Sun | Dec 4, 2022

Commercial EV automaker to set up in Jamaica

Published:Sunday | September 25, 2022 | 12:06 AM

American EV auto company Cenntro Electric Group plans to set up a distribution centre in Jamaica and other markets to sell and service electric commercial vehicles, according to market filings. The company intends to sell delivery vehicles for...

American EV auto company Cenntro Electric Group plans to set up a distribution centre in Jamaica and other markets to sell and service electric commercial vehicles, according to market filings.

The company intends to sell delivery vehicles for fleets and farms. Currently, it designs and makes five types of vehicles: an off-road vehicle and four delivery vans of various sizes. Cenntro introduced its first car in 2017, called the Metro, a mid-sized delivery van that it still offers today. Others include its Logistar 200 and 400 models, Neibor 200 and its ORV off-road vehicle with an open back.

Electric vehicles, or EVs, are generally more expensive to acquire but cheaper to maintain, which makes their total cost of ownership more affordable over the medium term. This makes them arguably attractive for companies looking for cost savings for their fleets.

“Cenntro is also establishing EV centres across the US, Poland, Germany, Spain, Morocco, and Jamaica to align with its go-to-market strategy for new growth,” Cenntro said in its June second-quarter financial report. The company trades under the ticker CENN on the Nasdaq stock exchange in New York.

Sales are slim, but the company continues to scale. It reportedly operates five plants – one in Germany, two in China, and two in the United States – and currently ships to 16 countries.

“Cenntro has transitioned from a private label distribution model to a direct business-to-business distribution model, relying on its own global distribution/dealer/value-added reseller network as well as its own global supporting and service networks,” the company said.

Cenntro said it has sold more than 3,700 vehicles over its existence, of which 337 were sold during its half-year, an increase of 23 per cent over the previous year. At June, it held US$183 million in cash, up from US$2 million a year earlier. It also doubled its revenues in the year, reflecting increased demand and deliveries.

The company currently in growth mode doubled its half-year revenue to US$5 million from US$2.5 million. But it booked a loss of US$23.1 million compared to a net loss of US$4.5 million a year earlier.

An electric power train propels the car, but it also contains the technology for autonomous driving. Cenntro wants companies to buy its vehicles for city delivery, city sanitation, city surveillance, mobile vending, auto transportation, and rescue services. Cenntro owns 100 per cent of its intellectual property with 238 patents.

STRATEGIC DECISION

CEO Peter Wang, in an investor call this month, said that the company made a strategic decision in August to end “channel distribution partnerships” in the US and instead started selling its products directly to businesses in that nation. It will, however, seek partners and distributors in other countries.

“We have already made progress identifying excellent distributors, dealers, and value-added resellers,” stated Wang. “Initial EV centres will be located in Dusseldorf, Warsaw, Barcelona, and Jamaica to align with our go-to-market strategy that focuses on the US and the European markets. The centre will support customers in all levels of the binding process, from initial inquiry to after sales and parts, and parts will serve to support our distributors, dealers, and value-added retailers.”

“The company is in good shape,” said Wang about its growing customer base.

Jamaica’s EV market is in its nascent phase, but the Government is implementing policy to grow EV penetration from its negligible status to around 12 per cent of all vehicles within a decade, amounting to around 10,000 EVs.

With the expectation that the car market will eventually catch up, private companies Evergo Jamaica and power utility Jamaica Public Service Company Limited have been investing in charging networks.

The JPS has set up 10 charging stations but plans to double that to 20 within a year.

Evergo has set up 45 stations and intends to grow those numbers to 60 by the end of this year.

The number of EVs and hybrids in Jamaica hovers at around 400, while the number of registered EVs alone is estimated at around 100 units. They include a few Teslas, which represent the brand that ushered in the so-called EV revolution.

EVs are more expensive than gas-fuelled autos, but the elimination of two-thirds of import duty on such vehicles, from 30 per cent to 10 per cent, is designed to make them more affordable for Jamaicans to acquire.

steven.jackson@gleanerjm.com