bp ev - BP Steps Further into EV Market by Funding NIO Capital

British Petroleum (BP PLC), one of global oil giants, announced that it will inject $10 million into an investment fund backed by Chinese electric-car maker NIO, in order to expand into China’s fast-growing new-energy vehicle and mobility market for new opportunities.

The investment in the fund established by NIO Capital was made by the venture capital arm of the energy giant, BP Venture, who said it will not engage in daily management and investment decision of the fund.

The fund was set up to drill for opportunities in electric vehicles, new-energy infrastructure, intelligent driving system and also new materials including batteries.

Early before the investment, BP and NIO signed in May a memorandum of understanding (MoU) to establish a long-term partnership aimed at the joint exploration of opportunities in emerging sectors such as NEV and internet-based transport in China.

The partnership will be concentrated on building worldwide electric-vehicle charging networks, a NIO Capital partner said.

China has led the global new-energy vehicle industry, helped by a bundle of government supports of policies and subsidies intended for tackling with the country’s worsening environment and energy shortage. Last year, the country sold more than half of electric vehicles produced all over the world.

China set a goal to elevate its annual EV sales to 7 million by 2025 and aims to spread nationwide about 500,000 public charging stations by 2020.

In consideration of China’s huge and growing demand, Swiss bank UBS raised recently its forecast on global EV sales, expecting almost one of every six cars sold globally to be electric by 2025.

Traditional energy majors like BP have increasingly set foot in the booming sector. In June, BP bought British electric-car charging operator Chargemaster. At the beginning of 2018, BP spent $5 million in funding an American manufacturer of mobile rapid EV charging systems, planning to roll out charging units at some of its gas stations in Europe this year.

Read Also: Oil Giant BP Taps Into Electric Car Charging Market

NIO, which was founded in 2014, is well known for its internet giant investor including Baidu, JD.com and Tencent. It launched its first electric vehicle model for mass production, the ES8, last year. The seven-seat SUV will be sold at only half the price of Tesla’s comparable product Model X, making it extremely competitive in the EV market.

NIO Capital didn’t tell the specific amount that has been raised for the fund. NIO has taken broad and heavy investment in businesses related to electric-vehicle manufacturing and services through NIO Capital.

It was reported that NIO is preparing to raise $2 billion of fund through an initial public offering (IPO) in New York by the end of this year.

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