Deal calls for network of charging facilities, seen as crucial to expanding sector
Oil giant China National Petroleum Corp (CNPC) and automaker BAIC Motor on Thursday announced plans to cooperate on developing and promoting new-energy vehicles (NEVs), another positive development in the nation's booming NEV market.
CNPC and BAIC signed an agreement under which the oil giant will build in some urban areas and highways the facilities to charge or provide natural gas to NEVs, according to a press release issued by CNPC.
CNPC will also help BAIC, which has invested heavily in the NEV sector, develop and promote its NEVs, the press release said.
The involvement of CNPC in the NEV segment is expected to give a substantial boost to the booming sector, which is also backed by the government, according to analysts.
According to the China Association of Automobile Manufacturers, a total of 279,200 NEVs were produced in the country during the first 11 months of 2015, an increase of 400 percent from the same period in the previous year. In November 2015, a total of 24,664 were sold, a year-on-year growth of 240 percent.
"This is no doubt a positive step in the development and promotion of NEVs in China," Su Hui, a senior analyst at the China Automobile Dealers Association, told the Global Times on Thursday.
Su noted that with CNPC's well-established, nationwide gas station network, it could help address some major issues that have limited the expansion of NEVs in China.
CNPC has more than 20,000 gas stations in China, its website showed.
Though heavily backed by the government, the NEV sector faces some limitations, with the scarcity of charging facilities constituting a major bottleneck.
Su said the cooperation between CNPC and BAIC is necessary as the country aims to expand the use of NEVs, amid severe air pollution and a global move toward alternative energy sources.
However, the development of NEVs should be treated as a national strategy with uniform rules and standards, Su noted. The cooperation of two or even more companies is not enough by itself to expand the NEV sector in the vast Chinese vehicle market.
China has stepped up efforts to expand the NEV-related infrastructure. In a document released on October 9, the State Council, China's cabinet, said that a charging system sufficient for 5 million NEVs is expected to be built by 2020.
Starting this month, a nationwide standard for charging facilities took effect, which is a great boost to the sector, analysts have said.
Charging standards used by different NEV makers could vary in some technical details, so a nationwide standard could make charging more convenient for users and reduce those technical discrepancies, analysts said.
"The new uniform standard could help convince potential investors, as some of them have been hesitant to put money into charging facilities given the varied standards," Gao Jian, general manager at Shanghai Gaotai Information Technology Co, told the Global Times in an earlier interview. Gao's company specializes in building charging facilities and promoting NEV rentals.
Local governments have also announced policies to support NEVs. For instance, NEV buyers in Shanghai and Beijing can get car plates without going through each city's car plate lottery or auction.
Under the agreement signed on Thursday, CNPC and BAIC will also set up a lab to improve gasoline quality, according to the CNPC statement.
