SHANGHAI, China - Rental car company Hertz Global Holdings and General Electric plan to partner in offering electric vehicles in China and expanding the charging networks needed to run them.
An agreement signed in Shanghai's "Auto City" of Anting on Wednesday calls for building hundreds of charging stations in major Chinese cities including Shanghai and Beijing, Hertz executives said.
The plan aligns with the government's effort to promote commercialization of new energy vehicles as a way to reduce oil imports and help curb pollution. Setting up the infrastructure to charge such vehicles is viewed as a key hurdle toward enticing consumers to switch from cars that run on gasoline or diesel to electric vehicles.
"Working with our existing rental car network in China and partners such as GE, we are dedicated to helping build the necessary EV infrastructure in China and to create a new transportation solution that employs the latest technology and harnesses innovations being launched in China today," said Mark P. Frissora, Hertz's chairman and CEO.
The government has included building up the electric vehicle industry in its current five-year economic blueprint but despite its ambitious plans such vehicles are still a negligible part of China's auto sales due to their high cost and inconvenience compared with regular vehicles.
Incentives that are likely to be rolled out include easier access to license plates -- a key concern in cities like Shanghai, where the price of plates obtained in monthly auctions recently surged above $8,000 apiece.
"There's a bit of a chicken and egg component," said Richard Broome, the company's senior vice-president for public affairs.
"We're trying to provide some of the missing pieces," he said. So far, electric vehicle development has been "a little pie-in-the-sky. This will make it grounded in reality."
Among the vehicles that Hertz will offer is the E6, a pure electric vehicle made by BYD Autos, a battery maker turned car manufacturer that has been struggling to expand sales of both its conventional and non-conventional vehicles as competition in the industry heats up.
"We think that's the right car for our purposes. It's a good car and it's also got the range," Broome said. The E6 can go 240 kilometres on a single charge -- about the right distance for the kind of driving most customers would do in China's sprawling, traffic-jammed cities.
Park Ridge, New Jersey-based Hertz is not the first car rental company to offer electric vehicles in China. That honour goes to eHi Car, a local car rental company that is among the country's biggest.
But eHi Car's only non-conventional offering is the BYD F3DM, a hybrid plug-in sedan available for hire only in the northeastern city of Harbin, according to staff manning the company's rental hotline.
Hertz's plan calls for offering electric vehicles in Beijing, Shanghai and the southern boomtown of Shenzhen, where BYD is based, and then expanding the program beyond those cities.
Financial details of the project and charging network plan were not immediately available.
Hertz has already begun offering electric vehicles in several U.S. and European cities, including London, San Francisco, New York and Washington, D.C.
The company is looking to significantly expand its presence in China, where the top 10 car rental companies occupy less than 20 per cent of the market. The remainder is crowded with local mom-and-pop outfits, Broome said.
So far, more than three-quarters of China's rental market is for long-term leasing, mainly chauffeured vehicles provided by companies to their employees. But as Chinese become keener on exploring their vast countryside by car, daily individual rentals are surging, Broome said.
Customers will not pay a premium for electric vehicle rentals, he said, though costs are based on the value of the vehicles, which even with government subsidies of 60,000 yuan ($9,200) per vehicle remain relatively expensive compared with conventional autos. So far, most electric car use has been in fleets.
