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Sunday, November 7, 2010

Siemens Close to Signing Electric Car Charging Contract in China

Siemens AG, Europe’s largest engineering company, said it is close to signing a contract to supply a Chinese city with electric-vehicle charging infrastructure.

The company expects to complete a deal this month to provide customized charging posts for one city, Song Xiao, the Shanghai-based president of Siemens China Smart Grid, said in an interview in Shenzhen, China on Nov. 6. He declined to name the city as the deal hasn’t yet been approved by the government.

Siemens will install the chargers in the city within three months, Song said. The Munich-based company has talked with Chinese utility companies and cities including Shanghai, Guangzhou and Chongqing about providing charging infrastructure, he said.

Siemens, whose businesses include high-speed trains, medical equipment and power turbines, is seeking to provide electric-vehicle charging and components for automakers such as General Motor Co., Nissan Motor Co. and Volkswagen AG in the world’s biggest auto market. China is offering buyers of plug-in hybrids and pure electric cars subsidies of as much as 60,000 yuan ($9,000) to help cut pollution and reduce oil dependency.

Shares in Siemens rose 0.3 percent to 83.94 euros in Frankfurt trading on Nov. 5. The stock has risen 31 percent in 2010.

Electric Vehicle Components

Siemens said it is also in discussions with domestic and foreign automakers in China to provide components for electric cars, said Cheng Mei-Wei, chief executive officer of Siemens Northeast Asia.

The electric-vehicle industry will provide “multi-billion dollars of opportunity” to companies such as Siemens, said Cheng, who joined the Munich-based engineer from Ford Motor Co. in May.

Siemens said on Nov. 6 it won a contract to provide information technology and service support to London’s planned electric-vehicle charging network through November 2013.

The company’s electric vehicle-related businesses include supplying batteries and other components, charging infrastructure, as well as grid-management expertise, Cheng said.

Automakers are under pressure from governments, environmental groups and consumers to sell models that consume less gasoline and emit fewer gases linked to global warming. China’s government aims to subsidize at least 4 million of these cars by 2012.

China’s government may invest more than 100 billion yuan in alternative-energy vehicles during the next 10 years to boost the industry, the Shanghai Securities News said in August without saying how it obtained the information.

Siemens’ Cheng, based in Beijing, declined to provide sales or profit targets for Siemens in China.

“China’s one of the largest markets for any industry sector and it has the highest growth rate for any market,” Cheng said. “When you add the size of the market to the speed of the growth, it becomes very, very important.”

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