As China’s commercial vehicle market slows, overseas expansion is becoming a more dependable growth strategy, particularly for new energy vehicle (NEV) manufacturers.
According to the China Association of Automobile Manufacturers (CAAM), domestic sales of commercial vehicles totaled 2.969 million units in 2024, a 9% year-on-year (YoY) decline. In contrast, exports rose by 17.5% to 904,000 units. Commercial NEV exports were especially notable: from January to May, 41,000 units were shipped abroad, representing a 2.3-fold YoY increase.
This growth marks a shift in how Chinese commercial vehicles approach global markets. What began as low-cost shipments to developing regions is now transitioning to products built to meet the regulatory standards of more mature markets. As electrification and carbon neutrality shape the industry, commercial NEV manufacturers are pushing for improvements across product quality, compliance, and market entry strategies.
While China’s passenger NEV segment has become increasingly saturated, the commercial segment is still in flux. The market remains open, with opportunities across freight transport, passenger shuttles, and specialized vehicles. Each of these verticals breaks down further by use case, operating environment, and load requirements. This creates space for both legacy automakers and emerging companies to scale simultaneously.
Veteran manufacturers such as BYD, JAC Group, SAIC Motor, Chery, and Geely are expanding their presence abroad. At the same time, newer players are also making their mark, especially in the heavy-duty truck category. Startups like Deepway, Windrose Technology, and SuperPanther have made inroads, with the sector drawing consistent investment over the past two years.
Use case specificity is essential. In areas such as urban delivery, intercity logistics, and park-based transit, attributes like vehicle adaptability, operational efficiency, and total cost of ownership are key. As a result, commercial NEV makers face rising expectations around reliability and post-sale service.
How companies navigate market entry depends on both demand patterns and local regulations. These vary significantly between emerging and developed markets.
Shenzhen-based Gecko Motors provides a case in point. The company designs commercial NEVs using its proprietary digital chassis platform, delivering both chassis and complete vehicle solutions to global OEMs (original equipment manufacturers) and fleet operators. Founder Liu Jiangfeng, formerly president of smartphone brand Honor, has led Gecko through three funding rounds. Its backers include Contemporary Amperex Technology (CATL), IAT, DST, and Shenzhen Investment Holdings.
Liu has publicly stated that he aims for more than half of Gecko’s future revenue to come from overseas markets. Vice president Zhu Shijun, who has worked in international commercial vehicle sales since 2012, now leads Gecko’s global expansion. Zhu recently spoke with 36Kr to share insights from his experience in both traditional and emerging automotive businesses.
The following transcript has been edited and consolidated for brevity and clarity.
36Kr: You’ve been working on commercial vehicle exports since 2012. How would you describe the changes you’ve witnessed in this sector over the past decade?
Zhu Shijun (ZS): I started in 2012 at SAIC’s commercial vehicle division, initially covering North Africa, Latin America, and Southeast Asia. After 2016, I shifted focus to Europe and eventually became general manager of our European operations. I left that company in 2023 and joined Gecko Motors in 2024 to lead international business development.
In the early days, people saw commercial vehicles purely as tools. When China raised its domestic emissions standards more than a decade ago, older models began to be phased out. To address overcapacity, automakers started exploring overseas markets, exporting to less developed regions like the Middle East and Africa. Around 2012–2013, many companies entered Chile, Brazil, Mexico, and other LATAM countries.
By 2015–2016, as emissions rules upgraded to “National V” in China, Chinese commercial vehicles started entering more regulated markets such as Australia, New Zealand, and parts of Europe. Today, Chinese commercial vehicles are present almost everywhere, with key markets including Europe, LATAM, the Middle East, and Oceania.
36Kr: What’s Gecko’s current go-to-market strategy for overseas expansion?
ZS: Our main approach right now is exporting complete vehicles. This is more efficient overall, but some countries restrict complete vehicle imports or impose high tariffs. In those markets, we work with local partners for CKD (complete knockdown) assembly.
Historically, exporting meant shipping the product to port and walking away. But now, we’re engaging distributors directly and connecting with end customers to understand their needs.
At Gecko, we use a mix of strategies. We also leverage our domestic supply chain and tech capabilities to build competitive products tailored to market demands. For instance, we plan to station people in the Netherlands to develop that market on the ground. Customers like DHL have specific requirements around vehicle capacity and configuration—we build for that. As a new brand, we have to offer excellent products and strong after-sales support. At the end of the day, these are work tools.
Our core focus is Europe. The light commercial vehicle market there is estimated at 4 million units annually. From day one, we’ve built with Europe in mind, and our goal is to reach about 5% market share.
36Kr: In Europe, what’s driving demand for commercial NEVs? How do they compare to traditional gas or diesel vehicles in terms of cost-effectiveness?
ZS: Right now, there’s no clear economic advantage. A diesel vehicle costs around EUR 30,000 (USD 35,050), and that’s before discounts. An electric one might be priced at EUR 50,000 (USD 58,415), even with discounts still more expensive than diesel equivalents. Plus, electricity prices in Europe are higher than in China, so operating costs aren’t necessarily lower.
Current adoption is largely policy-driven. Governments place ESG (environmental, social, and governance) requirements on major logistics companies like DHL. Many large cities have low-emission zones such as London’s “Ultra Low Emission Zone,” for instance. Driving a diesel vehicle there can result in fines, which pushes companies toward electric vehicles.
To change the equation, the product has to improve. Here’s a concrete example: in Europe, any commercial vehicle over 3.5 tons requires a truck driver’s license. But when you add the battery, weight increases—so a vehicle that could originally carry 1.5 tons might only handle one ton post-electrification. If we can make a real breakthrough on cost, range, and payload, the broader market environment will shift as well.
36Kr: What’s the customer breakdown for light commercial EVs in Europe?
ZS: Around 70% are small and medium enterprises. The British use the “BBC” shorthand: baker, butcher, construction. These customers typically buy five or six vehicles for day-to-day use. The remaining 20–30% are large clients like national postal services, DHL, and DPD.
For logistics, our core use case is urban delivery, especially last-mile logistics. This breaks down into two subcategories. First, there’s standard-temperature delivery, meaning vehicles with shelving inside. These are used for postal packages and other low-density items. Then there’s cold chain delivery. We’ve developed a dedicated chassis for refrigerated vehicles and optimized the charging system. This is one of our most important verticals.
When building new markets, we prioritize large clients. They might represent a smaller portion of total customers, but their influence is much bigger. A few key partnerships can help establish credibility and scale brand recognition quickly.
36Kr: When it comes to acquiring large versus small customers in Europe, how do the sales channels differ?
ZS: Trade shows are one channel. We attend events like the IAA Transportation fair in Hannover. But what’s even more important is one-on-one engagement with major clients, understanding their pain points.
Take DHL again: many of its vehicles are operated by third-party contractors. So we also approach those firms to offer solutions.
As for the consumer-facing side, EV penetration in the light commercial category is still under 10% in Europe. That makes it very difficult to market effectively to individual buyers. Even so, we’re starting to build a network of local dealerships. As infrastructure improves, we expect broader adoption to follow.
36Kr: How do new players like Gecko compete in Europe alongside legacy brands and Chinese incumbents?
ZS: Every major European brand is working on electric models, but many of them are adapted from diesel platforms. That makes them expensive and underwhelming in performance. On the Chinese side, players like SAIC and Geely are also expanding overseas.
But the real competition isn’t about carving up the existing 10%. It’s about expanding the market. Our focus is on how well the product fits the customer and whether the business model meets their actual needs.
In our experience, European clients see us all as “Chinese automakers.” They don’t really distinguish between SAIC, Chery, or Geely. Everyone starts on the same line. What matters is whether you can deliver a better product and communicate its advantages clearly.
Oddly enough, competition in China is tougher than overseas. If we can execute better on both product and support, we’ll break through.
36Kr: After Europe, why did Gecko choose to enter LATAM? And why was Chile your first stop?
ZS: LATAM is essentially an extension of the European market in terms of vehicle models and usage. We entered Chile first and partnered with a local distributor. Chile is one of the more developed markets in South America and offers strong policy incentives for electric logistics vehicles. That said, total annual volume for commercial EVs is still tiny, at around 200 units.
We introduced our EV48 model about a year ago. It has already been through test drives and pilot programs with several large companies. We’ve gotten lots of leads and expect to secure a meaningful foothold.
We’re also monitoring Argentina and Brazil. In Argentina, we’re still evaluating the long-term stability of government policies. Brazil presents high localization barriers, like mandatory local shareholding and significant capital investment. A lot of companies have struggled there. Very few commercial vehicle manufacturers have managed to set up production locally.
36Kr: Beyond Europe and LATAM, which other regions do you consider promising for NECV growth?
ZS: We’re mainly looking at markets with similar needs to Europe. First is South America, centered around Chile. Then Australia and New Zealand, where regulations are closely aligned with the UK, so product compatibility is high. Russia has big potential too, but geopolitical risks make it difficult right now.
As for North America, we’re not prioritizing it. The regulatory complexity, policy ambiguity, and fierce competition make it too tough for now.
36Kr: Heavy-duty trucks are another major category in commercial vehicles. What specific challenges are they facing in electrification?
ZS: The European Union is introducing support policies, like waiving road tolls for zero-emission heavy-duty trucks. That’s encouraging. But from a product standpoint, there are still major challenges.
For one, batteries add weight and cut into payload capacity. Long-haul routes require long range, which demands either better battery tech or a switch to battery swapping. Then there’s the cost: heavy electric trucks are extremely expensive. Right now, the total cost of ownership isn’t attractive.
And if the EU eventually imposes tariffs on Chinese commercial vehicles, the situation could become even more difficult.
Compared to passenger cars, where extended-range hybrid cars are gaining consensus as a viable transition path, there’s no such agreement in commercial vehicles. We may end up with a mix of powertrains coexisting: diesel, electric, hybrid, biofuel, and more.
36Kr: Based on your years of global experience, what are some common pitfalls automakers encounter when expanding overseas?
ZS: First is market understanding. When I started in Europe, the EV penetration rate for light commercial vehicles was zero. Going from zero to 10% took years of persistence and client education. It’s exhausting work.
Second is underestimating the regulatory landscape. Emissions standards, market entry thresholds, and carbon tracking rules vary widely by country. In 2016, China was still at “Euro IV,” while Europe had already moved to “Euro V” and then quickly to “Euro VI.” You could invest heavily in a compliant product only to find your competitive advantage eroded. Even after you enter, you’re subject to tight emissions management. The EU set a cap of 200 grams per kilometer. Go over that by even one gram, and the fine is EUR 95 (USD 112). Today, battery recycling requirements add another layer of complexity.
Third is the competitive environment. Chinese brands may move fast, but local players often dominate through protectionist practices. Bidding specs may be written to match a domestic brand’s product exactly, leaving no room for outsiders. Long-term relationships and closed networks are hard to break into. Even with a better product, the resistance can be significant.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Shi Yi for 36Kr.