 1 battery cell and electronics suppliers; and

- Robust design, engineering, and testing processes that reduce manufacturing costs.

Proprietary technology enables Xos vehicles to deliver top performance to customers from a more cost-efficient battery system. Xos' 140kWh Stepvan fulfills the needs of most last-mile delivery routes at a competitive purchase price. Xos' long-range 280kWh stepvan option doubles the usable range for fleets with longer routes or heavier payloads.

Recent long-term agreements with battery suppliers and other vendors governing the cost and warranty of critical components enable Xos to achieve significant savings per truck compared to previous Xos stepvan models.

Lastly, Xos' robust design engineering and testing processes contribute to lower manufacturing costs by reducing required labor input, and reduce service costs through improved vehicle quality.

The first profitable Xos vehicles compete directly with diesel last-mile delivery vehicles on total cost of ownership-a principal factor fleet customers incorporate in purchase decisions. When combined with available subsidies the cost advantages become even more significant. Compared to similarly equipped last-mile ICE delivery vehicles, the new 2023 Xos Stepvan offers an estimated 30-40% savings in those markets.

“We are proud of the achieving strong GAAP gross margins in the quarter due to the efforts of various teams, including engineering, supply chain, and others. We expect margins will continue to improve and be sustained as the tailwinds and demand for medium-duty EVs grow,” said Liana Pogosyan, acting Chief Financial Officer for Xos.

Other related developments from around the markets include:

Tesla just announced,“In the third quarter , we produced over 430,000 vehicles and delivered over 435,000 vehicles. A sequential decline in volumes was caused by planned downtimes for factory upgrades, as discussed on the most recent earnings call. Our 2023 volume target of around 1.8 million vehicles remains unchanged.” Tesla will post its financial results for the third quarter of 2023 after market close on Wednesday, October 18, 2023. At that time, Tesla will issue a brief advisory containing a link to the Q3 2023 update, which will be available on Tesla's Investor Relations website.

Workhorse Group, an American technology company focused on pioneering the transition to zero emission commercial vehicles , announced that it has received IRS approval as a qualified manufacturer for the Commercial Clean Vehicle Credit as defined in 30D(d)(3) of the Internal Revenue Code. With this approval, Workhorse customers are eligible to receive up to a $40,000 credit for deliveries of all Workhorse vehicles in 2023 and beyond.

United Parcel Service announced that it has entered into an agreement to acquire MNX Global Logistics (MNX), a global time-critical logistics provider. Once completed, the acquisition will bring even more precision and capability to UPS customers in healthcare and related industries who rely upon time-sensitive, often life-impacting logistics solutions. Whether it's to save a life or to get a grounded airplane back in the air faster, MNX will help UPS deliver what its customers need, when they need it, with even greater confidence.

GreenPower Motors, a leading manufacturer and distributor of purpose-built, all-electric, zero-emission medium and heavy-duty vehicles serving the cargo and delivery market, shuttle and transit space and school bus sector, announced the delivery of the first all-electric, purpose-built EV Star to Forth , a nonprofit organization dedicated to the equitable advancement of clean transportation, for use at Hacienda CDC's Las Adelitas, a four-story, multifamily affordable housing development in Portland, Oregon.

Legal Disclaimer / Except for the historical information presented herein, matters discussed in this article contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Winning Media is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice. Winning Media is only compensated for its services in the form of cash-based compensation. Pursuant to an agreement Winning Media has been paid three thousand five hundred dollars for advertising and marketing services for Xos, Inc. by Xos, Inc. We own ZERO shares of Xos, Inc. Please click here for full disclaimer.

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Ty Hoffer
Winning Media
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