Deutsche Post DHL Group subsidiary StreetScooter and the Chinese car manufacturer Chery will be setting up a joint venture to build and sell electric delivery vans in China. The two companies signed a corresponding letter of intent during German Chancellor Angela Merkel’s trip to China.
According to the German postal services Group, the aim of the cooperation is to jointly develop an electric commercial vehicle specifically for the Chinese market and other selected countries. This includes local production and procurement as well as nation-wide sales and service. The letter of intent provides for a step-by-step entry into the Chinese market for electric commercial vehicles; series production with production capacities of up to 100,000 electric vehicles per year planned for 2021. This is a massive expansion considering that their total European production capacity amounts to around 20,000 vehicles per year.
Deutsche Post DHL Group expects a total investment of up to 500 million euros in the new project. Although StreetScooter has been searching for a primary partner for their company, the joint venture with Chery is apparently not that long-sought partner. The German Group has stilled any speculation in that regard by making it clear in their press release about the joint venture that this cooperation is only about market entry in China.
Deutsche Post estimates the market for light commercial vehicles (LCVs) in China at 2.3 million vehicles in 2025, of which more than 900,000 will be electric. “This significant growth will make China, followed by Europe and the USA, the world’s largest market for electric commercial vehicles,” the Group said.
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Chery is already one of the largest manufacturers of electrically powered commercial vehicles today. Deutsche Post claims that the Chinese company already has a market share of 20 per cent in this segment. “Entering the Chinese market is an important milestone in the young history of StreetScooter,” says CEO Jörg Sommer. “Together with our partner Chery, we are very much looking forward to developing the largest market for electric commercial vehicles, introducing our energy, logistics and fleet solutions and localising the added value.”
The two partners have identified large fleet operators in the areas of last-mile delivery and e-commerce as potential customers. In order to exploit the “great sales potential”, the joint venture is planning regionally adapted versions for the jointly produced electric delivery vans. For this reason, the new joint venture intends to establish a research centre where e-LCV components, technology, vehicle architecture & design, autonomous logistics and energy solutions will be developed to meet the needs of the market.
In addition to China, StreetScooter is now also active in Japan: in the spring, the German manufacturer entered into a cooperation agreement with Yamato, a parcel delivery company. The Japanese ordered 500 E-LCVs from StreetScooter.
It seems StreetScooter is being hurtled into international markets although the company was only founded to satisfy a market deficit in Germany, where, despite being the country of carmakers, none of the main manufacturers at the time had an electric van in serial production. By taking the initiative, Deutsche Post has inadvertently also addressed a pressing international need. Now Deutsche Post DHL is obviously aiming to produce the electric transporter in the USA as well as the latest China deal for the StreetScooter.
“Next year we are also planning initial pilot projects in the USA, especially on the West and East coasts, with the aim of establishing local production facilities there especially for the U.S. market,” a DP DHL Group representative told US publication FreightWaves. “At present, however, it is too early to talk about concrete details and partnerships. The focus is first and foremost on the expansion in China.”
Another stroke of fortuitous good planning is that StreetScooter also recently announced that they are developing a hydrogen fuel cell van, for the advantage of longer ranges – in this case, 500 km-range – without extra battery weight and bulk and a diversificaiton of source materials. Although this aspect was not mentioned in the Groups announcement, this is potentially of huge advantage to the German Group, since China just announced a push for fuel cell vehicles, with particular focus on commercial vehicles.
An enviable position indeed.