As demand has increased for its all-electric vehicles, Smith Electric Vehicles U.S. Corporation says it is ramping up its production capabilities. Built upon a decentralized manufacturing strategy, the company plans on adding manufacturing plants in each major urban market, starting with one in the fourth quarter of 2010, followed by another in the first quarter of 2011, according to CEO Bryan Hansel.

One of the new facilities will be on the West Coast, while the other will be built on the East Coast, Hansel added. Currently, the trucks are built in a large facility on the Kansas City International Airport site in Kansas City, Mo., which used to be an aircraft engine refurbishing facility. However, by the end of 2011, Smith Electric hopes to have five manufacturing facilities nationwide.

The company believes in localizing manufacturing in areas where the trucks will be deployed, to provide fleets with service, parts and sales. This also shows the company's commitment to those markets and to helping fleets keep these trucks running long term, Hansel says.

One Year Ago

The U.S.-based Smith Electric, which has moved to purchase the U.K. operations, is coming up on its one-year anniversary when it took control of the Kansas City factory. The first trucks started rolling off the assembly line in December. At the beginning of the year, the company was building two trucks a week. Now, Smith is rolling out 10 trucks a week.

Smith Electric produces the Newton, an all-electric medium/heavy-truck that delivers a top speed of 50 mph and offers end users battery ranges from 50 to 120 miles on a single charge. It operates at peak effectiveness in urban applications that demand heavy stop and go driving. A single overnight charge provides more than enough range for most urban delivery routes.

Increased Demand

Hansel says the electric vehicle maker now has sizable orders coming in, with demand outweighing supply, hence the production ramp-up. "We're not worried about sales," he says.

One thing that may be driving demand is the significant decrease in cost of the vehicle. The Smith Newton started at about $150,000 a pop; now it's down to $85,000 to $90,000, compared to a diesel equivalent of about $60,000, Hansel says. While there's still a bit of a upcharge, Hansel says fleets can experience a return on investment from fuel and maintenance savings within three to four years. And they'll use it for at least 10 years.

In addition, the company has sensed that fleets don't believe diesel is a long-term solution, with legislation and other pressures to reduce truck emissions. In evaluating other alternatives, some fleets have found that hybrid technology does not fit with their duty cycles, and compressed natural gas is expensive, Hansel says.

With electric vehicles, fleets already have the infrastructure in place to charge them, and the vehicles are more consistent with their duty cycles. "That predictability makes it a great fit," Hansel says. Electric vehicles also provide operational savings; fleets can operate them at a fraction of the cost.

The Demonstration Program

President Obama recently paid a visit to Smith's headquarters to discuss the state of the economy and jobs. The Department of Energy awarded the company a $32 million grant to help offset future vehicle development costs and incentivize customers to participate in a commercial electric vehicle demonstration program.

The program will gather data on 500 vehicles placed in service in different regions of the country and in a broad range of applications. Participating customers will receive a subsidy from the program for allowing their vehicles to be part of the demonstration fleet.

"The $32 million in DOE funding is a game changer for our business, as it is for the wider industry, allowing us to rapidly scale up production, drive down costs, increase demand and create more high-quality manufacturing jobs," Hansel said.

"The best way to understand this truck's capabilities is to get in and drive it - and this grant will give more potential customers that opportunity. By eliminating concerns over fluctuating fossil fuel prices, commercial electric vehicles give business owners unprecedented cost certainty as they look toward managing the next five-to-ten years of their fleets."