Can Prodrive win in the unpredictable last-mile van market?

The lure of the profitable van market has burned once high-flying start-ups like Arrival, but the chance to disrupt the old guard by means of electrification is still pulling in new players, who are eyeing up the 'last-mile' market in particular. The latest to jump in is storied engineering company Prodrive, which has formed Elm Mobility with UK design company Astheimer to put the Elm Evolv small electric van into production from 2028. 'Last-mile' is defined as the final stage in the delivery process from a logistics hub to your door. Because this is predominantly urban, it opens up the market to a huge range of vehicles, from cargo bikes to full-size vans, depending on the bulkiness of what needs to be delivered. Linking them all is the need to go electric, as both city and national legislation push operators to become zero-emission. Elm Mobility reckons it has found an unserved middle ground between the two extremes of costly, over-large vans and low-protection, low-payload cargo bikes. The 3.2m-long, single-seat Evolv will be built under the L7e quadricycle regulations and has a planned range of 100 miles. Weight is just 850kg with batteries, but it can carry 500kg in two roomy load areas. “The market isn’t very well served. Operators are either misusing diesel or small electric vans or using these sort of golf-cart-derived small vehicles, which aren’t fit for purpose, ” Iain Roche, CEO, Prodrive Advanced Technology, told Autocar at the vehicle’s official unveil at the Cenex LCV show held on Wednesday at Millbrook. Elm’s target price of £25,000 puts the Evolv in a different strata to the enclosed versions of electric cargo bikes, which cost around £15,000, but below small vans such as the Renault Kangoo E-Tech, which is pushing £35,000 (all prices are ex-VAT). The danger for Elm is that electric last-mile is probably the most unpredictable vehicle market on the planet. Kia, for example, is holding back on developing its smallest last-mile PV1 van, shown as a concept in January along with a range of larger electric vans scheduled for launch starting next year. “That’s still under evaluation,” Pierre-Martin Bos, Kia's PBV director for Europe, told Autocar in July. “There's been a lot of concentration on the last-mile delivery. In fact, everybody now speaks about last-mile delivery, but it's only 20% of the [van] business.” Elm is banking on the main players not paying much attention. “The volumes are a little bit too small for the big manufacturers,” said Roche. “But for the small start-ups, it's a little bit too big. Customers need the quality and sophistication that you only get from work of a larger brand.” But Elm is being pressed on all sides. Van-box cargo bikes from the likes of EAV, Pashley and Fernhay are attractive to dedicated urban-friendly delivery companies like Fin but also for giants like DPD and Amazon. Delivering this way is very cheap: riders don’t need a driving licence, so they can be paid less, and the swappable batteries cost peanuts to recharge. Amazon has pledged a five-year, £300 million investment into electrification of its delivery fleet in the UK, including cargo bikes for city centres operated out of ‘micromobility hubs’. As of last year, it had more than 50 of these hubs across Europe. Electric cargo bikes have downsides in that they need pedals to qualify as electrically assisted pedal cycles (EAPCs) and riders actually have to use those pedals to unlock electric assistance up to a maximum speed of 15.5mph. They’re also limited to 250W (0.3hp) and therefore are naturally restricted on payload. The regulations could change, though. The UK government is currently consulting on whether to overhaul what many feel to be outdated EAPC legislation. One proposal, for example, is to double the maximum output to 500w, as well as doing away with the need for pedals. So, what is currently quite a restricted category could suddenly open itself up to nimble last-mile vehicle companies and fuel further competition for the likes of Elm. In 2022, the previous government proposed a new low-speed, zero-emission vehicle category called LZEV, and George Beard, head of new mobility at TRL (formerly the Transport Research Laboratory), reckons it should be revived. “You can have quite an open category. Whether it has pedals or not has no bearing on its safety,” he told Autocar. “It’s about trying to transform our behaviour and incentivise as much as possible the use of zero-emission [vehicles].” It’s not just the cargo bikes that threaten the business model of Elm, which has received funding from the government-backed Advanced Propulsion Centre (APC) in the hope that it will turn into a viable UK-based manufacturing business. There’s also the threat of cheap Chinese competition. Right now, UK businesses can buy the DFSK EC35, a 4.5m-long small electric van with a quoted range of 166 miles and double the payload of the Evolv, for just £20,999. The French meanwhile are kings of the quadricycle, and available right now is the 3.6m-long Goupil G4 van for £26,000 with a 51-mile range (from a lead-acid battery; a lithium ion one is an option) and a 1022kg payload. Renault is eying the market with the 2.54m-long Bento quadricycle, a version of the Twizy-replacing Duo. In Germany, B-On is looking to parlay its purchase of DHL’s failed StreetScooter electric van business into full last-mile vehicle business and is preparing to launch its next-generation modular EV architecture on which to build a small van “for urban mobility”. Furthermore, by the time the Evolv comes to market in 2028, the category could have begun its predicted shift to autonomous vehicles. Kia believes that autonomy will be necessary for its PV1 van whenever it arrives, while small delivery robots are already on pavements. Serve Robotics is now expanding the Los Angeles roll-out of its pavement robots with help from lidar units supplied by Ouster. “They've been at a smaller pilot stage for a long time and now they've made the leap to a 2000-unit expansion of their business. 2000 units is nothing to sniff at,” said Ouster CEO Angus Pacala recently. Meanwhile in Milton Keynes, Starship autonomous delivery robots have been running since 2018. Drone delivery is another future last-mile possibility. City legislation right now is focused on driving out ICE vehicles wherever practical in a bid to clean up air quality. Next on the agenda is road use. Both are popular with urban voters. “At the moment, cities are geared more towards cars, both driving and parked,” TRL’s Beard said. “I think that balance of space allocation is going to change as well.” That gives last-mile van developers another headache: will my vehicle be allowed in cycle lanes? Will it need to be smaller? Lighter? Lower-powered? To win in this least predictable of vehicle markets, you need to be as nimble as possible.