Chicago voucher plan lands electric-vehicle maker’s plant
BY FRAN SPIELMAN City Hall Reporter email@example.com November 27, 2012 10:30AM
This all-electric FedEx Express Step Van, produced by Smith Electric Vehicles runs on an energy source that Mayor Rahm Emanuel wants to implement for government and private company fleets to convert to. | Photo by Scott Hepler
Updated: December 29, 2012 6:17AM
A company described as one of the world’s leading manufacturers of all-electric commercial vehicles has agreed to open a Chicago plant creating up to 200 new jobs thanks, in part, to a $15 million city incentive plan tailor-made to boost the market for electric trucks.
Smith Electric Vehicles chose Chicago as its third U.S. location after Mayor Rahm Emanuel disclosed plans to use a federal anti-pollution grant to create more customers for the batteries and electric vehicles that Smith Electric plans to manufacture here.
President Barack Obama had his “cash-for-clunkers” program. Now, Emanuel has what might be called “death-to-diesels:” a voucher program to reward private sector companies that agree to convert their pollution-belching fleets of diesel trucks to cleaner electric vehicles.
Fleets operating in all six Chicagoland counties — Cook, DuPage, Kane, Lake, McHenry and Will — will be eligible for vouchers “applied to the purchase price” of a truck “at the point of sale — whether at a dealership or through a manufacturer,” officials said.
Voucher size would be based on the size of the truck battery, with the subsidy covering roughly 60 percent of the price differential between cheaper diesel truck and a more expensive electric truck. For a $75,000 truck with an 80 kilowatt-hour battery, the city voucher would be $45,000, officials said.
The Emanuel administration expects to issue roughly 250 vouchers after a spring solicitation.
In a telephone interview Tuesday, Smith Electric CEO Bryan Hansel said the voucher program was key to the company’s decision to open an electric vehicle manufacturing facility in Chicago.
Smith Electric plants in Kansas City and New York City produce trucks for major companies across several industries, including Coca-Cola, FedEx, Staples, TNT, DHL, the U.S. Military and PepsiCo’s Frito-Lay division.
The company is working with City Hall to scout sites for its Chicago plant, Hansel said, refusing to say whether a city subsidy would be tied to the deal.
“Chicago is a great market for us based on population and density [that] lends itself to short routes for deliveries appropriate to our technology. But our customers will follow the incentives, if available. People take free money when it’s offered,” he said.
“FedEx can put a truck any place in the country. Our large national customers have the option to place them anywhere. Certainly, incentives will drive demand. Our strategy is to build the trucks local to the demand
. . . We feel confident in the demand because of the way the city has chosen to be a leader in electrification by putting forward incentives.”
In a news release, Emanuel hailed Smith Electric as an “innovative company in a dynamic, forward-looking industry” — a potent combination that exemplifies Chicago’s dynamic economic future.
“I’m proud to welcome another growing company with a great mission to Chicago. Soon, hundreds of Chicagoans will be able to put their skills to use providing businesses worldwide with high-quality, zero-emission, American-made vehicles,” the mayor was quoted as saying.
Emanuel touted the vouchers as a “creative way” to simultaneously achieve sustainability and business goals.
Transportation Commissioner Gabe Klein added, “By offering a voucher at the point of sale, rather than a post-sale rebate, we hope that more companies will be encouraged to participate.”