China is pushing forward the development of new energy vehicles, in particular electric vehicles, consistent with its status as the world's largest car market and auto-producing country, as well as the world's largest exporter of new energy vehicles.

With the US auto industry having been hit hard and Toyota in recent troubles, the Chinese automotive industry is eager to move ahead. The State Council has again expressed clear support for demonstration and popularization of new energy vehicles, and the Chinese state-owned energy giants have begun preparations to build an electric charging network.

In the past few months, creating such a network, the key element of popularizing electric cars, has come to be a premier focus from being nowhere on the agenda. The State Grid, CNOOC, China Southern Power Grid, Sinopec, and CNPC have all stated intentions to get into the act, a positive signal for the large-scale introduction of electric cars in China.

Sinopec Group and the Beijing Municipal Government are teaming up. Sinopec's existing large refueling stations in the city will be turned into comprehensive service stations for refueling and charging to combine operating costs for powering different types of cars.

In the future, Sinopec's network will gradually increase the number of integrated refueling stations, expanding from Beijing to neighboring Hebei and Tianjin, extending the radius of activity and speeding up the popularization of pure electric vehicles.

Last year, CNOOC signed an agreement with Tianjin Jinneng Investment Company, investing 5 billion yuan in Tianjin Lishen Battery Joint Stock Co., Ltd., a manufacturer of lithium batteries for electric vehicles, to construct 20 battery production lines in a new plant in Tianjin. In addition, the company is also considering the construction of battery replacement stations nationwide.

CNPC has been paying close attention to the development trend of new energy vehicles, including the possibility of equipping gas stations with charging stations, though in the short term, its key consideration is still products such as coal-bed methane and shale gas, so supplying natural gas for vehicles seems its most advantageous field. While equipping its stations with charging devices is not technically difficult, the big bottleneck at present is the long time it takes to charge a car. CNPC is not now eager to promote the model.

Proposed charging stations come in two modes. One would be to recharge the pure electric vehicle at the station using a battery charging machine. The disadvantage of this model is the length of time owners need to wait in the charge station. The other model is to remove the battery from the car and swap it for a new battery. Were this model adopted, large amounts of batteries would have to be stored at stations.

Either model would place high requirements on charging station sites. Present fueling stations in urban and rural areas are the ideal places. The total number of Sinopec gas stations is 30,000+, while CNPC works around 18,000. If such large networks were converted to gasoline and electricity refueling, the performance of the two groups would be bound to feel a positive impact.

Both models, though, are still in the exploration and trial stage. Despite having little effect on short-term performance, pure electric cars not being yet prevalent, in the long run this is definitely the direction. The first movers will have the advantage in standard-setting and early market share.

The intention of state-owned energy giants to construct charging stations indicates that state ministries and commissions will release relevant supporting policies and tax policies soon to subsidize the purchase of private electric vehicles. Public awareness of electric vehicles has reached a significant level, and the concept of driving electric vehicles has been formed.

The latest survey from the Ernst & Young Center for the global automotive industry shows that among 1000 driver's license holder in the US, 10% of respondents say they will consider buying plug-in hybrid vehicles or electric vehicles. Ling Bailang, the director of China's auto market marketing for Ernst & Young Accounting, says the demand for new energy vehicles in the US will lead to increasing import of such models from Chinese auto manufacturers. In addition, if infrastructure and technical research and development, as well as the costs, can be improved, China's new energy auto market will reach a breakthrough in around two years.

Charging stations, batteries and vehicle mileage, and costs are three big challenges for new energy vehicles entering the mainstream market. China has advantages in all these areas. Ling Bailang believes the export of new energy vehicles will not only expand product lines, but also establish Chinese brand images in the international market.