Deutsche Post DHL announced an intention to end in-house production of all-electric vehicles by its subsidiary StreetScooter.
The main reason is that the project was not viable financially. According to Bloomberg's article, the year 2019 alone brings a loss of about €100 million ($110 million).
The company will terminate production later this year and will post a one-off between €300 million and €400 million ($330-$340 million) write-downs on the StreetScooter.
The electric vehicles itself - Work and Work L models, produced by StreetScooter in Aachen and Düren in Germany, as well as the bigger Work XL, produced by Ford at its plant in Cologne (using Ford Transit chassis) were actually pretty handy EVs.
In late 2019, Deutsche Post DHL expanded its fleet of StreetScooters to 10,000 (some 11,000 now) and sold a four-digit number to other fleets. However, the business was simply generating significant losses.
Deutsche Post DHL didn't intend to become a vehicle manufacturer - acquisition of StreetScooter several years ago was kind of a necessity at the time, as the automotive industry refused to offer adequate vehicles at the expected price point for DHL.
It seems that DHL failed to develop and produce commercial delivery vans that would survive on the market.
At the same time the company didn't find a buyer/partner (to scale it up) and even the latest Memorandum of Understanding (MoU) with the Chery Holding Group to launch a joint venture and to enter the Chinese market will not materialize.
"Also against the background of the global economic uncertainties the Group decided to not further actively pursue the current exploratory talks regarding partnership options for the StreetScooter activities. Instead, StreetScooter will concentrate on the operation of the current fleet of e-vehicles.
“Thanks to our StreetScooter we have one of the biggest electric delivery fleets in the world and have made a significant contribution to the development of e-mobility. We have always said that we do not want to be a car manufacturer. A further scaling of the business without the right partner does not fit our long-term strategic goals. Independent from the decision today, we will further foster the transition of our fleet towards e-mobility“, said Frank Appel. “We are committed to our Mission 2050, which means zero-emission logistics by 2050.”
Basically, eMobility is only one of the many levers for the company to make logistics more efficient and thus more sustainable. The Group is therefore working intensively on various levers, such as the involvement in the production of alternative fuels, the optimization of its routes and energy efficiency in its buildings.
The refocusing of StreetScooter – a change outside of the company’s core businesses – is expected to result in one-off charges of EUR 300-400 million for the current financial year. The impact on the cash flow, however, will be limited."
The near-term plan for DHL is to terminate the production, focus on the existing fleet of StreetScooters and prepare to purchase more EVs next year from other manufacturers.
Before StreetScooter will close its doors, hundreds or maybe several thousand still might be produced in 2020.