“Charging Pile Industry Chain: Which Segment is the Most Profitable?”

The charging pile industry chain is roughly divided into three segments. In recent years, as companies have expanded their upstream and downstream operations, the boundaries have become increasingly blurred. Let’s explore these segments and identify which part of the chain is the most profitable.

Upstream: Components Manufacturers
The upstream segment mainly consists of manufacturers of standardized electrical components such as motors, chips, contactors, circuit breakers, casings, plugs, and sockets. These components are essential for the production of charging piles, but the profit margins in this segment are generally lower compared to other segments.

Midstream: Construction and Operation
The midstream segment involves the heavy asset industry of building and operating charging infrastructure. This requires significant upfront investment, making it highly capital-dependent. Companies in this segment directly interact with end consumers, making it the core part of the industry chain. Despite its central role, the high costs and long payback periods can limit profitability.

Downstream: Charging Operators
The downstream segment includes operators who run large charging stations or provide charging pile services. Companies like Teld New Energy and Star Charge dominate this segment, offering specialized third-party charging services. While they face intense competition, the ability to innovate and offer value-added services can lead to higher margins.

The Most Profitable Segment: Charging Modules
Among all segments, charging modules stand out as the most profitable. Acting as the "heart" of charging piles, these modules have a gross profit margin exceeding 20%, which is higher than other segments in the chain. Several factors contribute to the high profitability of charging modules:

1. Industry Concentration
The number of charging module suppliers has decreased from nearly 40 in 2015 to about 10 in 2023. Key players include in-house producers like Teld New Energy and Shenghong Shares, as well as external suppliers like Infypower, Youyou Green Energy, and Tonghe Technology. Infypower leads the market with a 34% share.

2. Technological Complexity
Each charging module contains over 2,500 components. The design of the topology structure directly affects the efficiency and performance of the product, while the thermal design determines its heat dissipation efficiency. This complexity creates a high technical barrier to entry.

3. Supply Stability
The stability of supply is crucial for customers’ production operations, leading to rigorous certification processes. Once certified, suppliers typically maintain long-term relationships, ensuring consistent demand and profitability.

Sichuan Green Science and Technology Co., Ltd.: Leading the Way in Charging Solutions