Chinese EVs a hit for short-haul, last-mile deliveries in Japan. Here's why 

  • Chinese automakers are able to drop prices of electric vehicles and the figures cannot be matched by Japanese rivals.
File photo: Employees work on a production line inside a Dongfeng Honda factory in China. (REUTERS)
File photo: Employees work on a production line inside a Dongfeng Honda factory in China.

China is the world's largest electric vehicle (EV) market and is home to some of the biggest automotive brands which have to compete against a slew of local manufacturers as well. And while these local manufacturers are always looking at gaining a larger chunk of the local demand pie, there is potential for the taking from foreign markets as well. Take Japan, for instance.

The demand for EVs from Chinese companies in Japan has seen a spurt in recent times owing to several factors. Logistics' companies in particular are lapping up the products owing to better pricing and lower running cost of a battery-powered model. According to a Bloomberg report, the Covid-19 pandemic has brought an increased focus among delivery companies to cut costs while also meeting with higher demand owing to e-commerce.

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SSB Holdings Inc., for instance, has placed an order for 2,000 light electric trucks over five years. These will be manufactured by a unit of China's Dongfeng Motor Group Co., among other Chinese players. Similarly, Sagawa Express Co. is learnt to have placed an order for a little over 7,000 electric minivans which will be manufactured by Guangxi Automobile Group Co.

But why not rely on Japanese automakers?

The Bloomberg report quotes officials from the logistics' company as saying that Japanese automotive brands are unable to bring down costs of their respective electric products and Chinese EVs, therefore, become more cost-effective. “We can’t ask our customers to accept increased fares just because we have more expensive trucks," says SBS Holdings President Masahiko Kamata.

At a time when there is cut-throat competition in the last-mile delivery space, cost has become more important than perhaps ever before. And while EVs make good sense in this space in particular, the strategy then is amply clear when it comes to investing in EVs.

First Published Date: 17 Jan 2022, 09:34 AM IST

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