China’s EV charging network could see a major boost

Tesla, China Unicom and the government are all planning massive investments in EV infrastructure

Tesla Motors Corp and China Unicom have signed a deal to build 400 charging posts at China Unicom stores nationwide and Supercharger stations in 20 Chinese cities.

The EV maker’s enigmatic founder, Elon Musk, has already said he plans to invest hundreds of millions of dollars into the region over the coming years.

The investment is Tesla’s largest in the country to date and will allow it to service most parts of China. Previously, Tesla has developed charging facilities with property developers like Soho China and China Yintai, so partnering with China’s second-largest mobile carrier will give it an even wider reach.

However, the deal could yet be dwarfed by a government policy that would see 100bn yuan ($16.27bn) invested into charging stations nationwide. The policy, leaked by two people close to the process, would hopefully spur private investment in the sector and bring the government closer to its goals of five million green vehicles on the road by 2020.

While Tesla’s stations will be exclusively reserved for its own vehicles, the government’s initiative would service most manufacturers, both foreign and domestic.

China is encouraging EV use in both the public and private sector and has set targets for EVs to comprise at least 30% of government vehicle purchases by 2016. Warren Buffet-backed BYD Co has already seen EV sales increase six-fold in the first half of 2014 as a result of favourable government policies.

EV adoption has fallen consistently short of government targets for the last few years, however sales tax exemption, vehicle subsidies and an accessible charging network could be the turning point for the sector.