USPS Long Life Vehicle - Wikimedia Commons

In the same Tanfield Group trading statement where the company commented on the termination of its agreement with Ford it revealed a new collaboration with AM General. Smith and AM General are developing a prototype battery-powered version of the Long Life Vehicle used by the US Postal Service. The LLV developed by Grumman in the 1980s is based on chassis components from the first-generation Chevy S10 pickup and is currently powered by a GM 2.2-liter EcoTec four cylinder engine. There are currently 178,000 LLVs in service with the USPS.

AM General is building the chassis for the prototype and Smith is providing the electric powertrain. In the urban and suburban environments where the LLV is typically used a limited range electric vehicle of this type would be eminently suitable and could be plugged in nightly at the postal depots. Chrysler earlier this year also proposed an electric version of the Dodge Caravan for the same purpose but we have not heard anything recently on this program. Hopefully, we'll find out something new on this at Chrysler's business plan meeting this week.

[Source: Tanfield Group]


press release

Tanfield Group plc ("Tanfield", or the "Company")


30 October 2009


Trading Update

*

SEV US Corp to develop jointly with AM General, a prototype electric postal delivery vehicle for the US Postal Service
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SEV US Corp customers win additional $4.5m Federal grant funding for 65 Smith trucks through the Clean City Program
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Strong demand for Newton electric truck: SEV US Corp order book now stands 255 trucks
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Tanfield confirmed as largest supplier to UK's Low Carbon Vehicle Procurement Programme
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Renewed focus on production ready medium duty electric vans and light duty trucks (Newton and Edison)
*

Withdrawal from electric car-derived van development : Termination of US Ford Transit Connect project

Tanfield is pleased to announce further developments from its associate company, Smith Electric Vehicles US Corp ("SEV US Corp").

SEV US Corp, together with AM General, a leading manufacturer of military and commercial vehicles, headquartered in South Bend, Indiana, USA, is developing a prototype electric version of the gasoline-powered Long Life Vehicle for the United States Postal Service ("USPS"). There are currently approximately 178,000 Long Life Vehicles in service with the USPS. AM General will manufacture the chassis and SEV US Corp will supply the electric drive train, including the motor, battery pack, electronics and ancillary systems.

Darren Kell, CEO of The Tanfield Group Plc, said: "With AM General we combine a global leader in specialist vehicles with a world leader in electric vehicle integration. The goal is to deliver an electric vehicle that is perfect for the United States Postal Service; a vehicle that is energy efficient, cost-effective, reduces US reliance on oil and lowers greenhouse gas emissions."

As announced on 6 August 2009, SEV US Corp won $10m in grant funding from the US Department of Energy (DoE), to facilitate its growth towards volume production and to build a demonstration fleet of electric trucks. In addition, SEV US Corp customers have been awarded funding for 65 Smith Newton electric trucks, amounting to $4.5m, through the US Clean Cities Program. SEV US Corp is applying for more funding through the US Government "green vehicles" programmes.

SEV US Corp has commenced production of the Smith Newton electric truck platform at its assembly facility in Kansas City, Missouri. Appetite for the Smith Newton truck is strong in North America and SEV US Corp now has an order book of 255 trucks.

In light of the swift growth in demand for the production ready Smith Newton, SEV US Corp mutually agreed with Ford to terminate its development project with Ford of an electric car-derived van based on Transit Connect. In the short to medium term, forecast volumes did not justify the investment requirement and limited the working capital available to support the growth of Newton. SEV US Corp believes that investing in the existing Smith platforms represents a better use of its financial resources, allowing it to take full advantage of a potentially very sizeable market and to gain market traction more quickly. It was concerned that the market for electric car-derived vans would become increasingly competitive. In North America, Ford still intends to launch its own electric version of the Connect.

In other markets, the Board of Directors believes that the best strategy going forward for the Company is to focus on preserving and enhancing Tanfield's market-leading position in the medium-duty commercial vehicle sector, through its many variants of Newton truck and Edison van platforms. Tanfield remains Ford of Europe's official collaborator on commercial electric vehicles, initially focused solely on the Ford Transit platform, which is marketed as the Smith Edison.

Whilst consolidating its market-lead position in this sector, Tanfield continues to pursue an order for the delivery of over 50 Smith Edison vans with a leading UK retailer. Additionally, Tanfield is now confirmed as the largest supplier to Phase One of the UK Government's Low Carbon Vehicle Procurement Programme. Tanfield will supply a total of 57 Smith Edison vans in the first phase.

Darren Kell added:

"Tanfield is gaining real traction with its core products in the electric van and truck sectors across the world"

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