Smith Electric Vehicles executed an agreement to form a joint venture with China-based strategic partner and investor FDG Electric Vehicles, a vertically integrated electric vehicle and lithium-ion battery manufacturer engaged in the R&D, production and distribution of all-electric vehicles. Both parties have also entered into Intellectual Property (IP) and technology licensing agreements with the JV, taking full advantage of the combination of FDG’s electric vehicles designs and Smith’s technologies and distribution network, so as to accelerate the development of the FDG brand name and products in the US market.
FDG will contribute the US-exclusive right to use its self-designed passenger van, minibus, panel van and cab/chassis (a US$30-million consideration) into the JV and also subscribe to the JV’s shares with US$15 million in cash; Smith will inject all of its US-exclusive IP pertaining to electric vehicles and its current client base (a US$40-million consideration). In addition, the JV will enter into an exclusive sourcing agreement for electric vehicles’ SKD (semi-knocked down) kits and electric vehicle battery with FDG, and the exclusive agreement of assembly and production with Smith respectively to entrust Smith to manufacture electric vehicles using FDG SKD kits and batteries.
The joint venture will offer a combined portfolio of all-electric vehicles and fleet electrification solutions for customers in the United States and its protectorates across a broad range of segments including delivery and transit. This portfolio includes the Smith Newton platform configuration and Smith sub systems (Smith Drive, Smith Link and Smith Power), the FDG all-electric commercial EV platform, its lithium-ion batteries and all-electric powertrain, as well as infrastructure, energy contracts and financing.
In the second phase, Smith will proportionally distribute all JV shares acquired from the agreement to its shareholders (accounting for 47.06% of JV’s shares). In addition, the JV will raise US$20 million from the market. After all transactions completed, FDG will become the JV’s largest single shareholder (holding approximately 45.45% of JV’s issued share capital.
Smith Electric retains its rights outside of the United States for the commercialization of the Newton and Edison vehicles and Smith subsystems.
The JV forecast for electric vehicles’ SKD kits under the sourcing agreement puts the demand of electric vehicles SKD kits from the JV to be 3,000, 5,000 and 10,000 units in 2016, 2017 and 2018 respectively.
Over the past months, Smith Electric and FDG have collaborated to develop a ground-up, commercial electric vehicle platform in the 12,000 to 16,500 GVW range. This new platform design will be offered in multiple configurations including cab/chassis, van, including step-through van, and transit.
Unlike some other offerings in this GVW range, which are modified versions of passenger vans or require a separate upfit, this platform has been designed, from the ground-up, exclusively for long-life commercial applications such as postal and parcel delivery and people transit. It will complement the existing all-electric Newton platform, which is currently offered in the 14,000 to 26,000 GVW range.
Smith Electric, which restarted production of its re-tooled Newton line of commercial electric trucks in January, expects to scale up manufacturing operations in the United States over the coming 18-24 months commensurate with the launch of this new product.
Smith Electric believes that urban transport and delivery is a significant opportunity for fleet electrification, a market in which operator demand, logistical viability, political support and environmental benefit are all aligned.
The growing demand for fleet transformation through electrification is driven by growing recognition of the economic and environmental benefits of short haul fleet electrification. Medium-duty gas and diesel trucks are expensive to operate and are one of the biggest contributors to urban pollution. These vehicles typically travel on fixed routes of fewer than 100 miles (161 km) in a single day and are based in a centralized depot, making them ideal for fleet electrification.