DHL bullish on green auto sector

As Chinese automakers dominate the global electric vehicle and battery cell sectors, international logistics giant DHL is ramping up investment in China. With its EV-focused Center of Excellence in Shanghai recently established, the company is seeing big opportunities in helping Chinese EVs expand both locally and globally, said a senior executive.

The new center in Shanghai marks DHL's first of its kind in China, following locations in key regions including Indonesia, Mexico, the United Arab Emirates and the United Kingdom. The facility specializes in seamless and integrated end-to-end logistics for EV products, including batteries, electric motors, charging infrastructure and more. It is also equipped with a team of specialists to ensure efficient handling, storage and transportation while meeting the unique needs of the EV sector.

"In 2023, Chinese automakers dominated the global EV market, manufacturing over half of the EVs on roads worldwide and helped China become the largest auto exporter. As a battery powerhouse, China is home to six of the top 10 EV battery manufacturers, supplying close to 60 percent of the world's battery cells," said Niki Frank, CEO of DHL Global Forwarding APAC.

Frank shared that DHL has been involved in the international logistics of Chinese EVs for quite some time, and has been working with "almost all the key players in the Chinese market, either on the battery side or on the vehicle side".

Starting from helping move production equipment and set up factories, to transport testing vehicles and finished vehicles to different destination markets, the company sees the current expansion of Chinese EVs as "the beginning", and expects a lot more growth and massive opportunities in the future.

"We see the Chinese players being extremely well-positioned to serve other markets, and that's why we have invested in the Center of Excellence here (in Shanghai) to help the majority of key Chinese OEMs and battery players even better bring their products to market," Frank added.

According to the China Association of Automobile Manufacturers, the export volume of China's NEVs in 2023 reached 1.2 million units, up 77.2 percent year-on-year, marking a record high.

However, the burgeoning growth and appetite for EVs globally also present specific challenges for Chinese manufacturers in logistics, including regulatory uncertainties and geopolitical risks, and growing demand for storage solutions at both origin and destination markets to manage increased battery shipments. In particular, batteries classified as dangerous goods entail stringent safety and regulatory requirements to navigate in different regions across the globe.

Fathi Tlatli, president of global auto-mobility sector at DHL Customer Solutions & Innovation, explained earlier this month at an event that the transportation of battery cells and EV power trains often requires compliant movement in line with relevant global and local regulations, as well as efficient delivery with sensor-tested humidity conditions.

"Our deep understanding of the logistical complexities in the EV industry, coupled with our expansive global network, positions us to facilitate this next chapter of international expansion for Chinese EV firms. With the Center of Excellence, we aim to be the partner of choice for customers seeking international business growth," said Frank.

Looking ahead, DHL sees huge opportunities in the further expansion of Chinese EVs, both locally and globally, and will remain committed to ramping up investment in the country.

"China has been, is and will be the biggest market within the Asia Pacific for DHL Global Forwarding. We have a saying internally that the most common reply when we ask our people 'What is the most important country after China?', is China. So China represents a very significant part of our business in the Asia-Pacific. We will continue to invest in China," said Frank.

He added that apart from the investment into the facilities — such as the new center — to better cater to customer needs, the company is also expanding investments in sustainability, IT system optimization and digitalization, as well as hiring more people with specific skills to focus on certain sectors, such as EVs, renewable energy and semiconductors.