Alibaba's Cainiao Merges With Zelos in $2B Robovan Deal to Build 20K-Vehicle Fleet

Alibaba's logistics arm Cainiao is merging with Chinese autonomous vehicle company Zelos in a deal that will create a business valued at approximately $2 billion, according to sources familiar with the matter. The merger will combine Cainiao's logistics expertise with Zelos's robovan technology to build a fleet exceeding 20,000 autonomous delivery vehicles.

The deal represents a significant consolidation in China's autonomous delivery sector, where companies have been racing to deploy self-driving vehicles for last-mile logistics. Zelos, which specializes in robovans - autonomous vans designed for package delivery - has been operating in the Chinese market since 2020 and has accumulated substantial operational data from its existing fleet.

Cainiao, Alibaba's logistics affiliate, has been investing heavily in automation and autonomous delivery solutions as part of its broader strategy to reduce labor costs and improve delivery efficiency. The company operates one of China's largest logistics networks and has been testing autonomous vehicles in several cities.

Sources indicate the merged entity will focus on scaling operations across China's major metropolitan areas, with plans to deploy the 20,000+ vehicle fleet over the next three years. The robovans are designed to operate in both urban and suburban environments, handling everything from small packages to larger freight deliveries.

The merger comes as Chinese tech giants intensify their investments in autonomous logistics. Companies like Meituan, JD.com, and Baidu have all been developing their own autonomous delivery solutions, but Cainiao's partnership with Zelos represents one of the largest consolidations in the sector to date.

Industry analysts note that the timing is strategic, as China's e-commerce market continues to grow and labor costs rise. Autonomous delivery vehicles offer a potential solution to both challenges, though widespread adoption still faces regulatory hurdles and technical challenges around safety and reliability.

The deal also highlights Alibaba's continued investment in logistics technology despite broader economic headwinds in China. Cainiao has been a key differentiator for Alibaba's e-commerce platforms, helping the company compete with rivals like JD.com, which has traditionally been known for its strong logistics capabilities.

Financial details of the merger remain limited, though sources suggest the deal values Zelos at a premium to its previous funding rounds. The merged company is expected to seek additional funding in the coming months to support its expansion plans.

This consolidation in the autonomous delivery space mirrors similar trends in other technology sectors, where companies are merging to achieve scale and compete more effectively against larger rivals. The success of the Cainiao-Zelos merger could prompt further consolidation in China's autonomous vehicle industry.

Regulatory approval for the merger is still pending, though sources indicate that Chinese authorities have been supportive of autonomous vehicle development as part of the country's broader technology and manufacturing strategy.

The merged entity will be headquartered in Hangzhou, where Alibaba is based, and will operate under the Cainiao brand. Zelos's existing management team is expected to remain in place to oversee the autonomous vehicle operations.

This deal represents one of the largest investments in autonomous delivery technology in China and could accelerate the timeline for widespread commercial deployment of robovans in the country's logistics networks.