Sinopec Scopes out Electric Auto Charging

(Caixin Online) China Petroleum & Chemical Corporation (Sinopec) announced its plan to participate in the construction of electric vehicle charging stations, marking the oil major's biggest foray into the new energy market.

Sinopec announced the formation of a 50 million yuan joint venture with Beijing Capital Scitech Group to focus on the electric auto charging business.

According to the Ministry of Science and Technology, Sinopec will evolve from its current fuel and gas station to offer comprehensive services including electric vehicle charging services to support large scale use of pure electric vehicles in Beijing. Such facilities are expected to be expanded into the neighboring Hebei Province and Tianjin Municipality, said the ministry.

The move is seen as a substantial step for Sinopec to move into the electric car charging market. Earlier, the oil company signed a strategic partnership agreement with Beijing Automotive Industry Holding Co. (BAIC), raising market speculations that Sinopec is preparing to enter the electric auto market.

According to Xu Heyi, president of BAIC, Beijing will see 500 units of pure electric powered taxis in operation in 2010, and the city has made preparations for charging station construction in which BAIC has confirmed participation.

With China's ongoing efforts to push forward the application of new energy vehicles, traditional oil companies have hastened their steps to enter the market in an aim to seek alternative growth points.

Another oil major, China National Offshore Oil Corporation (CNOOC), in July 2009 invested 5 billion yuan in Tianjin Lishen Battery Joint-stock Co to become a major shareholder. Lisen is one of China's top three lithium-ion battery markers and a supplier of Tianjin Qingyuan Electric Vehicle Co.

However, uncertainty remains in the prospect of electric auto charging business, as market participants lack a previous example of a mature model to pattern from either domestic or overseas markets.
 
In Shenzhen, southern China's Guangdong Province, two large charging stations have been set up with China Southern Power Grid, a contributor of 10 million yuan in investment for each station. However, potential hindrances for a nation-wide system come from the absence of a national standard on service fees and profit allocation for electric auto charging stations.

(Translated by HW)

Full article in Chinese: http://business.caing.com/2010-02-24/100120424.html