Chinese electric trucks are set to take on Europe, says Scania CEO

STOCKHOLM: After pushing into Europe with their electric cars, Chinese manufacturers such as BYD Co. are expected to target another piece of the market: big rigs.

One of Europe’s top truckmakers warned that the roughly 25 Chinese truck and bus manufacturers building a presence in the region should be taken just as seriously as Tesla Inc. because of their expertise in batteries and software.

Chinese e-bus brands "managed to establish themselves in a fairly short time, largely thanks to their access to very good battery technology,” Christian Levin, who heads Volkswagen AG’s Scania and Traton, said in an interview.

"If you extrapolate and look at trucks, you can imagine a similar development.”

Scania, Volvo and Daimler Truck are offering electric rigs, but their success selling them remains limited, even as Europe is pushing to curb transport emissions.


BYD has built know-how and scale on the back of its rapidly expanding passenger-car businesses and is transferring some of those capabilities to battery-powered trucks.

The maker of the 8TT heavy-duty rig has sold e-buses in markets such as Germany and plans to build an EV factory in Hungary.

Other Chinese companies expanding in Europe include Yutong, Sany and JAC Motors.

While Levin anticipates tougher competition at home, scania is setting up its own plant in China to benefit from growth in the world’s biggest truck market.

Its facility under construction in Rugao in Jiangsu province, due to start operating in late 2025, has a licence to produce as many as 50,000 vehicles annually, roughly half the Swedish brand’s current output.

Scania hasn’t yet decided which models will be built there.

Scania is a premium brand with typically double-digit margins and most of its deliveries in Europe.

Setting up shop in China will cut production costs and solve a capacity problem that lost the company business in the Asian country due to long delivery times, Levin said.

The move will also help Scania tap into China’s technology expertise, either by hiring skilled workers or potentially buying software startups specialising in human-to-machine interfaces or voice recognition, the CEO said.


The market also is a good starting place to sell elsewhere in Asia.

"China is where the sub-suppliers are, where the home market is and with fine trade agreements with most of the surrounding countries.” Levin said. "It is easy to export out of China.”

Scania is catching up in China.

Daimler Truck has been manufacturing Mercedes-Benz rigs in the country with local partner Foton Motor since 2022.

While Volvo late last year cancelled plans to buy Chinese truckmaker JMC Heavy Duty Vehicle, it’s building buses, engines and construction equipment in China and has joint ventures with local truckmaker Dongfeng Trucks and SDLG, a maker of construction equipment.

Scania will be running its factory without a Chinese partner, giving the Sweden-based brand full control over manufacturing processes and its intellectual property.

"In the current economic and political environment, companies that are initiating industrial operations in China are taking bold steps,” said Roman Mathyssek, a partner at strategy consultancy Monitor Deloitte.

"For those that missed M&A opportunities in the region, participating in the Asia growth story with market entries out of their brand portfolio is a good strategic solution.”
Autos News