Japanese battery developer 3DOM Inc, whose subsidiary is in the midst of a reverse takeover (RTO) deal with Singapore-listed Reenova Investments, has announced plans to create the world’s first carbon- neutral commercial fleet service with leading Chinese automaker Geely.
Under a memorandum of understanding, 3DOM’s subsidiary, 3DOM Singapore, will supply batteries to Geely’s subsidiary Jiangxi Geely New Energy Commercial Vehicle (GCV). Back in November last year, Reenova announced that it is acquiring 3DOM Singapore in an RTO deal potentially worth some US$1 billion ($1.35 billion).
Separately, Reenova has been undergoing multiple rounds of fundraising to help pay for the fees involved in the RTO.
3DOM says these battery packs will go into the E51, an electric commercial van manufactured by GCV and launched in March 2022.
While 3DOM is responsible for the research and development of its batteries and separators, the manufacture and sale of the batteries worldwide will be done by 3DOM Singapore, with a goal of supplying some 600 megawatt hours (MWh) of batteries by 2025.
See also: Are sorghum plants and fuel cells worth the US$3 bil 3DOM Inc-linked RTO deals?
In an interview with The Edge Singapore, 3DOM Singapore’s chief operating officer, Teruhiko Tatebe, explains that Geely was chosen because of its experience with electric vehicles (EVs). “It is important that we choose a partner who has sufficient experience with EVs, not just any vehicle manufacturer,” he says.
He points out that China is an “advanced country” in terms of the shift from traditional vehicles to EVs, and Geely has built up a significant track record in this market.
According to Tatebe, Geely is well suited for the Japanese market too as their vehicle quality is high, and yet, it has been able to keep prices down, “especially compared to Japanese competitors.”
See also: Lithium-ion battery maker 3DOM eyes telecoms market; readies RTO deal with Reenova
Unlike the large automakers like Nissan or Hyundai that are already making passenger EVs, 3DOM and Geely decided to target the commercial vehicle segment instead. Relative to private passenger vehicles, commercial vehicles have a higher uptime and operating rate. As such, in the case of a usage-based subscription model, the services are more profitable on a whole, says Tatebe.
Commercial vehicles also have more predictable operating patterns compared to private vehicles, in terms of hours or routes, which means that it would be easier to work with partners to deploy charging stations for these vehicles.
3DOM will introduce the commercial fleet service through an affiliated company to be newly established, targeting a 2023 launch starting in Japan.
The fleet service will package the E51 with clean electricity and carbon credits to users such as supermarkets and transport companies. 3DOM says the E51 is fully suited for delivery operations in Japan, although Tatebe declined to reveal specific partners for now.
But the company is also aware that for companies to switch to EVs, there are several barriers, including the higher pricing of EVs over conventional gasoline vehicles due to battery costs, as well as insufficient charging networks.
3DOM aims to alleviate the financial burden of shifting to EVs by providing vehicles through subscription and/or lease services, which means that its customers will not have to stump up a hefty upfront payment to adopt these electric commercial vehicles.
To address the problem of insufficient charging networks, 3DOM is pursuing alliances with companies developing charging infrastructure powered by clean electricity.
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3DOM believes that the transportation and logistics industry has a big part to help move towards carbon neutrality. Not only is the fleet service to be introduced by 3DOM and Geely carbon-neutral when operating, but the carbon neutrality also extends upstream to the production of the vehicles and batteries themselves.
Carbon neutrality for this portion of the value chain will be achieved by leveraging carbon credits from another of 3DOM’s subsidiaries, Binex Inc.
Binex’s primary business is in the cultivation of sorghum, a grain that Binex will use in the production of biomethanol and biopellets. The biomethanol can be then converted into hydrogen to power hydrogen fuel cells.
But as a result of growing sorghum, Binex will also generate carbon credits, which will be used to offset the emissions from the production of batteries and vehicles.
Separately, Binex Singapore, a subsidiary of Binex, is also involved in an ongoing US$2 billion reverse takeover of Sinjia Land.
