Auto industry smtih-electric

Published on April 29th, 2014 | by Andrew Meggison

3

The Plug Has Been Pulled On Smith Electric Vehicles

smtih-electric

Smith Electric Vehicles of Kansas City has suspended production of its electric trucks and vans. While executives remain optimistic about Smith’s chances, even they had to acknowledge that building a handful of electric vehicles at an extremely high just isn’t a sustainable business model.

Smith Electric Vehicles started in 2009 with around 100 employees, and in 2010 Smith Electric was award a $32 million grant from the U.S. Department of Energy to develop electric utility vehicles. In 2011 Smith Electric planned on opening two additional plants in New York and Chicago, even meeting with The Bronx Overview Economic Development Commission and Chicago Mayor Rahm Emanuel.

Meanwhile, orders from big-name clients like Coca-Cola and Frito-Lay were coming in, and Smith Electric vehicles could even be found on military bases. The future seemed bright for Smith Electric Vehicles, at least until last week when Smith Electricsuspended operations on its EVs due to a lack of capital.

So what the hell happened happened?

Blame competition. Natural gas powered and hybrid trucks are becoming more available and more popular in the trucking industry, and companies like VIA and AMP are also trying to edge into the commercial truck market. Smith may have had a head start, but the competition has accelerated past Smith since then.

Blame the business plan. Smith Electric relied heavily on the $32 million grant from the U.S. Department of Energy, allowing Smith to actually subsidize the purchase of electric vehicles to entice customers. In other words when a company like Frito-Lay purchased a Smith EV, they didn’t pay full price. While it may have gotten some customers through the door, it didn’t bring them back for more.

Blame a lack of understanding and interest in the EV market. Smith surely had grand ambitions and sales projects, but since 2010 the company recieved just 510 orders for its electric vehicles, of which only 439 have been built.

There’s plenty of blame to go around, but despite all this, Smith Electric Vehicles still hasn’t closed the door to its factory for good – production has just been stopped. Currently Smith Electric is in a state of reorganization in an attempt to make the business viable. Only time will tell if we’ll see any new Smith Electric Vehicles rolling out of the Kansas City plant.

Source: Kansas City Business Journal via Green Car Reports

 




Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , ,


About the Author

Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor's Degree in Government and International Relations from Clark University and a Master's Degree in Political Science from Northeastern University. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail. You can follow Andrew on Twitter @AndrewMeggison



  • shecky vegas

    Any word on what’s going to happen with the Ford Transit? That was a Smith platform vehicle.

  • Frank in Ohio

    This article is a poster child for yellow journalism…

    “at least until last week when Smith Electric suspended operations on its
    EVs due to a lack of capital.”
    — Last week? The article you cite states production was suspended months ago.
    And the article itself is nearly a month old.

    “Smith may have had a head start, but the competition has accelerated past
    Smith since then.”
    — Based on what? What is the market share in the commercial trucking industry for CNG and hybrids? How many clean fuel vehicles has Freightliner, VIA, or AMP produced?

    “Blame the business plan. Smith Electric relied heavily on the $32 million grant from the U.S.”
    — You say “heavily”. What percentage of total revenue does the $32
    million account for?

    “since 2010 the company recieved just 510 orders for its electric
    vehicles, of which only 439 have been built.”
    — The article you cite mentions those are project specific vehicles. There is no mention of how many vehicles were ordered or produced outside of that project. Do you have these numbers?

    And while we are here, you could definitely use an editor.

    “handful of electric vehicles at an extremely high just isn’t a sustainable business
    model.”
    “So what the hell happened happened?”
    “company recieved just 510”

  • Pingback: Why Don’t Commercial Plug-In Trucks And Vans Sell? | Enjeux énergies et environnement()

Back to Top ↑