By Fleet Management Weekly Staff
July 10, 2024
In an ideal world, it would be cheaper to buy an electric vehicle than an ICE vehicle. In reality, most fleet managers must balance higher acquisition costs with long-term savings to justify electrification. This usually results in a patchwork of electrification where fleets replace their ICE vehicles one by one, beginning with the most accessible cars to electrify and increasing the number at a rate they can afford. The first vehicles targeted usually include passenger vehicles and long-haul trucks, where the market currently justifies the cost of the technology.
Harbinger sees things differently. This startup, based in Southern California, is an electric truck manufacturer whose focus is not on the long-haul trucks that have captured the attention of most fleets but on medium-duty vehicles such as walk-in vans, box trucks, and recreational vehicles. By focusing on modernizing the medium-duty vehicle market, Harbinger is creating EVs with superior performance and durability at the exact cost of gas and diesel vehicles.
John Harris
“Harbinger was set up with a particular goal in mind: to electrify the medium-duty segment,” says John Harris, CEO and Co-founder of Harbinger.
Medium-Duty EV Opportunity
Harris co-founded Harbinger with CTO Phillip Weicker and COO Will Eberts. Leveraging their knowledge of electrification, the three men saw an unusual opportunity within the medium-duty EV market.
“Within this segment, there’s a unique convergence of costs and operations that happens to line up perfectly,” says Harris. “That means that when we take almost any medium-duty vehicle on the road today, we can replace it with an electric vehicle and not have any disruptive impact on how that vehicle operates.”
With a passenger car, transitioning from gas or diesel to electric isn’t always the best fit. After all, while most EVs are great for a commute to and from work or the occasional trip around town, their range limitations can make them ill-suited for longer road trips where the existence of battery charging infrastructure isn’t always guaranteed.
“Medium-duty vehicles are used quite consistently,” says Harris. “They’re used by commercial operators on fixed routes with a typical range, payload, and operational frequency. That happens to align well with the EV technology available to us today. So, when you look at the whole fleet, you can identify which percentage would be perfect EVs and replace them in a way that has no negative impact on those vehicle operations. And because we’re replacing it with something that meets those needs so effectively, we can do so with only upside impacts on costs.”
A Unique Approach to Electrification
Most of Harbinger’s competitors in the electric space aren’t building technology but operating as system integrators who bring together outside components. This results in high sticker prices due to the number of outside parts that each have their own profit margins. By manufacturing the entire design of their vehicles themselves, Harbinger is more on par with manufacturing companies like Ford and Freightliner. However, neither company is tackling the electric vehicle space like Harbinger.
“The big difference at Harbinger is that we take commodity products here and build EV components out of them,” says Harris. “We take copper, and we build drive units. We take battery cells, and we build battery packs. That’s unique in electric trucking.”
Harbinger manufactures its vehicles at its factory in Garden Grove in Orange County, California. The factory operates three manufacturing lines: one for building chassis, one for building drive systems, and one for building battery packs.
“Our design and manufacturing approach is very tightly coupled,” says Harris. “We’re designing a chassis, a battery pack, and a drive system all simultaneously. All that activity happening simultaneously makes it a bit more complicated. Still, it also means that we can design all those pieces to fit together in the most optimal way possible.”
This is quite different from how the trucking industry generally operates. Most large truck companies acquire a lot of content from major Tier 1 companies, which often means they’re using decades-old technology. Harbinger’s products, however, are designed to take full advantage of modern technology. Their chassis is particularly advanced, with a complete custom Harbinger rear axle and a uniquely integrated steering system.
“When someone’s making vehicles, and someone else is making all the components, it’s straightforward to find yourself in that situation because neither group owns the complete vehicle,” says Harris. “So, we’re trying to take advantage of that simultaneous design to bring in more technology in a way that wouldn’t be feasible with a traditional automotive supplier base.”
Harbinger currently takes a systematic, milestone-driven approach to building vehicles as it works towards commercialization. The company is consistently building to a specific capacity for development and expanding capacity and rate for production builds to scale in the future, aligned to meet customer demand.
“That enables us to keep our capacity, our test and validation maturity, and our customer expectations synchronized a bit tighter than I think most people have been able to,” says Harris.
Critical Benefits of Harbinger EVs
1. Price parity with gas and diesel engine vehicles
For most fleet managers, cost is the number one factor in considering electrification. While many fleets are willing to invest more upfront to gain long-term savings, there is a limit to how much price disparity they’re willing to accept. With Harbinger’s electric vehicles, the price disparity is no longer a factor.
“A vehicle is a tool that needs to have a positive return on investment,” says Harris. “That becomes very difficult if the prices depart significantly from current gas and diesel vehicles. While passenger cars have a long tail on the demand versus price curve, that tail doesn’t exist in commercial vehicles. You might sell some if the vehicle is twice as expensive as the competing vehicle. But if it’s three times as expensive, you’ll sell zero. The customer will look at it and say, ‘I’m running a business–how am I going to justify spending that much money against the amount of output I can get from that vehicle?’”
Harbinger does several things to bring the price of its EVs closer to gas and diesel vehicles. The first is by avoiding margin capture by suppliers. By taking commodity products and both designing and building components in-house, they can avoid all of the profit margins associated with buying complex component systems from multiple suppliers.
“The vehicles get more expensive because all those other suppliers have to increase their profit share as much as possible,” says Harris. “You’ve allowed them to do that by separating so much content.”
2. Lighter and more efficient
Harbinger’s vehicles offer more benefits than just low cost. In addition to the classic benefits of electrification–lower operating costs, easier maintenance, quiet operation, and lack of pollution–Harbinger also makes its vehicles much lighter than other EVs.
“If you have a vehicle that’s a lot heavier than you expect it to be, that means it moves less cargo, and the tool is less valuable,” says Harris. “Then you get back into that whole question of how you make this work financially. So, our vehicles are considerably lighter than vehicles that compete with us in electric trucking, which lets operators use them more efficiently and profitably.”
3. Greater comfort
Harbinger also designs its trucks to be more comfortable for the drivers. Most box trucks are well-known for being difficult to steer and uncomfortable to drive compared to modern passenger vehicles. With a solid steer axle and front leaf spring suspension, the driver feels every bump in the road, which reflects that most trucks generally get their suspension systems from Tier 1 companies like Hendrickson or Meritor.
Harbinger developed a fully independent double wishbone suspension at the front end of its vehicles, resulting in greater ride comfort, handling, and responsiveness. This suspension also reduces the vehicle’s overall weight, making it more profitable for fleets.
“We can do it at zero cost premium to the existing architecture because it’s a lighter overall system, so it has less raw materials involved,” says Harris. “Once we sat down and did that analysis, we saw a great upside for the driver and the vehicle cost. It became kind of a no-brainer for us.”
4. Modular battery systems
Most electric passenger cars have two battery pack options, which generally meet most drivers’ goals of high range and low cost. However, commercial drivers’ needs are much more specific. Harbinger can match the vehicle battery configuration to each customer’s needs, giving them lower costs where they need them.
“When you look at Harbinger’s vehicles, you’ll see a whole bunch of battery packs,” says Harris. “Each battery pack is fairly small at 35 Kilowatt-hours, and we can use three to eight battery packs on one vehicle. That allows the customer more fine-grain control over what they’re buying and allows them to match the vehicle configuration to their route configuration in the most cost-efficient way possible.”
Next Steps for Harbinger
Harbinger recently announced at ACT Expo the contents of its order book, which consists of 4,000 binding vehicle pre-orders valued at over $400 million. This includes a multi-year order from Bimbo Bakeries USA and THOR Industries, the world’s largest RV manufacturer.
“Harbinger has tried to take a very different approach to pre-orders,” says Harris. “There’s been a lot of bad actors in the past: orders that aren’t orders, orders without deposits or with refundable deposits, or orders that are too big to be believable. We’ve seen too many times where an order book isn’t what it seems, so we’ve tried to be proactive in building a high-quality order book distributed across more than a dozen customers.”
Each order carries non-refundable deposits, meaning Harbinger has locked in a purchase commitment across its customer base. The company has plans to begin delivering these vehicles in the fourth quarter of 2024. Meanwhile, Harbinger has a pilot program to deliver vehicles to partners, including THOR Industries and lesser-known dealers. The company has raised over a hundred million dollars in equity thus far, not including any debt accrued. Harbinger plans to use these funds to expand its manufacturing capacity as it fills its pre-orders by the end of the year.
As fleets seek an affordable way to electrify, Harbinger is solving many fleet managers’ problems: how to rectify higher acquisition costs with sustainability goals. By taking a unified approach to designing and building its vehicles, Harbinger is bridging the gap between electric and gas and diesel vehicles.
“The industry is experiencing a lot of disruption right now,” says Harris. “Big OEMs are trying to rewire their internal processes to get away from this mentality that the vehicle is the metal parts, and the software is just something you get from a supplier. They’re coming to grips with the new reality that these vehicles are more complex integrated electromechanical systems rather than just a bunch of steel parts bolted together.”
