China’s largest online video provider LeTV Holdings has upped the stakes in the country’s e-vehicle industry by acquiring a major stake in a vehicle charging station manufacturer.
Beijing Dianzhuang Technology Co, a startup and rents charging posts, said that it has received "tens of millions from LeTV," the Beijing-based China Daily newspaper reported on Monday. LeTV did not disclose a specific amount on its investment.
Building charging infrastructure is the biggest obstacle for the new-energy auto market in China, LeTV founder and CEO Jia Yueting told China Daily, adding that selling electric cars before building charging posts "won't work."
Dianzhuang is currently building the largest car charging station in Beijing, near the capital's South Railway station, which is capable of charging 100 e-vehicles.
The startup already has five centers across China and charging stations in over 30 cities, including Beijing, Shanghai, Guangzhou and Chengdu.
"The investment is a key step to expanding LeTV's presence in the new-energy automobile industry and we will work with more partners, such as equipment suppliers, in the future," said Sun Ke, a senior investment director of LeTV.
Earlier this year, LeTV announced its electric vehicle campaign that included the creation of an R&D team consisting of around 260 engineers in Silicon Valley. According to the company, the team has been working to produce an electric car model for more than a year.
The Beijing-based entertainment firm has also released a user interface for cars and said its new model will use the in-house LeTV operating system.
This is not the first time LeTV has delved into the electric vehicle sector. The company is a major shareholder in Atieva, a Silicon Valley designer of electric cars, including the Tesla Roadster, the Audi R8 eTron and the Chevrolet Volt.
Ding Lei, a LeTV senior official, is also the former vice president of SAIC Motor Corp. and co-founder of electric-car unit Leshi Super Electric Car Co.
Many other Chinese Internet companies have also thrown their hat in the ring. E-commerce giant Alibaba Group Holding and automaker SAIC Motor Corp. announced earlier this year that they will jointly invest 1 billion yuan ($156.2 million) to develop China's first "Internet car" by 2016 and build operational platforms for vehicles.
Tencent, Baidu and Xiaomi have also shown interest in the sector through partnerships and acquisitions.
Industry and information technology minister Miao Wei said in March that China encourages Internet companies to develop electric vehicles.
It is estimated that there are approximately 120,000 e-vehicle owners in China but only 30,000 charging posts.
But despite the lack of infrastructure, electric vehicles are gaining steam in the world's largest car market. According to China Daily, China sold more than 108,000 units of e-vehicles in the first eight months of 2015, a 270-percent rise from the same period in the previous years. Of these, the majority were pure electric models.
Citing consulting firms' estimates, LeTV said that the auto charging infrastructure sector will generate 33 billion yuan in 2016 and 100 billion yuan in 2020.