Good
day,
Deutsche Post DHL Group said it
will no longer be seeking a buyer for its StreetScooter business and will
instead wind down production of the vehicles.
StreetScooter, acquired by DHL in
2014, makes electric delivery vehicles. DHL was initially attracted to the
startup because it couldn’t find an electric vehicle it felt met its delivery
requirements. In May 2019, DHL announced it would seek a buyer for the unit, but
in its earnings release on Feb. 28, the company said it would no longer pursue
that path.
“Thanks to our StreetScooter we
have one of the biggest electric delivery fleets in the world and have made a
significant contribution to the development of e-mobility,” said Frank Appel,
CEO of Deutshe Post DHL. “We have always said that we do not want to be a car
manufacturer. A further scaling of the business without the right partner does
not fit our long-term strategic goals. Independent from the decision today, we
will further foster the transition of our fleet towards e-mobility. We are
committed to our Mission 2050, which means zero-emission logistics by 2050.”
The release said that StreetScooter
would “concentrate on the operation of the current fleet of e-vehicles.”
In November 2019, it was announced
that StreetScooter vehicles would travel U.S. roadways in 2020. The company also struck a deal with Amazon to deploy electric
vehicles in Germany.
Rueben Scriven, lead analyst for
electric trucks at market research firm Interact Analysis, said DHL found it difficult to grow share in a crowded space.
“A number of factors have
contributed to the demise of StreetScooter,” he said. “Firstly, there was a
significant decline in the growth of the European light-duty electric truck
market which only grew by just over 15% in 2019 compared to more than 40% in
2018. Secondly, StreetScooter was looking to tap into the Chinese market;
however, the Chinese light-duty electric truck market has contracted
significantly due to fears that the Chinese government will phase out subsidies
after 2020.”
Competition from ARRIVAL and Rivian
also impacted sales of StreetScooter vehicles in Europe.
“While StreetScooter was the
European market leader for electric light-duty trucks in 2018 with a market
share of more than 30%, ARRIVAL and Rivian, two of StreetScooter’s major
competitors, have disrupted the market using innovative manufacturing processes
and heavy investment in modular skateboard architectures. This has led to the
two companies winning recent large orders of more than 110,000 units in total,”
Scriven said.
There are reportedly more than
10,000 StreetScooters on roadways today with the company producing three
models: the WORK, the WORK L and the WORK XL. The XL is based on a Ford Transit
chassis and has been built by Ford (NYSE: F) in
Cologne, Germany, since October 2018.
Did you know?
The Dow Jones Transportation
Average fell 13.94% last week, just slightly worse than the overall Dow Jones
Industrial Average, which fell 12.36%.
Quotable:
“If the virus spreads into U.S.
communities, consumers are likely to limit their exposure to stores, theaters,
restaurants, sporting events, air travel, and the like. There is no reason to
anticipate that consumers will engage in such extreme measures at this time.”
– Richard Curtin, University of Michigan researcher, on the potential impact of coronavirus on retail sales
In other news:
Household income rises in January
Household income rose 0.6% in
January, the largest gain in 11 months, according to a survey by the University
of Michigan. (Wall Street Journal)
Missouri aluminum plant faces closure
An aluminum smelter in Missouri
that reopened in 2018 following the introduction of aluminum tariffs, is losing
money so fast it will likely close within 60 days, executives said. (Reuters)
Kodiak Robotics founders: The world will love self-driving trucks
The founders of Kodiak Robotics
wrote that people have not fallen in love with self-driving trucks yet, but
they soon will. (World Economic Forum)
Air Cargo Global denies closure
Air Cargo Global said it is not
closing, despite reports, but it is restricting its business, as it seeks
profitability. (STAT Trade Times)
Etihad Cargo hopes to expand service in U.S.
Etihad Cargo is expanding its sales
teams, including in the U.S., as it looks to grab a larger share of the global
air cargo business.(Arabian Industry)
Final thoughts
The coronavirus continues to have
widespread impact on global markets. Last week’s selloff in stocks is sure to
have an impact on decisions companies make in the near-term, and that could
mean cutting costs. Transportation is one of the largest costs, and with supply
chains being impacted, it might be very tempting for companies to reach into
the bucket of tricks and slice their transportation budgets in an effort to
push down rates, if even just a little bit.
Hammer down, everyone!
