Shanghai powers up EV hub with £2.8bn investment programme

China's position as one of the world's leading markets for electric vehicles (EVs) was underlined yesterday when government officials in Shanghai announced plans to invest 30bn yuan (£2.86bn) in the sector by 2012

According to reports in the China Daily newspaper, the city will build 25,000 charging stations for battery or hybrid power vehicles over the next two years.

Speaking at the International Forum on Chinese Automobile Industry Development in Tianjin, Wang Zhe, an official with Shanghai's new energy automobile promotion office, said the city was aiming to establish itself as one of the world's largest hubs for EVs.

"With government support in purchasing, R&D and infrastructure, Shanghai will be able to produce 100,000 new energy vehicles every year, including 60,000 passenger vehicles by 2012," he said. "About 20,000 of them will be for private use."

The city is also applying to the National Development and Reform Commission for additional subsidies for private buyers of other alternative energy vehicles.

The news came as state-backed news agency Xinhua reported last week that auto sales in China jumped 55.7 per cent year on year to 1.22 million units in August thanks to a new subsidy scheme for energy-saving vehicles.

The government announced a trial scheme in June which offers subsidies of up to 60,000 yuan for hybrid and electric cars in five cities, including Shanghai, as part of efforts to reduce emissions and kick-start the development of green technology.

Last year China's auto sales hit 13.64 million units, overtaking the US for the first time to become the world's largest auto market and both domestic and foreign manufacturers are moving fast to capture market share in the nascent but fast-growing electric car and hybrid sector.

For example, French car maker PSA Peugeot Citroen announced over the weekend it is on track to build a third car plant with Dongfeng Motor Group in China and will look to take advantage of the new subsidies.

Meanwhile, Nissan announced on Saturday that it was open to a green car alliance
with Chinese auto makers, while GM has also announced firm plans to launch its electric model the Chevy Volt next year in China.