MoU between StreetScooter and automobile manufacturer Chery Holding Group sees mass production planned for 2021 with annual production capacity up to 100,000 electric vehicles.
Deutsche Post subsidiary StreetScooter and Chinese automobile manufacturer Chery Holding Group have agreed to form a joint venture for the mass production of electric delivery vehicles for the international and Chinese markets.
The two companies said they “plan to develop an electric light utility vehicle for the international market in selected countries”, with the project including local manufacturing and sourcing as well as nationwide sales and service.
“As outlined in the memorandum, the entry of electric light commercial vehicles into the Chinese market will be gradual,” the companies said. “Mass production is scheduled to begin in 2021 with production capacities of up to 100,000 electric vehicles per year.”
Anticipating a total investment up to €500 million, the new joint venture intends to target major fleet operators in the areas of last-mile delivery and e-commerce as potential customers. Chery is one of China’s leading automobile manufacturers, with a 20% market share in the electric commercial vehicles sector.
The market entry of StreetScooter in China continues the internationalization of the company after the strategic cooperation with the Japanese logistics company Yamato.
The agreement establishing a joint venture between the two companies was reached during German Chancellor Angela Merkel’s trip to China. The memorandum was signed by StreetScooter CEO Jörg Sommer and Chery Holdings chairman Yin Tongyue, in the presence of the heads of both the German and Chinese governments in the Great Hall of the People in Beijing.
“This production and sales agreement is a major milestone in our company’s, as yet, short history,” said Sommer. “We’re thrilled about the upcoming collaboration with our partner Chery and this opportunity to open up the world’s largest market for electric light commercial vehicles, introduce our energy, logistics and fleet solutions and create a local source of value creation. StreetScooter now has a commercial presence in Japan and China, the two most important national economies in Asia.”
Yin outlined the strategic importance, noting: “The strong cooperation between Chery and StreetScooter will create opportunities for both parties to explore the global market, especially in the EU and China. It will also help Chery to further accelerate the development of innovative solutions based on new energy and smart interconnection and therefore surpass traditional fuel vehicles.
“Chery will actively integrate the global unique resources and know-how through open cooperation and customer centric unique-selling-propositions and offerings.”
The joint venture also aims to establish a location for research and development in China, focusing on developing eLCV components, technology, vehicle architecture and design, autonomous logistics and energy solutions.
The Chinese market for light commercial vehicles is expected to reach 2.3 million trucks by 2025, over 900,000 of which are forecast to be electric. Such rapid growth will make China the largest market in the world for electric vehicles of this kind, followed by Europe and the US, the companies said.
“Market growth is being driven by numerous factors: Urbanization, rising transport volumes in downtown delivery traffic (last mile), related municipal rules and regulations on vehicle emissions, and new mobility, logistics and energy solutions.”
The “major sales potential” for the soon-to-be jointly produced electric vehicles will be met via a regionally tailored version of the StreetScooter products and services, the companies said.
StreetScooter was fully acquired by Deutsche Post DHL Group in 2014 and is currently a market leader in electric light commercial vehicle production – with more than 12,000 vehicles in daily use and a track record of over 100 million kilometres driven and 36,000 tonnes of CO2 savings. StreetScooter has also electrified more than 700 depots and installed more than 11,000 charging points for small and large fleet operators.
The company said it is “transforming itself from an electric vehicle manufacturer into one of the leading global energy and logistics platforms for the last mile”.
Chery Holding Co. is an automotive specialist that has sold almost 8 million passenger vehicles. And exported more than 1.5 million units, ranking as China’s top exporter of passenger vehicles for 16 consecutive years.