Kia Corporation has begun to lay the groundwork for its innovative Purpose Built Vehicle (PBV) business, partnering with cold chain startup ‘S.lab Asia Inc.’ to break into Singapore’s last-mile delivery market. On January 28, the two companies have signed a memorandum of understanding aimed at launching a pilot project in Singapore using the Niro EV and evaluating the potential for a future PBV-based business model.
The Niro EV model optimized and modified for last-mile logistics service will be used in Singapore’s city centre, in the process responding to the needs of the rapidly growing e-commerce market. In addition, the strategic model will also help strengthen the PBV capabilities and service operations of both partners.
“Through this agreement, Kia will leave a strong image of itself as a collaborative partner providing new value to global mobility service companies,” said DongSoo Ahn, Vice President and Head of the PBV Business Group at Kia Corporation. “Kia will strive to lead the global PBV market by establishing partnerships with various operators through not only last-mile delivery services but also various open-innovation collaborations.”
Purpose-built vehicles – the development of which forms the core of Kia’s mid-to-long-term business strategy, known as “Plan S” – are vehicles that are designed for specific applications, such as last-mile delivery, autonomous shuttles and chauffeur-driven luxury vehicles. In terms of Kia’s pilot PBV venture, ‘last-mile delivery service’ refers to the last leg of a product’s delivery from a warehouse hub to a customer, with a focus on maximizing delivery quality and service differentiation.
S.lab Asia is a startup that produces special boxes for cold-chain fresh product deliveries and offers advanced delivery services. It is currently building a logistics network that will sell and distribute fresh products to Korea and Southeast Asia.
As Kia’s next-generation PBVs are currently undergoing final product development and optimization, Kia, in cooperation with S.lab Asia, will use the Niro EV with a modified interior for the ease of unloading and uploading S.lab Asia’s boxes with a maximum loading space. The operations will begin in Singapore in the first half of this year, during which Kia will assess and advance its PBV business model, including product and service aspects, by applying the real-world lessons learned from utilizing the modified Niro EV in Singapore.
Through the scheme, Kia will gain core PBV project competencies and experiences, including developing EV-based PBVs that are optimized for last-mile delivery; advancing the Car as a Service (CaaS) platform for fleets and leasing needs; establishing an EV-charging ecosystem, and creating an EV fleet management services structure.
Kia has selected Singapore as the optimal location for its next PBV project, taking advantage of the city-state’s world-class infrastructure, vibrant economy and rapidly advancing e-commerce. Instrumental in Kia’s decision was Singapore’s plans to gradually phase out internal combustion engine transportation by 2040 via a forward-looking set of eco-friendly mobility policies, including increasing subsidies for EVs.
To successfully implement the project, Kia plans to establish a collaborative framework with key partners in this area, including Hyundai Motor Group Innovation Center in Singapore; SP Group, Singapore’s largest EV-charging company; and Kia’s local authorized dealer, Cycle & Carriage.
Kia will also collaborate with S.lab Asia to further develop and optimize its PBV business model for the Korean market, and expand similar services to the country in the first half of this year.