A national alliance initiated by 16 state-owned enterprises was formed yesterday to jointly develop electric vehicles in China - the first time such a tie-up was formed as the country gears up to develop new energy vehicles as it drives toward a green future.
The alliance, organized by the State-owned Assets Supervision and Administration Commission yesterday in Beijing, involves three car makers: FAW Group Corp, Dongfeng Motor Corp and Changan Automobile Group Co.
Other mega companies covering the oil, aerospace, information technology and electricity sectors, such as China National Petroleum Corp and State Grid Corp, are also in the alliance to help develop core technologies and support infrastructure construction.
The short-term target of the union is to unify technology standards before embarking on its long-term goal to acquire core technologies and form competitive Chinese electric car makers and brands. The alliance will also welcome other companies, research institutions and colleges.
"The participation of state-owned companies will definitely power the industry development," said analyst Wang Liusheng at Merchants Securities Co. "They could cooperate with each other and improve efficiency."
China aims to have 500,000 new energy vehicles on the roads in the next three years and green cars will account for 5 percent of total passenger car sales.
Besides an estimated 100 billion yuan (US$15 billion) investment over the next 10 years for fuel-efficient cars, China has also started subsidizing new energy vehicles to help boost market demand.
Changan Auto yesterday unveiled plans to invest 1 billion yuan to roll out energy-saving cars while China's third-largest auto group, Dongfeng, will invest 3 billion yuan in the next five years on eco-friendly vehicles. General Motors will launch its Volt electric car in China next year.
China wants to be the world's largest new energy vehicle market by 2020 with 5 million cars. It also aims to sell over 15 million units of the most fuel-efficient vehicles in the world annually by then.