Smith Electric Vehicles keeps on trucking thanks to $42 million investment
It appears as though rumors of the demise of Smith Electric Vehicles were exaggerated. The manufacturer of electric medium-duty delivery trucks had suspended operations at the end of last year because it was losing money with each truck produced. At the time, CEO Bryan Hansel insisted the stoppage was temporary and was intended to revamp its supply chain and manufacturing processes to lower costs.
It is now apparent that the stoppage in production was in fact temporary and not a sign of pending failure. Smith recently secured a $42 million investment from Sinopoly Battery Limited, a Hong Kong-based producer of lithium-ion batteries and other EV components (via Charged EVs).
This move is indicative of a shift in focus to the Chinese market; Hansel explicitly mentioned growing demand in China as a driver of increased production volumes, while Sinopoly Chairman Cao Zhong pointed to subsidies that “uniquely position us to capitalize on the rapidly growing commercial EV market in China and the US.”
The company reiterated that the “strategic” stoppage was necessary for a transition to Tier 1 suppliers, which will help lower production costs. Increased volumes as a result of expansion into the Chinese market will lower costs further and bring the company closer to profitability. Smith claims to be on track to restart the assembly lines sometime this summer.
The investment from Sinopoly also could lead to an IPO, as Smith’s Chairman of the Board Charles Gassenheimer hinted: “Sinopoly’s investment in Smith Electric Vehicles marks an important milestone in recapitalizing and restructuring the company in preparation for the public market.”
They certainly aren’t the sexiest EVs, but delivery trucks provide even greater fuel savings than passenger EVs and could have an impact on urban air quality and noise pollution if deployed in significant volumes. Smith isn’t out of the woods yet, but the feisty startup’s prospects look far brighter than they did just a month ago.