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China's bike-sharing companies eye electric-car sharing service

With China's money-burning bike-sharing market nearing a saturation, the country's bike-sharing companies have set their sights on developing and building battery-powered bicycles and cars, as the Chinese government aims to replace gasoline cars with new energy cars.

Recently, Youon, the first listed bike-rental company in China, and BAIC BJEV, BAIC Motor's new energy vehicle unit, signed a strategic cooperation agreement to jointly develop a new-generation Internet-based, multimedia information technology-driven pure electric car which is tailored for Youon, in an effort to promote the smart transit business.

Youon completed an initial public offering at the Shanghai Stock Exchange in August, a move that guarantees relatively stable capital base. And last month, the Ant Financial-backed company, which is mainly engaged in operating government-funded bike rental systems with fixed return docks, bought a 100 percent stake in bike-sharing service Hellobike, setting a merger trend in China's cutthroat bike-sharing market.

According to an announcement, BAIC BJEV will provide Youon with a full range of industry-leading technological and maintenance support on a preferential basis. The two companies will work together to integrate the resources of technology, service and finance under a unified platform, which will focus on the research and development of battery and vehicle control system and the cascaded utilization of power battery, said the announcement.

The strategic collaboration with the Beijing-based carmaker shows Youon's ambition to tap the world's biggest electric car market at a time when the Chinese government is stepping up efforts to promote the production and sales of green energy cars to alleviate chronic pollution problems.

Previously, Youon announced its plans to establish an urban shared green travel system comprising of bikes with fixed locking poles, free-floating bikes, electric power-assisted bicycles and battery-powered cars.

However, analysts say that Youon's electric car ambition might be partly thwarted by the challenges from the domestic traditional carmakers and global automobile producers, which are scrambling for the Chinese electric car market by successively setting up manufacturing facilities in the country in partnership with local players. In addition, the shared car business requires big investment and faces obstacles such as industry regulations.

So far, most of the famous global carmakers doing business in China including General Motors, Volkswagen, Ford and the Renault-Nissan Alliance have signed agreements to establish joint ventures with local partners to make electric cars.

Last week, the China Passenger Car Association published a series of statistics, which said that 65,000 new energy cars were sold in China in October, representing an increase of 12 percent from September. Sales of pure electric cars in the month jumped as much as 84 percent from a month earlier, according to the statistics. The association predicted that carmakers would ratchet up the production and sales of new energy cars in 2018 due to speculation that the government might roll out more favorable policies and measures.

Besides Youon, China's largest bike-sharing startup Mobike, which occupies more than 90 percent of the market together with Ofo, has also joined the competition in the shared electric car market.

According to an article published on the official WeChat public account of the Guian New Area News, a newspaper jointly operated by Guizhou Daily Media Group and the Party Committee of the Guian New Area in Guizhou Province, Mobike, the management committee of the Guian New Area, Guian New Area Development and Investment Co. and local electric car producer Xinte Electric have signed an agreement that allows the four partners to jointly establish a cloud-based smart transit system and an operation platform for shared electric cars. According to the agreement, Xinte Electric will produce a specially designed electric car for Mobike, which is dubbed as Mocars, while Mobike provides big data needed to develop the electric car.

Although producing electric cars appears to be a giant project for Mobike, the bike-sharing startup already made its first attempt in combining battery sharing with bike sharing. Last week, Mobike tested its electric bike which is powered by a portable, plug-in battery that can be shared in the southeastern Chinese city of Shaoxing. The battery, which is called "energy chip", can enable the bike to run 8-10 kilometers.

Mobike's move steers clear of a regulation that discourages the business of electric bike with a built-in battery, because the "energy chip" can be taken away when the ride is over.

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