EV Fleet Innovator DST Raises Millions of Dollars in New Financing Series
As the 'Green Economy' is trending in the world, China is a doer and advocates for sustainable development. Encouraged by favored policies and positive market responses, the EV fleet solution provider DST attracts investors' attention.
DST (Dishangtie, 地上铁) is an electric vehicle (EV) solution provider, founded in 2015. Its green fleet rental service and fleet management platform match the turn towards sustainable development visible in auto and other major industries around the world. As the environment continues to develop favorably, DST has received a Series C financing worth over tens of millions of US dollars.
Olympus Capital Asia led the investment as a new investor and DST’s extant stakeholders, Jeneration Capital and Itochu Technology Ventures, followed the new round. According to investment tracking site ITjuzi’s record, the pre-investment valuation for DST was USD 350 million and the new investment brings DST the total financing inflow of over USD 100 million and a post-investment valuation estimate of USD 400 million.
On the sustainability issue, the Founder and President of DST, Zhang Haiying (张海莹), mentioned the intensification of R&D in multiple applications, including IoT’s usefulness in vehicle maintenance, charging network connections and the second use of batteries to optimize the efficiency and lower the cost.
The company makes revenue from EV truck fleet rental and fleet management instead of manufacturing EV trucks. According to state statistics, only 0.46 million out of China’s 11.18 million on-road logistics vehicles were new energy vehicles. In 2018, the State Council released its three-year plan on transportation restructuring, aiming to tackle pollution, raise the efficiency of transportation and lower logistics costs.
Sustainable development policies are guiding the future for domestic green industry practitioners like EV fleet companies and EV manufacturers. With a less than 5% EV penetration rate in the logistics industry, the state intends to raise the percentage to 50% in general; for specific regions (i.e. mining and logistics zones), the penetration rate is expected to reach 80%.
The gap between state-set goals and the reality delineates a promising market for companies like DST. Meanwhile, the subsidies provided by the state are transferred from the vehicle purchase ring to the post-purchase status, including subsidized pile charging, maintenance and expanded driving zone. Meanwhile, the traditional ICE (Internal combustion engine) trucks are rigidly regulated and restrained to certain routes. Some cities even published policies that only new energy trucks will be granted new on-road approvals to expedite the sustainable development from logistics.
Though the green industry is driven by policy instead of the market at this stage, the subsidy is shrinking and shifting from vehicle trade market to vehicle use scenarios. Despite the environmental concerns, EVs are better elements for IoT application than ICE vehicles, since EV is more compatible with smart driving, which is powered by IoT techs. 2019 was a tough year for China’s consumer vehicle brands, but for EV makers, the market has just started to bud.