<div id="readability-page-1">Chinese robovans could generate twice as much revenue in Southeast Asia and the Middle East than in the domestic market, making overseas expansion a must for profitability, according to autonomous driving leader Zelos Technology. The company claims to have built the world’s largest robovan fleet since it was founded in Suzhou in 2021, but scaling up international business was key for survival, said Sean Zhang Xuchen, co-founder, chief operating officer and head of global business at Zelos. “Ultimately, the key to competitiveness lies in the capabilities of AI,” he said, adding that the company had positioned itself as an artificial intelligence solution provider rather than a vehicle operator. China’s robovan industry has entered a period of consolidation, marked by the merger of Zelos with Cainiao’s autonomous vehicle unit in January to form a US$2 billion automated delivery giant. Alibaba Group Holding, which controls Cainiao, owns the South China Morning Post. In addition, conventional carmakers like Changan Automobile and Guangzhou Automobile Group are collaborating with robovan start-ups, while Geely’s Farizon unit has launched robovan models. Southeast Asia and the Middle East are the top markets for Zelos, even though robovan charges there are lower than in Europe and the US. Zhang said revenue from the two emerging markets combined was double that of mainland China, driving up gross profit margins to above 50 per cent. Robovans began to emerge in the past two years amid the pursuit of commercialised self-driving technology, with logistics applications seen as the most feasible solution for Level four (L4) vehicles that can handle all driving tasks in restricted locations without requiring human intervention. The robovan market is led by Chinese players, with Neolix and Rino.ai being the other major players besides Zelos and Cainiao. Overseas expansion and net profit “are the same thing”, Zhang told the SCMP. He said Zelos had turned profitable on a per unit basis in China, while investments in research and development remained heavy. However, relatively low labour costs in India and strict compliance requirements in Europe mean those two markets are not targets for Zelos in the near term, Zhang said. But he added that the company was starting preparations for an entry into Europe in around five years.  China’s prowess in the automotive industry supply chain would help support Zelos’ overseas expansion, enabling cost advantages in global markets, according to Zhang. Beyond delivering higher margins, Zhang said wider adoption in overseas markets would help Zelos collect data at low cost, which can then be fed to the firm’s artificial intelligence models to update its systems. In addition, the deal with Cainiao’s driverless logistics unit would strengthen Zelos’ R&amp;D resources and accelerate the path to achieving a net profit, Zhang said. After the merger, the Zelos fleet size exceeds 20,000 vehicles, the world’s largest, lifting its market share in China to over 75 per cent. Zhang projected that robovans would account for 50 per cent of all logistics delivery vehicles in China within five years, earlier than in overseas markets. Zelos is preparing for an initial public offering (IPO) in Hong Kong, aiming to raise about US$600 million, according to reports. Zhang estimated Zelos would turn profitable as soon as the end of this year. But Zhang said an IPO was not the “destination”, rather, his goal was to provide autonomous mobility solutions. “No one can tell what will happen in 50 years. But no matter how the city changes, I’m collecting the latest data [for the ultimate solutions],” he said.</div>

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<p>Zelos Technology aims to expand its robovan fleet into Southeast Asia and the Middle East, where it could generate double the revenue compared to China. Co-founder Sean Zhang emphasizes the importance of AI capabilities for competitiveness. The company, which recently merged with Cainiao's autonomous vehicle unit, is preparing for an IPO in Hong Kong to raise $600 million. Zhang projects profitability by year-end and anticipates robovans will dominate logistics delivery vehicles in China within five years.</p>

Zelos looks to Middle East, Southeast Asia to turn a profit on robovan fleet