LOGISTICS companies in Japan, striving to cut costs and make the most out of the pandemic-inspired online shopping boom, are finding an unlikely white knight in Chinese electric vehicle (EV) manufacturers, whose vans make last-mile deliveries not only cheaper, but cleaner as well.

SBS Holdings Inc., a listed logistics company that offers deliveries, recently struck a deal to buy 2,000 light EV trucks over five years from Japanese EV startup folofly. The cars will be made by a unit of Dongfeng Motor Group Co. as well as other Chinese automakers. Sagawa Express Co.. meanwhile, will utilize 7,200 low-priced electric minivans made by Guangxi Automobile Group Co.

“Japanese EVs don’t meet our costs,” SBS Holdings president Masahiko Kamata said. “Japanese automakers say it’s impossible to lower prices, so we had to buy cheaper vehicles. We can’t ask our customers to accept increased fares just because we have more expensive trucks.”

Like most places around the world, online commerce has soared in Japan during COVID as people order everything from food to clothing and electronic gadgets right to their doorstep. Those increased sales are pushing up logistics companies’ carbon footprints. Yet Japan has pledged to cut emissions almost 50 percent relative to 2013 levels by 2030. To meet that target, 90 percent of vehicles sold in the country by that year will need to be battery-electric ones, according to McKinsey & Co.

SBS plans to eventually have a fleet of some 10,000 commercial EV vans that it can use for e-commerce deliveries. The small trucks can run for about 200 kilometers on a single charge and cost around 3.8 million yen (US$33,000).

“The range isn’t a huge issue for last-mile deliveries,” said Akira Miyahara, a manager at SBS Sokuhai Support, SBS Holdings’ rapid-delivery unit. While there’s a question mark over how the Chinese vehicles may perform after three or four years, for now, after 12 hours overnight on the charger, there’s no problem.

Although Japan isn’t currently a huge market for electric vehicles — EV penetration runs at just 1 percent versus 30 percent in some cities in China — Chinese automakers sense an opportunity.

BYD Co., which counts Warren Buffett as a backer, already commands around 70 percent of Japan’s pure electric bus market and aims to have 4,000 such buses running in the country by 2030.

“Japan is well established in the automotive industry due to its reputation as a quality-oriented market, so entering the Japanese market is an important step,” a Shenzhen-based BYD spokesperson said. “BYD Japan will continuously promote the electrification of transportation to accelerate the realization of carbon neutrality.”

Representatives for Dongfeng Motor didn’t respond to requests for comment. Guangxi Automobile said its deal would “accelerate the Japanese market development of micro new-energy logistics.”

Thanks to incentives and subsidies, the average price of electric cars has dropped in China, while it’s risen in Europe and the United States.

An August report from JATO Dynamics, a London-headquartered global supplier of automotive business intelligence, found that consumers in China can buy a brand new EV for as little as US$4,200. The price in Europe jumps to at least US$17,880 and again to US$28,170 in the United States.

It’s not only Chinese companies muscling in. Cenntro Electric Group Ltd., a U.S. maker of commercial EVs, received approval in November to sell light trucks in Japan, and will have its vans used by Amazon Fleet, Amazon.com Inc.’s local delivery partner, and Hana Cupid, Japan’s largest floral gifting association.

Cenntro CEO Peter Wang sees a bright future for home delivery in the nation due to Japan’s aging society. The company is even planning an assembly plant, potentially in Fukushima, to locally produce EVs and export some of them to Southeast Asia, he said. (SD-Agencies)