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Clean Vehicles

The Electrification of Transport Is Happening in Odd and Interesting Places

A yard truck moves a trailer at Orange EV’s headquarters in Missouri.

(Bloomberg) —

Some of the best zero-emission solutions are hidden from public view. One of them is a weird-looking, one-trick pony called a yard truck.

“They have a lot of different names: yard dogs, mules, switchers or spotters,” said Kurt Neutgens, chief technology officer of Orange EV, a Kansas City, Missouri-based company that manufactures yard trucks for warehouse operators, including companies like DHL. 

The yard dog’s job is simple: It moves trailers from a warehouse where they are filled up to its parking lot, readying each trailer to be attached to a fossil fuel-guzzling semi-truck and moved around the country. Almost every one of the tens of thousands of warehouses in the US has yard dogs, typically between two and 10 units, and almost all of them run on diesel.

Neutgens, a former Ford auto engineer, wanted a better solution. “I did math models of every vehicle type out there,” he said, trying to suss out if an electric model would be economically feasible. As it turns out, an electric yard truck “made sense financially and technologically from the get-go 12 years ago,” he said. “It was ready.” So in 2012, Neutgens and friend Wayne Mathisen pooled $50,000 of their savings to launch Orange EV. Mathisen is now chief executive officer.

Convincing warehouses to switch to electric wasn’t as easy. First, the upfront cost of an Orange EV yard dog is $200,000 or $300,000, depending on the battery size, compared to diesel varieties that cost about $100,000. Second, no one had used an electric one before.

Mathisen had longer-term economics on his side. Even at pre-pandemic diesel prices, he says Orange EV’s yard dogs can save $50,000 each year in fuel costs alone. Orange EV also built proprietary charging equipment that makes it possible to charge the trucks during drivers’ breaks.

In 2015, with five employees, Orange EV sold its first unit. Marketing and word of mouth helped grow the company, and Mathisen says the company was profitable by 2016. This year, Orange EV has 170 employees and will sell 200 yard dogs, each of which avoids 1,700 tons of CO2 emissions. The drastic reduction in air pollution from avoiding burning diesel brings additional benefits to warehouse employees.

Already, some US states are offering subsidies for electric yard dogs — as much as $150,000 per unit — which makes the switch a no-brainer if a warehouse can handle the upfront investment to replace the entire fleet. But Orange EV says it doesn’t need to rely on the subsidies: More than 60% of its sales last year didn’t include them. The competition is also taking notice, as TICOAutocar and other makers of diesel-powered mules announce electric versions. 

To fuel its own ambitions, Orange EV announced today that it has secured $35 million from S2G Ventures — its first large outside investor. Some 5,500 yard trucks are sold in North America annually, and Orange EV’s goal is to make as many as 1,500 units a year. That sum won’t be enough money to fund a new factory entirely, but it will be enough to get the company to the next stage before it has to raise more money.

And why orange? “Everything back then was green, green, green. Our philosophy was: ‘You’re going to buy this because it’s a better truck.’ We wanted to get away from: ‘You’re going to buy this because it’s good for the environment,’” said Neutgens. “But it’s also a great standout color. We didn’t have a whole lot of marketing dollars, so we thought it was probably good that everybody noticed our trucks.”

To contact the author of this story:
Akshat Rathi in London at arathi39@bloomberg.net

© 2022 Bloomberg L.P.

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