By Paul Lienert
DETROIT (Reuters) -Michigan-based Shyft Group, a multi-brand manufacturer of medium-duty specialty vehicles, is preparing to launch production this fall of a new line of electric trucks and vans under the Blue Arc brand.
"That's our wheelhouse - it's a segment we know and understand," Chief Executive Daryl Adams said in an interview.
Shyft is entering a small, but potentially lucrative, sector in which commercial trucking customers are starting to inquire about medium-duty electric vehicles. It expects to compete against startups such as Arrival SA and established manufacturers such as Daimler (OTC:MBGAF) Trucks with its new Rizon brand.
Shyft said it plans to start pilot production this summer of its first Blue Arc vehicle, a step-in van, in Charlotte, Michigan, not far from its Novi headquarters.
The former Spartan Motors (NASDAQ:SHYF), which has built everything from fire trucks to motorhomes, in recent years has focused on a variety of medium-duty vehicles for commercial fleets. The new Blue Arc series of Class 3 to Class 5 vehicles was a logical extension, joining such familiar Shyft Group brands as Utilimaster, Builtmore and Duramag.
"We knew the traditional manufacturers would have their EVs in the (light duty) Class 2 space," Adams said. "We also knew that in (heavy duty) Class 6, 7 and 8, Peterbilt, PACCAR (NASDAQ:PCAR), Navistar (NYSE:NAV), they're all going to have theirs eventually, so we stayed in our lane."
Adams said his team could not find an appropriate electrified medium-duty chassis from traditional suppliers such as Ford Motor (NYSE:F) Co and Freightliner, and small electric "skateboards" from EV startups were not rugged enough. So he elected with Blue Arc to marry the company's own chassis building experience with that of its Utilimaster body and upfitting experience.
"The potential volume in the 'walk-in' vehicle space isn't that big," Adams said. "There's a lot of variety there, but not a lot of volume. So the key for us is partnering, which we've done with high-quality automotive suppliers like Dana, Bosch and Akebono."
With the Charlotte plant slated to begin regular production this fall of Blue Arc vehicles, Adams said the plan is to build 200 this year, growing to 2,500 in 2025. By then, Adams said he expects the Blue Arc business to account for around $500 million in sales, or roughly a third of the company's revenues.
Already, one of Shyft Group's largest dealer/distributors has placed an advance order for 2,000 Blue Arc vehicles, according to Adams.
"Our differentiator is that we have knowledge of the customers, and we have operational experience," Adams said. "I like to say we're the 'anti-startup.'"