China expands EV charging to satisfy millions of EVs on the road.
Field Notes from the Comet Labs team in Beijing
While the conversation around electric vehicles (EVs) in the United States tends to be dominated by Elon Musk and Tesla, it’s really only the tip of the iceberg when it comes to the broader global market opportunity for the technology. And though automakers in the US and Japan were certainly influential in bringing about the first wave of EVs, they are no longer the leaders by a long shot.
Below, we’ll share some of our notes about the country that is now taking charge of the EV revolution:
China.
I. Background Overview
State of the Market
In 2016, China led the electric vehicle industry worldwide with nearly 1 million EVs on the streets. The sales volume of EVs in China alone exceeded 50% of the rest of the world. Now, China has taken the lead as the country with the fastest expanding EV charging infrastructure as well, gearing up for even wider adoption of EVs.
According to the National Energy Administration, there are over 141,000 EV charging stations in public areas in China as of December, 2016.
Recently, the Chinese government has made significant efforts to increase the number of EV charging stations in the nation through researching operating policies, making land plans, and more.
Value Chain
It turns out, as with most markets when you dig a little deeper, there are many stakeholders at play within the EV charging infrastructure stack (not including the vehicles themselves). We mapped a few of the major players in the diagram below to get a sense of where there are potential opportunities for new entrants.
II. Applications & Competition
Technology
Currently, charging technology in China includes:
- AC charging: charging time requires normally 5 to 8 hours
- DC charging: 150A — 250A
- Battery replacement: usually requires 8 to 10 minutes
- Wireless charging: Dongfeng Motors, cooperating with ZTE, built the first high-power wireless charging bus pilot with a charging power of 60kW. Beijing Automotive Group equipped its model EV150 with a wireless charging system through magnetic resonance that has an efficiency of 90.5% and a transmission distance could reach 200mm.
- DC high-power charging: Voltage 200V — 10,000V; Current 350A — 500A
- Fleet charging: Mixed solutions for charging multiple vehicles simultaneously for large operations, such as buses.
Problems with China EV Charging
- Most of the charging stations are distributed charging piles, or an individual slow / medium speed charger.
- Charging rates are generally low, and requires a long wait time.
- Most charging piles have high vacancy rates.
- Physical harm risks due to high voltage, though redundant safety features are being implemented.
Strengths of Building Centralized Charging Stations / Fleet Charging
- Easier to manage than distributed charging piles.
- Allows for optimizing energy consumption.
- Take full advantage of valley and normal hours, reducing pressure on the power grid.
- Optimize the layout of charging stations in large cities to reduce vacancy.
- Maximize utilization of the space required to install stations.
- Improve the efficiency of operations by centralizing management.
Competitive Landscape
As of 2016, TGOOD, State Grid, Wanbang NE (Star Charge), and Potevio make up 85% of the charging operating market in China. Several other players, including Tesla, are working to gain a foothold.
III. Regulations
To manage the EV charging market, each local government in China determines city-specific service fees. Additionally, prices are regulated by the electricity tariff.
A guidebook from the Chinese government — the National Development and Reform Commission — published in 2015 notes that by 2020, the number of EVs in China will exceed 5 million with 200,000 buses for public transportation. In order to satisfy the charging demands for these 5 million EVs, 12,000 centralized charging stations and 4.8M distributed charging stations have to be built by 2020.
As the world transitions toward renewable energy, EVs are going to transform the entire transportation ecosystem. Incumbent businesses built on the fossil fuel economy will have to reinvest in new infrastructure, or risk missing this wave of technological adoption.
When the question is not if EVs will happen, but when. In the US, we’re being given the opportunity to learn from China’s early steps into making EVs ubiquitous. The solutions that work will gradually get cheaper, and then it’s only a matter of time before we start seeing a similar trend take place here.
The Comet Labs Research Team in Beijing explores industry and AI technology trends in China, and seeks to understand how they might serve as helpful cases for startups in the United States and around the world.
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