(This Sept. 18 story corrects to show that the investors include Congbi Qiushi, not TuSimple, in paragraphs 13 and 15)
By Kevin Krolicki and Chen Aizhu
SINGAPORE (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 and Toyota 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, 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 China-based fund Shenzhen Congbi Qiushi Investment Management Co., Ltd, Liu said
“We’re not short of funding,” said Liu, who wants an eventual U.S. listing for Singauto.
CGI did not respond to a request for comment. A Congbi Qiushi representative confirmed company’s intent to invest in Singauto.
(Reporting by Chen Aizhu and Kevin Krolicki; Additional reporting by Zhang Yan; Editing by Miyoung Kim and Christian Schmollinger)
