The China units of German auto giants Mercedes-Benz and BMW have received approval from the European Union's executive arm to establish a joint venture in the Asian country to operate an electric vehicle fast-charging network.

"The notified transaction would not raise competition concerns, given the limited impact on the European Economic Area," the European Commission said on Jan. 24, noting that it was examined under the simplified merger review procedure. "The JV shall develop and operate a public charging infrastructure network for battery-powered cars in China."

Mercedes-Benz Group China and BMW Brilliance Automotive, which will equally own the JV, plan to build at least 1,000 fast-charging stations with advanced technology and around 7,000 supercharging piles in China by the end of 2026, the pair announced on Nov. 30. The first batch is scheduled to become operational in key EV cities this year, they added.

Mercedes-Benz and BMW choose to set up a JV in China to cope with the country's highly competitive new energy vehicle market, according to an analyst. Building a supercharging network takes a long time and costs a lot with a slow return on investment, so the tie-up allows them to share resources, reduce costs, and speed up the building of the charging network, the person added.

If Mercedes-Benz and BMW can establish a supercharging network covering the whole world and achieve standardization and normalization, it will be significant for China's EV industry, the analyst noted.

BMW's car deliveries in China rose 4.2 percent to 825,000 units last year from the previous year, while that of Mercedes-Benz climbed 2.7 percent to 765,000 units.