A Mercedes Benz new energy concept vehicle is displayed at the 19th International Automobile Industry Exhibition (Auto Shanghai 2021) in Shanghai, east China, April 28, 2021.Photo:Xinhua

BMW Brilliance Automotive and Mercedes-Benz Group China announced on Thursday a deal to establish a joint venture in China to cooperate on building a high-power charging network. The purpose is to provide Chinese new-energy vehicle (NEV) users with "premium charging services," reflecting another growth spot in China's vast auto market.

The 50:50 joint venture aims to establish a charging network with 1,000 high-power charging stations and around 7,000 high-power charging piles in China by the end of 2026. The first station is expected to open next year in regions with a high NEV user base, and more stations will be placed nationwide.

The charging stations are designed to be open to the public, while providing exclusive services for BMW and Mercedes customers, such as online reservations.

The deal is still subject to regulatory approval, according to the carmakers.

The move by the German auto giants reflects the growing demand in the Chinese NEV market, creating great opportunities for Chinese and foreign companies, industry analysts said.

China is a world leader in the NEV market. On July 3, the 20 millionth NEV produced in the country rolled off the assembly line in Guangzhou, just 17 months after the 10 millionth unit was made, according to Xinhua. The large number of NEVs in China is driving a huge demand for charging connectors.

On November 10, the China Electric Vehicle Charging Infrastructure Promotion Alliance announced that the organization runs about 2.52 million public charging piles, an increase of over 63,000 piles. From November 2022 to October 2023, the organization reported an average monthly increase of public charging piles of about 70,000 units.

China is the most important single market for both BMW and Mercedes. In 2022, BMW (including MINI) delivered a total of 791,985 vehicles in China, while Mercedes sold over 751,700 vehicles in the country, accounting for 37 percent of the Group’s sales.

BMW and Mercedes lag behind in charging station layouts in China. On November 4, Tesla posted on Weibo that the company has built a charging network in mainland China that includes more than 1,800 superchargers.