A young start-up founded in Vancouver and financed largely by Quebec investors offers the province’s SMEs a turnkey formula that allows them to acquire their first electric commercial vehicles at low cost. Is it too good to be true?
The 7Gen company took advantage of International Electric Vehicle Day on September 9 to formalize its first delivery of ten BrightDrop electric vans to SherbVert Services. Ten vehicles is not a lot, but it possibly makes this Goosmall family parcel delivery business from the Eastern Townships the owner of the largest fleet of zero-emission vans in the province.
Electrifying SMEs
Above all: this is the first in a series of agreements of this type that 7Gen hopes to confirm in Quebec in the coming weeks. The company founded in Vancouver and present in Montreal has already reserved nearly 400 BrightDrop electric trucks. Each of these vehicles is powered by an electric group which gives it 400 kilometers of autonomy per charge, in good weather.
There are benefits to rapidly electrifying the semi-heavy commercial vehicle market (medium duty). First, a commercial van with a combustion engine emits up to 20 times more greenhouse gases into the air than a light vehicle. Then, the high price of fuel weighs on the finances of the smallest Canadian SMEs.
General Motors, the auto giant that assembles BrightDrop at its Ingersoll, Ont., plant, promises savings of $10,000 a year. This is the fuel and maintenance costs saved thanks to electric motorization. The price of the vehicle itself is higher than that of a comparable gasoline or diesel vehicle, but fairly significant purchase aid (they can reach $40,000 in some cases) helps to offset this additional premium.
All of this, obviously, requires having access to charging stations at the right time, and in the right place. And this is where 7Gen comes in: it supports interested SMEs in the acquisition and management of their fleet of electric vehicles.
“We bring technical and logistical know-how,” explains Duty 7Gen’s vice president of marketing and business development, Frédéric Bel. “Which vehicle and terminal to buy, what type of maintenance will be necessary and how to manage it all. »
“We also offer a leasing rental model. We offer to lease the vehicles and infrastructure, and in five or six years, the company will be able to own its equipment. This allows you to spread the investment over time and start saving on fuel immediately. »
Soon 400 electric vans
7Gen was founded in Vancouver in 2020. The company initially received $20 million from American investors. Then, in 2022, it raised 8 million from two investors: the FTQ Solidarity Fund and the German industrial giant Siemens. Its objective is to accelerate the electrification of the Canadian semi-heavy commercial vehicle segment. This is a somewhat neglected niche in the energy transition of the North American automobile fleet.
The money 7Gen received allowed it to pre-order 135 BrightDrop vans last year. A second order for 250 vehicles was placed this year. These vehicles will likely be delivered in 2024.
To make it more attractive, 7Gen offers a rental formula to its customers which makes the transition easier to initiate. “Change is always annoying for an SME,” says Frédéric Bel. We try to make it as smooth as possible. Taking into account direct and indirect public aid, the monthly payment for electrifying vehicles becomes lower, especially thanks to the difference in the price of energy. Electricity is at least 80% cheaper than gasoline or diesel. »
The Canadian startup adds a software solution to vehicles and terminals that it sells under license. This is where it generates its own income, even if it remains low for the moment, concedes its vice-president. “At this stage, we remain a start-up who wants to seek growth rather than finding profitability at all costs,” he says.
The support of Siemens is not negligible. The German equipment manufacturer is proceeding in the same way elsewhere in the world to accelerate the electric transition of commercial transport. Siemens has developed infrastructure and financing services that specifically target businesses in various industries: delivery, utilities, retail, etc.
On the side of the Solidarity Fund, we highlight the possible connection between what 7Gen offers and the needs of at least some of the 3,400 SMEs that make up its investment portfolio. “The Fund invests in companies like 7Gen because they help accelerate the reduction of greenhouse gases,” explained Dany Pelletier, the Fund’s first vice-president of private placements and impact investments, last summer.
