Smith Electric Vehicles, which makes a range of electric vans based on the Ford Transit, has abandoned plans to develop a smaller van based on the Transit Connect.

The move means it will not be making an electric van smaller than the Transit, which is marketed as the Smith Edison

Several UK and European fleets had already placed early stage orders for the new small van.

These fleets will now by offered larger alternatives already in production.

Smith said the decision not to develop the small van was based on several reasons.

“The level of investment was too much,” said a spokesman. “The figures just didn’t stack up.”

In addition, he said support for developing larger electric vans in the US means it was unwise to plough funds into a small van.

Earlier this year Smith’s US operation won $10m in grants from the US government to speed the process towards volume production and to build a demonstration fleet of larger electric vans.

In addition, Smith has just agreed a partnership with AM General, which makes military and commercial vehicles, to develop a prototype electric post van for the US Postal Service.

As a result, it took the decision to abandon the Connect project.

“In light of the swift growth in demand for the production-ready Newton, Smith has mutually agreed with Ford to terminate its development project with Ford of an electric car-derived van based on Transit Connect,” said Smith in a statement to investors.

“In the short to medium-term, forecast volumes did not justify the investment requirement and limited the working capital available.”

The decision to drop the Connect development programme does not affect Smith’s standing with Ford of Europe.

“We are still Ford of Europe’s official electric vehicle collaborator,” the Smith spokesman said.

“Fleets running our vans can be assured that it is business as usual, they are not affected by this decision.”

The news has come just days before Smith signs an agreement to supply 50 Edison electric vans – its biggest order to date - to a major UK fleet.

In North America, Ford still intends to launch its own electric version of the Connect.