A Singaporean startup is looking to break into China’s overcrowded electric vehicle market by developing refrigerated electric trucks for delivering pharmaceuticals and food. Singauto Technology recently completed a $20 million initial funding round with investors and is poised to reveal its electrified cold storage truck at an upcoming Beijing event.
China’s electric vehicle market is the largest on the globe and currently boasts a 23% electric vehicle share. Thanks to significant financial support from the Chinese government and the country’s massive population, more than 300 local electric vehicle companies are battling for supremacy in the world’s most expansive EV market.
While foreign automakers such as Tesla have managed to break into the Chinese market, competition is incredibly stiff. Major auto companies are currently in the midst of a price discount war that has even attracted the attention of Chinese authorities. A refrigerated electric truck for transporting food and medications may give Singauto Technology the edge it needs to crack into China’s competitive electric vehicle market.
Singauto Technology officials hope increased efficiency in the Chinese EV industry will allow it to reduce production times for its electric cold-storage trucks. Furthermore, they are betting on local environmental policies such as restricted use of fossil fuel-powered cars in cities to increase demand for their electrified trucks.
Founder Liu Yuqiang says the Singaporean company has already received 20,000 preorders for its S1 truck and plans to specifically target relatively small but fast-growing markets in Southeast Asia for electric vehicle sales. A statement from the company notes that the new truck will come with an 85-kilowatt-hour battery having a 168-mile range per single charge once fully loaded.
Chinese battery manufacturing giant CATL will supply the battery packs, Singuato Technology says. According to founder Yuqiang, Singauto will have to sell 30,000 trucks to be profitable, partly because it has outsourced the majority of the manufacturing, engineering and design of the S1 truck.
Launch Design or Shanghai Launch Automotive Technology will both source and design components for the truck as well as manufacture it, along with future variants of the vehicle. This will include a smaller electric delivery van, said Yuqiang. Outsourcing the design and manufacture to Launch Design will allow Singauto to fast-track the typical vehicle development period from two to three years to less than 18 months, Launch Design founder Wang Xun said.
In an August interview with Reuters, Xun said that speed is quickly becoming a deciding factor in the automotive industry, and rather than large companies gobbling up smaller ones, companies that can get their product to the finish line first are winning. Singauto’s founder said the company’s specialization in the cold-chain logistics segment gives it a competitive edge compared to other automakers who are simply developing electric vehicles for the masses.
The approach that Singauto has taken in choosing its niche may be implemented in similar ways by other EV makers, such as Rivian Automotive Inc. (NASDAQ: RIVN), in the different markets they are targeting. It remains to be seen which companies will prevail over the long-term.
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