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Japanese oil refiner Idemitsu Kosan Co Ltd is to move into the car market with plans to launch an electric vehicle next year at its 6,400 petrol stations via a joint venture with unlisted automaker Tajima Motor Corp.

The move shows how the oil refiner is stepping up its transformation into a supplier of low-carbon energy and materials as local oil demand drops due to a shrinking and ageing population that consumes less fuel.

Idemitsu and Tajima will form a new company, called Idemitsu Tajima EV, in April, and aim to unveil their first vehicle in October this year and start selling the product next year, with a price tag of between 1-1.5 MM yen ($9,491-$14,237).

The companies hope the new model, an ultracompact 4-seater electric vehicle with a driving range of up to 120 km and a maximum speed of 60 km per hour, will draw demand from individuals and businesses using cars for short distances for shopping and deliveries.

The car, 2.5 meters long and 1.3 meters wide, is smaller than that of conventional minivehicles in Japan.

“We believe there is about 1 million potential demand for ultracompact EVs as it is safer than bicycle or small motor bike and easier to drive than conventional minivehicle,” Idemitsu President Shunichi Kito told a news conference.

“We plan to offer various services including sharing and subscription of the EV at our 6,400 petrol stations,” he said.