September 6, 2019 / 11:48 AM / a month ago

Deutsche Post's StreetScooter signs China joint venture MoU

FILE PHOTO: A worker assembles a StreetScooter electric delivery van on the production line during an opening tour in Dueren near Cologne, Germany, May 30, 2018. REUTERS/Wolfgang Rattay/File Photo

BERLIN (Reuters) - Deutsche Post (DPWGn.DE) said on Friday its subsidiary StreetScooter had signed a memorandum of understanding with Chinese carmaker Chery Holding Group to begin producing electric vans in China from 2021.

Chery will invest up to 500 million euros ($551 million) and plans call for production capacity of up to 100,000 vehicles, it said. Deutsche Post will bring its technical expertise to the joint venture.

The MoU is part of a bundle of deals companies signed during a visit to China by German Chancellor Angela Merkel.

“Entry into the Chinese market is a significant milestone in the recent history of StreetScooter,” StreetScooter Chief Executive Joerg Sommer said in a statement.

China is StreetScooter’s second venture in Asia after Japan and the e-carmaker is looking to enter the U.S. market in two or three years, a Deutsche Post spokesman told Reuters.

Deutsche Post acquired StreetScooter, a start-up company based in Aachen, Germany, in 2014 in a move to electrify its fleet by using the fully-electric light pickup trucks for letter and parcel deliveries.

Deutsche Post has produced more than 12,000 ScreetScooters but has shied away from making large investments in the unit.

Last year it hired Goldman Sachs (GS.N) to evaluate options for StreetScooter as it sought to expand the unit ahead of an expected rise in demand for electric vehicles.

Deutsche Post CEO Frank Appel had said options included cooperating with manufacturers, floating StreetScooter on the stock exchange or bringing in a financial investor.

Reporting by Riham Alkousaa and Tom Käckenhoff

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