Just after the New Year in the Year of the Dragon, domestic new energy vehicle companies are already “rattled.”
First, BYD raised the price of the Qin PLUS/Destroyer 05 Honor Edition model to 79,800 yuan; subsequently, Wuling, Changan and other car companies also followed suit, which is full of challenges. In addition to price cuts, BYD, Xpeng and other new energy car companies are also investing in overseas markets. Based on markets such as Europe and the Middle East, they will focus on exploring markets such as North America and Latin America this year. The expansion of new energy into the sea has become a rapidly growing trend.
Under the fierce competition in recent years, the global new energy vehicle market has entered a market-driven growth stage from a policy-driven early stage.
With the popularity of new energy vehicles (EVs), the charging market embedded in its industrial landscape has also ushered in new opportunities.
Currently, the three key factors affecting the popularity of EVs are: comprehensive cost of ownership (TCO), cruising range and charging experience. The industry believes that the price line for a popular electric car is about US$36,000, the mileage line is 291 miles, and the upper limit of charging time is half an hour.
With technological advancement and falling battery costs, the overall ownership cost and cruising range of new EVs have both declined. Currently, the selling price of BEVs in the United States is only 7% higher than the average selling price of cars. According to data from EVadoption, an electric vehicle research company, the average mileage trend of BEVs (pure electric vehicles) on sale in the United States has reached 302 miles in 2023.
The biggest obstacle hindering the popularity of EVs is the gap in the charging market.
The contradictions of insufficient number of charging piles, low proportion of fast charging among public charging piles, poor user charging experience, and charging infrastructure failing to keep up with the development of EVs are becoming increasingly prominent. According to McKinsey’s research, “charging piles are as popular as gas stations” has become the main factor for consumers to consider purchasing EVs.
10:1 is the 2030 target set by the European Union for the EV vehicle-to-pile ratio. However, except for the Netherlands, South Korea and China, the vehicle-to-pile ratio in other major EV markets around the world is higher than this value, and even tends to increase year by year. According to data from the International Energy Agency, the vehicle-to-pile ratio in the two major EV markets of the United States and Australia is expected to continue to rise.
In addition, the report shows that although the total number of charging piles in the Netherlands and South Korea has continued to grow in line with EVs, they have sacrificed the fast charging ratio, which will lead to a fast charging gap and make it difficult to meet user requirements for charging time.
In the early stages of the development of new energy vehicles, many countries expect to promote the development of the charging market by promoting the popularity of EVs, but this will result in insufficient charging investment in the short term. The investment scale, follow-up maintenance, equipment upgrades and software updates of charging stations all require continuous and large investments. Insufficient attention was paid to them in the early stage, resulting in the current uneven and immature development of the charging market.
At present, charging anxiety has replaced range and price issues as the biggest obstacle to the popularization of EVs. But it also means unlimited potential.
According to relevant forecasts, by 2030, global sales of electric vehicles will exceed 70 million, and ownership will reach 380 million. The global annual new car penetration rate is expected to reach 60%. Among them, markets such as Europe and the United States are growing rapidly, and emerging markets such as Southeast Asia and the Middle East are in urgent need of explosion. The global outbreak of new energy vehicles has provided a rare opportunity for China’s charging industry.
Xiaguang Think Tank, a consulting service brand under ShineGlobal, based on relevant industry data and user surveys, starting from the new energy vehicle market, conducted an in-depth analysis of the current development status and future trends of the charging industry in the three major markets of Europe, the United States, and Southeast Asia, and combined it with representatives of overseas companies in the charging industry. Case analysis and interpretation, the “Charging Industry Overseas Research Report” was officially released, hoping to gain insight into the charging market from a global perspective and empower overseas companies in the industry.
The energy transition in Europe’s land transportation sector is rapid and it is one of the largest new energy vehicle markets in the world.
Currently, EV sales and share in Europe are rising. The European EV sales penetration rate has increased from less than 3% in 2018 to 23% in 2023, with rapid momentum. The International Energy Agency predicts that by 2030, 58% of cars in Europe will be new energy vehicles, and the number will reach 56 million.
According to the EU’s zero-carbon emission target, the sale of internal combustion engine vehicles will be completely stopped in 2035. It is foreseeable that the European new energy vehicle market audience will transition from early adopters to the mass market. The overall development stage of EV is good and is reaching a market turning point.
The development of the European charging market has not kept pace with the popularity of EVs, and charging is still the main obstacle to replacing oil with electricity.
In terms of quantity, European EV sales account for more than one-third of the world’s total, but the number of charging piles accounts for less than 18% of the world’s total. The growth rate of charging piles in the EU over the years, except for being flat in 2022, is lower than the growth rate of EVs. Currently, there are about 630,000 available public charging piles (AFIR definition) in the 27 EU countries. However, to achieve the 50% carbon emission reduction target in 2030, the number of charging piles needs to reach at least 3.4 million to meet the growing demand for EVs.
From the perspective of regional distribution, the charging market development in European countries is uneven, and the distribution density of charging piles is mainly concentrated in EV pioneer countries such as the Netherlands, France, Germany, and the United Kingdom. Among them, the Netherlands, France and Germany account for 60% of the number of public charging piles in the EU.
The development difference in the number of charging piles per capita in Europe is even more obvious. In terms of population and area, the density of charging piles in the Netherlands far exceeds that of other EU countries. In addition, the regional charging market development within the country is also uneven, with the per capita charging power in areas with concentrated populations being lower. This uneven distribution is an important factor hindering the popularity of EVs.
However, gaps in the charging market will also bring development opportunities.
First of all, European consumers care more about the convenience of charging in multiple scenarios. Because residents in old areas of European cities do not have fixed indoor parking spaces and do not have the conditions to install home chargers, consumers can only use roadside slow charging at night. Surveys show that half of consumers in Italy, Spain and Poland prefer to charge at public charging stations and workplaces. This means that manufacturers can focus on expanding charging scenarios, improving its convenience and meeting user needs.
Secondly, the current construction of DC fast charging in Europe is lagging behind, and fast charging and ultra-fast charging will become market breakthroughs. Surveys show that more than half of users in most European countries are only willing to wait within 40 minutes for public charging. Users in growth markets such as Spain, Poland and Italy have the least patience, with more than 40% of users hoping to charge to 80% within 20 minutes. However, charging operators with traditional energy company backgrounds mainly focus on building AC sites. There are gaps in fast charging and ultra-fast charging, which will become the focus of competition for major operators in the future.
Overall, the EU’s bill on charging infrastructure is complete, all countries encourage investment in charging stations, and the main market policy system is complete. The current European charging market is booming, with hundreds of large and small charging network operators (CPOs) and charging service providers (MSPs). However, their distribution is extremely fragmented, and the top ten CPOs have a combined market share of less than 25%.
In the future, it is expected that more manufacturers will join the competition and their profit margins will begin to appear. Overseas companies can find their correct positioning and use their experience advantages to fill market gaps. However, at the same time, challenges also coexist with opportunities, and they need to focus on trade protection and localization issues in Europe.
Since 2022, the growth of new energy vehicles in the United States has accelerated, and the number of vehicles is expected to reach 5 million in 2023. However, overall, 5 million accounts for less than 1.8% of the total number of passenger vehicles in the United States, and its EV progress lags behind that of the European Union. and China. According to the goal of zero-carbon emission route, the sales volume of new energy vehicles in the United States must account for more than half by 2030, and the number of vehicles in the United States must exceed 30 million, accounting for 12%.
The slow progress of EV has led to imperfections in the charging market. As of the end of 2023, there are 160,000 public charging piles in the United States, which is equivalent to an average of only 3,000 per state. The vehicle-to-pile ratio is nearly 30:1, which is much higher than the EU average of 13:1 and China’s 7.3:1 public charging-to-charging pile ratio. To meet the charging demand for EV ownership in 2030, the growth rate of charging piles in the United States needs to increase by more than three times in the next seven years, that is, an average of at least 50,000 charging piles will be added every year. In particular, the number of DC charging piles needs to nearly double.
The U.S. charging market presents three major problems: uneven market distribution, poor charging reliability, and unequal charging rights.
First, the distribution of charging across the United States is extremely uneven. The difference between the states with the most and the fewest charging piles is 4,000 times, and the difference between the states with the most and the fewest charging piles per capita is 15 times. The states with the largest number of charging facilities are California, New York, Texas, Florida and Massachusetts. Only Massachusetts and New York are relatively well matched to EV growth. For the U.S. market, where driving is the preferred choice for long-distance travel, the insufficient distribution of charging piles limits the development of EVs.
Second, US charging user satisfaction continues to decline. A Washington Post reporter made an unannounced visit to 126 CCS fast charging stations (non-Tesla) in Los Angeles at the end of 2023. The most prominent problems encountered were low availability of charging piles, prominent charging compatibility issues, and poor payment experience. A 2023 survey showed that an average of 20% of users in the United States encountered charging queues or damaged charging piles. Consumers could only leave directly and find another charging station.
The public charging experience in the United States is still far from user expectations and may become one of the major markets with the worst charging experience except France. With the popularity of EVs, the contradiction between growing user needs and backward charging will only become more obvious.
Third, white, wealthy communities do not have equal access to charging power as other communities. At present, the development of EV in the United States is still in its early stages. Judging from the main sales models and 2024 new models, the main consumers of EV are still the wealthy class. Data shows that 70% of charging piles are located in the richest counties, and 96% are located in counties dominated by white people. Although the government has tilted EV and charging policies towards ethnic minorities, poor communities and rural areas, the results have not been significant yet.
In order to solve the problem of insufficient EV charging infrastructure, the United States has successively introduced bills, investment plans, and established government subsidies at all levels.
The U.S. Department of Energy and the Department of Transportation jointly released the “U.S. National Electric Vehicle Infrastructure Standards and Requirements” in February 2023, setting detailed minimum standards and specifications for the software and hardware, operations, transactions, and maintenance of charging stations. Once specifications are met, charging stations may be eligible for funding subsidies. Based on previous bills, the federal government has established a number of charging investment plans, which are handed over to federal departments to allocate budgets to state governments every year, and then to local governments.
At present, the U.S. charging market is still in the early expansion stage, new entrants are still emerging, and a stable competition pattern has not yet been formed. The U.S. public charging network operation market presents both head-concentrated and long-tail decentralized characteristics: AFDC statistics show that as of January 2024, there are 44 charging operators in the United States, and 67% of the charging piles belong to the three major charging points: ChargePoint, Tesla and Blink. Compared with CPO, the scale of other CPOs is quite different.
The entry of China’s industrial chain into the United States may solve many problems existing in the current US charging market. But like new energy vehicles, due to geopolitical risks, it is difficult for Chinese companies to enter the US market unless they build factories in the United States or Mexico.
In Southeast Asia, every three people own a motorcycle. Electric two-wheelers (E2W) have dominated the market for too long, but the automotive market is still in the development stage.
Promoting the popularization of new energy vehicles means that the Southeast Asian market must directly skip the stage of automobile popularization. In 2023, 70% of EV sales in Southeast Asia will come from Thailand, which is the leading EV market in the region. It is expected to achieve the EV sales penetration rate target of 30% in 2030, becoming the first country besides Singapore to enter the EV maturity stage.
But at present, the price of EVs in Southeast Asia is still much higher than that of gasoline vehicles. How can we get car-free people to choose EVs when they buy a car for the first time? How to promote the simultaneous development of EV and charging markets? The challenges faced by new energy companies in Southeast Asia are far more severe than those in mature markets.
The EV market characteristics of Southeast Asian countries are quite different. They can be divided into three categories according to the maturity of the automobile market and the start of the EV market.
The first category is the mature automobile markets of Malaysia and Singapore, where the focus of EV development is to replace gasoline vehicles, and the EV sales ceiling is clear; the second category is the Thai automobile market, which is in the late growth stage, with large EV sales and fast growth, and is expected to become The first countries other than Singapore to enter the mature stage of EV; the third category is the late-starting and small-scale markets of Indonesia, Vietnam and the Philippines. However, due to their demographic dividend and economic development, the long-term EV market has huge potential.
Due to different EV development stages, countries also have differences in the formulation of charging policies and goals.
In 2021, Malaysia set a goal of building 10,000 charging piles by 2025. Malaysia’s charging construction adopts an open market competition strategy. As charging piles continue to increase, it is necessary to unify CPO service standards and establish an integrated query platform for charging networks.
As of January 2024, Malaysia has more than 2,000 charging piles, with a target completion rate of 20%, of which DC fast charging accounts for 20%. Most of these charging piles are concentrated along the Straits of Malacca, with Greater Kuala Lumpur and Selangor surrounding the capital accounting for 60% of the country’s charging piles. Similar to the situation in other Southeast Asian countries, charging construction is unevenly distributed and highly concentrated in densely populated metropolises.
The Indonesian government entrusted PLN Guodian to build charging infrastructure, and PLN has also released targets for the number of charging piles and battery swap stations calculated in 2025 and 2030. However, its construction progress has lagged behind the target and EV growth, especially in 2023. After the growth of BEV sales accelerated in 2016, the vehicle-to-pile ratio increased sharply. Charging infrastructure may become one of the biggest obstacles to the development of EVs in Indonesia.
The ownership of E4W and E2W in Thailand is very small, dominated by BEVs. Half of the country’s passenger cars and 70% of BEVs are concentrated in Greater Bangkok, so charging infrastructure is currently concentrated in Bangkok and surrounding areas. As of September 2023, Thailand has 8,702 charging piles, with more than a dozen CPOs participating. Therefore, despite the surge in EV sales, the vehicle-to-pile ratio still reaches a good level of 10:1.
In fact, Thailand has reasonable plans in terms of site layout, DC proportion, market structure, and construction progress. Its charging construction will become a strong support for the popularization of EVs.
The Southeast Asian automobile market has a poor foundation, and EV development is still at a very early stage. Although high growth is expected in the next few years, the policy environment and consumer market prospects are still unclear, and there is still a long way to go before the true popularity of EVs. Gotta go.
For overseas companies, a more promising area lies in E2W power swapping.
The development trend of E2W in Southeast Asia has been improving. According to Bloomberg New Energy Finance’s forecast, Southeast Asia’s penetration rate will reach 30% in 2030, earlier than electric vehicles entering the market maturity stage. Compared with EV, Southeast Asia has a better E2W market foundation and industrial foundation, and the development prospects of E2W are relatively brighter.
A more suitable path for companies going overseas is to become a supplier rather than compete directly.
In the past two years, several E2W power swap start-ups in Indonesia have received large investments, including investors with Chinese backgrounds. In the fast-growing and highly fragmented power swap market, they act as “water sellers”, with more controllable risks and higher returns. More explicit. Moreover, power replacement is an asset-heavy industry with a long cost recovery cycle. Under the trend of global trade protection, the future is uncertain and it is not suitable to directly participate in investment and construction.
Establish a joint venture with local mainstream companies to establish a hardware assembly OEM battery replacement production line
Susie
Sichuan Green Science & Technology Ltd., Co.
sale09@cngreenscience.com
0086 19302815938
www.cngreenscience.com
Post time: Mar-13-2024
