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Hino-VW alliance seeks to gain ground on electric trucks

Demand for cleaner, quieter delivery grows in urban areas

Hino and Volkswagen will combine their expertise to develop electric trucks. (Photo by Kazumi Saito)

TOKYO -- Toyota Motor affiliate Hino Motors and Volkswagen have agreed to deepen collaboration on electric trucks, trying to catch up with rivals like Daimler in technology gaining traction among logistics companies for urban transportation.

The arrangement between truckmaker Hino and Volkswagen truck and bus unit Traton Group represents the first initiative under a broader partnership agreed on between the units in April.

Hino is ahead of rivals in hybrid trucks, both in terms of technology and commercialization. The company markets low-emission hybrid trucks and is developing artificial intelligence technology that helps boost fuel efficiency.

Concluding that electric offerings are important to logistics company customers seeking to reduce their carbon footprint, Hino also plans to release electric trucks around 2020.

Volkswagen is working to release midsize electric trucks as early as the second half of 2019 by collaborating with American commercial vehicle company Navistar International, in which it holds a 16.9% stake.

Still, rivals are ahead. Daimler, the global leader in commercial vehicles, plans to begin mass production of large electric vehicles -- a category perceived as especially challenging to electrify -- around 2021. Its Japanese unit Mitsubishi Fuso Truck and Bus offers small electric trucks.

The partners chose electric vehicles as the first collaboration project as they share the goal of catching up to rivals. That the companies have different areas of expertise in electrification technology will make it easier for them to generate synergies.

The market for electric trucks is very new. Mitsubishi Fuso's small electric trucks, for instance, carry a range of just 100 km per charge. While many countries tighten environmental regulations for passenger vehicles, commercial vehicles like trucks often are exempt from those rules.

But the partners envision growing demand from logistics companies seeking to showcase environmental awareness to investors and consumers. Seven-Eleven Japan, the convenience store operator under Seven & i Holdings, and Yamato Holdings' package delivery unit Yamato Transport use small electric trucks for delivery within big cities out of environmental and noise considerations.

Economies of scale from mass production could slash the price of such trucks, and the market may expand as more businesses look to electrify their fleets. But some forecast that electric trucks will remain less price-competitive than diesel counterparts at least until 2025.

But commercial vehicle makers must be ready to cash in on a full-blown market. Producers of commercial vehicles also generate income from after-purchase services such as inspections and parts repair. Training technicians to handle electrified vehicles and updating service stations would take some time.

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