Refrigerated trucks may give Singapore startup edge into China EV market

CreateAl Holdings

18/09/2023 08:56

By Kevin Krolicki, Chen Aizhu
       SINGAPORE, Sept 18 (Reuters) - Fully electric
refrigerated trucks for delivering food and pharmaceuticals are
expected to give a Singapore-based startup the edge to crack
into the crowded Chinese electric vehicle (EV) market.  
    Singauto Technology will unveil its first EV cold storage
truck model at an event in Beijing on Tuesday where it will
announce pricing, company founder Liu Yuqiang told Reuters last
month, adding it has completed an initial funding round of $20
million from investors. 
    A viable cold storage electric vehicle could be a lucrative
niche for Singauto inside the Chinese EV market, the world's
largest. The cold-chain logistics market is dominated by
internal combustion vehicles, partly because refrigerating the
cargo consumes so much of the power from the battery that the
range of electric versions could be limited.
The constraint has slowed the adoption of pure electric trucks
by cold-chain fleet operators, though automakers including Geely
 GEELY.UL  and Toyota  7203.T  offer hybrid models and
hydrogen-powered trucks as alternatives.
    Singauto, however, is betting that as China's
hyper-competitive EV industry has become more efficient, the
company can develop its refrigerated trucks in a shorter time
and that favourable policies such as restrictions on internal
combustion engine trucks in major cities would spur demand for
pure electric vehicles.
    The company already has 20,000 pre-orders for its new truck,
the S1, including from Qingdao Linking Fresh Supplying Chain,
and would target the small but fast-growing market for EVs in
Southeast Asia, said Liu.
    The S1 will have an 85 kilowatt-hour battery supplied by
China's CATL  300750.SZ , the world's largest battery maker,
designed to provide 270 km (168 miles) of range when the truck
is fully loaded, the company says.
    Liu said Singauto can turn profitable with sales of 30,000
trucks, in part because it has outsourced the design,
engineering and manufacturing of the vehicle.
    Shanghai Launch Automotive Technology, also known as Launch
Design, has designed and will source components for the S1, as
well as building the vehicle and future planned variants,
including a smaller EV delivery van, Liu said. 
    While legacy carmakers need two or three years to develop a
new vehicle from scratch, China's EV industry has managed to cut
that to between 15 to 18 months, including for the S1, according
to Launch Design founder Wang Xun. 
    "The key to this industry has become speed. It’s no longer
about big fishes gobbling up small fishes but the fast eating up
the slow ones,” Wang told Reuters in a separate interview last
month.
Liu said he believes Singauto's focus on a targeted segment in
cold-chain logistics gives it a better competitive position than
mass-market EV makers in China who have been locked in a price
war this year that has sapped profitability.
    Singauto's investors include Singapore-registered investment
company Cynergy Global Investment (CGI) and TuSimple  TSP.O , a
U.S.-listed company with ties to China that has been
restructuring to focus on autonomous drive systems for
commercial trucks in Asia, Liu said.
    "We're not short of funding," said Liu, who wants an
eventual U.S. listing for Singauto.
    CGI and TuSimple did not respond to a request for comment.
     

(Reporting by Chen Aizhu and Kevin Krolicki; Additional
reporting by Zhang Yan; Editing by Miyoung Kim and Christian
Schmollinger)
((mailto:aizhu.chen@thomsonreuters.com; Reuters Messaging:
rm://aizhu.chen.reuters.com@reuters.net/))