StreetScooter of Germany and Chery of China last Friday established a joint venture to develop an electric light commercial vehicle (eLCV) for the international market in selected countries.
The project will include local manufacturing and sourcing in China as well as nationwide sales and service. This marks the entry of eLCVs into the Chinese market, with mass production set to begin in 2021 and production capacity of up to 100,000 eLCVs per year.
The perspective total investment for the joint venture is estimated at about 500 million Euros.
The joint venture was formed through a memorandum of understanding (MoU) that was reached during German Chancellor Angela Merkel's trip to the Mainland. It was signed by StreetScooter CEO Jörg Sommer and chairman of the board of Chery Holdings Yin Tongyue, witnessed by the heads of both the German and Chinese governments in the Great Hall of the People in Beijing.
"The strong cooperation between Chery and StreetScooter will create opportunities for both parties to explore the global market, especially in the EU and China,” Yin said.
He added 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 is one of China's leading automobile manufacturers, with a 20% market share in electric commercial vehicles sector. Chery is expanding its scope of mobility within the high promising segment of eLCVs and micro e-mobility solution.
On the other hand, StreetScooter is a subsidiary of Deutsche Post and a leading manufacturer of eLCVs.
“We will actively integrate the global unique resources and know-how through open cooperation and customer centric unique-selling-propositions and offerings,” Yin said.
Establishment of an R&D facility
The joint venture between Chery and StreetScooter 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.
According to both companies, the soon-to-be jointly produced electric vehicles will be offered by a regionally tailored and homologated version of the StreetScooter products and services. The new joint venture will target major fleet operators in the areas of last-mile delivery and e-commerce as potential customers.
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 USA.
Market growth is being driven by numerous factors: urbanisation, rising transport volumes in downtown delivery traffic (last mile), related municipal rules and regulations on vehicle emissions, and new mobility, logistics and energy solutions.
StreetScooter eyes global market
The market entry of StreetScooter in China continues the internationalisation of the company after the strategic cooperation with the Japanese logistics company Yamato.
"This production and sales agreement is a major milestone in our company's, as yet, short history," said Sommer of StreetScooter. "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.