$35M planned investment in new entity responsible for US product development, sales, marketing Smith will invest Smith brand, license for Newton™ EV design and IP Strategic partner FDG will invest $15M, license for commercial EV design and IP
KANSAS CITY, Mo., May 4th, 2015 – Smith Electric Vehicles, (‘Smith Electric’ or ‘the Company’), a global leader in all-electric medium-duty commercial vehicles, today announced that it has executed an agreement to form a joint venture (‘the JV’) with strategic partner and investor FDG Electric Vehicles Limited (‘FDG’). FDG, an international company listed on the Hong Kong Stock Exchange, is a vertically integrated electric vehicle and lithium-ion battery manufacturer engaged in the R&D, production and distribution of all-electric vehicles.
The Joint Venture
The purpose of establishing the new company is to bring world-class next generation technology to accelerate commercial fleet electrification in the US market. The new entity, a Delaware corporation, 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.
The JV will contract exclusively with Smith Electric for product development services, vehicle manufacturing, service and support, and with FDG for the supply of lithium-ion batteries and SKD kits. Smith Electric retains its rights outside of the United States for the commercialization of the Newton and Edison vehicles and Smith sub systems.
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 existing 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 like 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.
“The reason for this transaction is simple: we believe the time is now for market acceptance of commercial electric vehicles. We are seeing all of the indications that the market that we helped establish has now turned the corner from the R&D phase to the commercial phase. In establishing this JV, we believe this will accelerate our new technology platform development. The new company leverages FDG’s ground-up commercial all-electric vehicle designs and its electric vehicle manufacturing facility, which can produce up to 100,000 vehicle per annum, as well as Smith’s 12M+ miles of commercial vehicle experience to offer a complete fleet electrification solution,” commented Bryan Hansel, chief executive officer of Smith Electric.
“FDG believes that the electric vehicle is the future mainstream of the global automotive industry and that’s why we are a pure electric vehicle company. We deeply value our relationship with Smith and the formation of the JV represents the mutual recognition of each other’s technologies, the mutual respect for both teams’ professionalism, dedication and passion for electric vehicles. The combined force will be well positioned as a global leader,” commented CAO Zhong, executive chairman of FDG.
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. Smith’s experience with its customers and twelve million miles of operational experience positions it uniquely to create novel approaches for driving electric vehicle adoption in support of global energy independence.
The growing demand for fleet transformation through electrification is driven by Smith Electric’s customers in recognition of the significant 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 in a single day and are based in a centralized depot, making them ideal for fleet electrification.
Customers who work with Smith Electric to transform their fleets save an estimated 70% annually on fuel and maintenance during the life of the vehicle and eliminate all vehicle-based emissions. Across a large fleet this can mean millions of dollars in annual operational savings, hundreds of thousands of gallons of fuel offset, and saving the environment from exposure to tens of thousands of tons of greenhouse gases.
Forward-Looking Statements: This press release includes statements that may constitute “forward-looking” statements, usually containing the words “believe,” “estimate,” “project,” “expect” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. In making these forward-looking statements, Smith Electric undertakes no obligation to update these statements for revisions or changes after the date of this release.
About Smith Electric Vehicles
Smith Electric Vehicles Corp. is a global leader in commercial fleet electrification. Smith produces zero-emission vehicles that deliver a significantly superior performance to traditional diesel trucks, at greater operational efficiency and significantly lower cost. The Smith mission is to be the leading producer of high efficiency, zero-emissions vehicles in the commercial transportation industry, utilizing its unique platform to partner with world class brands to transform their entire fleets, help them operate more profitably and return energy to the grid.
The Smith Newton™ and Edison™ models are deployed in several countries across a variety of applications, including parcel, food, beverage and equipment delivery, and personnel transport. Smith Electric provides a full end-to-end approach to fleet transformation, comprising Smith Drive™ (fully integrated EV drive and control system maximizing vehicle performance), Smith Power™ (networked battery & power management system) and Smith Link™ (networked performance data). The Company operates a manufacturing facility in Kansas City, Mo., and a technology center in Newcastle, U.K.
About FDG Electric Vehicles Limited
Listed on the Main Board of HKEx (stock code: 00729), FDG Electric Vehicles Limited (“FDG”) is a vertically integrated electric vehicle manufacturer engaged in electric vehicle, lithium-ion battery and electric vehicle leasing business. The Group engages in independent R&D, design and production of electric vehicles such as coaches, medium and minibuses, commercial vehicles, SUVs and other models, and in the R&D, production, distribution and sale of lithium-ion batteries as well as the provision of leasing service of electric vehicles. The Group’s electric vehicle manufacturing plants are in Hangzhou and Kunming of the PRC and it also operates lithium-ion battery plants in Jilin and Tianjin of the PRC.