Electric vehicle(EV) charging facilities
Electric vehicle(EV) charging facilities
Business Model Description
Charging stations provide charging services for new energy vehicles. models: 1) Charging operator-led model: Revenue comes from service fees. 2)Third-party charging service platform model: The platform integrate charging piles of different operators. Revenue is generated from charging service fees shared with operators and value-added service fees.
Expected Impact
Investment in charging facilities can promote low-carbon transformation,power load adjustment,power quality improvement, renewable energy consumption.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- China: Guangdong
- China: Tibet
- China: Liaoning
- China: Hunan
- China: Guizhou
Sector Classification
Infrastructure
Development need
Significant differences in terms of quality of the infrastructure exist between urban and rural areas in china. In rural areas, power grids are costly yet of poor quality, and water quality needs to be further improved. (1) China’s circular economy development faces great challenges including lack of standardization, difficulties in recycling low-value material etc. (2)
Policy priority
The 14th 5-Year Plan highlighted the importance of building a modern network of infrastructure that is smart, eco-friendly, safe, and reliable. (3)The State Council issued Action Plan for Cabon Peaking, in which promoting circular economy was listed among the ten major actions. (4)The ""No. 1 Central Document"" for 2021 also highlighted the need to imporve rural infrastructure (5)
"Gender inequalities and marginalization issues
Significant differences in the quality of infrastructure between urban and rural areas in China exist. Rural residents struggle to get access to quality and green infrastructure."
Investment opportunities introduction
The IOAs in the infrastructure sector center around low-carbon waste treatment, as well as building safer and smarter supply systems of water and electricity..
Key bottlenecks introduction
Infrastructure construction requires large amounts of investment, most of which is government-led or requires subsidies. In some fields, such as waste management, policies and regulations are to be improved; in the field of water and energy consumption, pricing mechanism is also in need of improvement.
Utilities
Development need
Growing electricity demand driven by economic growth and the accerlerated green transformation have posed challenges to the current power system. As renewable energy such as solar and wind are volatile in nature, a stable, safe and smart power system is essential to adapt to the increasing share of renewable energy in energy mix. (6)
Policy priority
The 14th Five-Year Plan proposed to enhance Ultra-High Voltage transmission, speed up the progress in transformation towards smart grid as well as the construction of smart microgrids, reinforce the connections of generation-grid-load-storage, boost consumption and storage of clean energy, and improve power transmission to remote areas. (3)
Gender inequalities and marginalization issues
Power supply, safety, and quality of rural power systems have been improved through rural grid construction and upgrading projects. However, the grid equipment in rural areas are still not smart enough compared with urban area. (7)
Investment opportunities introduction
The IOAs in this sector center around enhancing smart power systems and improving the grid's compatibility with multiple energy sources.
Key bottlenecks introduction
The current pricing mechanism for electricity should adapt to the new power system that focuses on new energy, so as to reasonably allocate the consumption cost of new energy among the power generators, the grids, and the customers.
Electric Utilities and Power Generators
Pipeline Opportunity
Electric vehicle(EV) charging facilities
Charging stations provide charging services for new energy vehicles. models: 1) Charging operator-led model: Revenue comes from service fees. 2)Third-party charging service platform model: The platform integrate charging piles of different operators. Revenue is generated from charging service fees shared with operators and value-added service fees.
Business Case
Market Size and Environment
> 25%
The number of China's electric vehicle charging facilities reached 1.68 million in 2020 and is projected to reach over 10 million by 2026. The correponding CAGR is about 37% from 2020-2026. (8)
Indicative Return
20% - 25%
According to Shenzhen Kstar Science & Technology Co., Ltd., Shenzhen Sinexcel Electric Co., Ltd., and Shenzhen Auto Electric Power Plant Co., Ltd., the average gross margin of new energy charging equipment business in 2020 was 23.22%. (9, 10, 19)
Investment Timeframe
Medium Term (5–10 years)
The average investment payback period of charging pile-related projects is 6.16 years; for power equipment leasing's smart upgrading projects it's 5.02 years; for the charging station and network construction and operation project, they are 5.66 and 7.81 years, seperately
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Capital - CapEx Intensive
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
China's transportation industry accounted for about 10% of China’s CO2 emissions, thus meeting carbon peaking and neutrality goals require decarbonization of transportation sector. However, the development of charging stations falls behind, hindering the prevalence of EV. (11)
Gender & Marginalisation
Regional differences exist in the penetration rate of charging facilities.
Expected Development Outcome
Increase the popularity of EV, contributing the decarbonization of transportation sector. In addition, charging station could also be used for power load adjustment which improves the flexibility of power system. (17)
Gender & Marginalisation
With the pilot projects of charging facility construction in key areas such as Beijing, Tianjin, Hebei, Yangtze River Delta, and Pearl River Delta regions, the number of charging stations will be significantly improved in western China cities, consequently reducing regional differences.
Primary SDGs addressed
13.2.2 Total greenhouse gas emissions per year
China's greenhouse gas emissions is around 15 billion tons of CO2 equivalent in 2020. (16)
China strives to achieve carbon peaking before 2030 and carbon neutrality before 2060.
Secondary SDGs addressed
Directly impacted stakeholders
People
Planet
Indirectly impacted stakeholders
Planet
Outcome Risks
Charging stations are installed in public parking spaces, they may have a negative impact on public space utilization rate and squeeze the parking spaces of gas-fueled vehicle owners.
Impact Risks
If regulations and maintenance are not in place, charging stations may be easily damaged and the parking spaces may be occupied by gas-fueled vehicles, resulting in lower utilization of charging stations. (12)
Impact Classification
What
It's essential to the sustainable development and promotion of new energy vehicles,to realize power load adjustment, power quality improvement, and renewable energy consumption. (17)
Who
New energy vehicle owners can enjoy more convenient charging experiences. The problem of vehicle charging when traveling can be solved.
Risk
If the supervision and maintenance are not in place, the utilization rate of the charging pile is reduced, and safety accidents may occur, a shortfall may appear in the installed power supply.
Impact Thesis
Investment in charging facilities can promote low-carbon transformation,power load adjustment,power quality improvement, renewable energy consumption.
Enabling Environment
Policy Environment
"(Policy document): In 2021, the State Council clearly stated in the ""Action Plan for Carbon Dioxide Peaking Before 2030"" that we should accelerate construction of green transport infrastructure to realize the 2030 carbon peaking goal. (15)"
"(Policy document): In 2021, the tate Council stated that the construction of facilities supporting the charging, battery swapping, and hydrogen fueling of new energy vehicles should be strengthened. (16)"
"(Policy document): In January 2020, the ""Planning for the Development of the New Energy Automobile Industry (2021-2035)"" published by the State Council stated that we should implement preferential policies for new energy vehicles and charging pile construction. (14)"
Financial Environment
Financial incentives: NDRC encouraged to improve financial supports, such as providing innovative special bonds, funds, insurance products and other financial instruments for charging facility construction and power grid renovation projects. (27)
Fiscal incentives: Financial policy support for the construction of charging piles as public facilities should be promoted. Local governments are encouraged to establish subsidy standards tied to service quality，issue preferential policies for high-quality sites and enhance subsidies for pilot projects. (27)
Other incentives: The Ministry of Commerce pointed out that qualified local governments are encouraged to issue subsidy policies for charging (replacement) facility construction and operation, and guide enterprises and institutions build charging facilities that cover >= 10% of the existing parking slots.
Regulatory Environment
"(Regulation): In 2021, it is stated that the market regulation departments should reinforce measurement, supervision, and research on electric vehicle charging stations, make clear the basic information of local charging stations in operation, improve measurement appraisal services and capabilities. (26)"
"(Regulation): 2 departments jointly issued the ""Code for Designing Electric Vehicle Charging Stations"", witch specified provisions for charging stations' size, site selection, layout, charging system, power supply system, power distribution system, energy saving, and environmental protection, etc."
"(Regulation): The ""Code for Designing Electric Vehicle Charging Stations and Charging Piles"" specified the principles and technical requirements for the design of EV charging stations and charging piles, which can be applied to the design, new construction, expansion, and reconstruction."
Marketplace Participants
Private Sector
Important charging pile companies include Qingdao TGood EVC Co., Ltd.,BYD Co., Ltd.,Winsky New Energy, etc. Important investors in the charging pile industry include Global Logistic Properties Investment Management (China) Co., Ltd., State Power Investment Ronghe Investment Co., Ltd., etc.
Government
Relevant documents have been issued by many local governments to promote the development of electric vehicles and charging station construction, such as Beijing, Shanghai, Tianjin, etc.
Target Locations
China: Guangdong
China: Tibet
China: Liaoning
China: Hunan
China: Guizhou
References
- (1) National Development and Reform Commission, Ministry of Finance, Ministry of Housing and Urban-Rural Development, State Administration for Market Regulation, and National Energy Administration, 2020, Opinions on the High-Quality Development of Urban Water, Electricity, Gas and Heating Industry By Reviewing and Standardizing Charges, http://www.gov.cn/zhengce/content/2021-01/06/content_5577440.htm
- (2) National Development and Reform Commission, 2021, Fourteenth Five-Year Plan for the Development of Circular Economy, http://www.gov.cn/zhengce/zhengceku/2021-07/07/5623077/files/34f0a690e98643119774252f4f671720.pdf
- (3) Central Government, The Outline for the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives through the Year 2035, http://www.gov.cn/xinwen/2021-03/13/content_5592681.htm "(4) State Council, 2021, Action Plan for Carbon Dioxide Peaking Before 2030, http://www.gov.cn/zhengce/content/2021-10/26/content_5644984.htm
- (5) State Council, 2021, Opinions on Comprehensively Promoting Rural Revitalization and Accelerating the Modernization of Agriculture and Rural Areas, http://www.moa.gov.cn/ztzl/jj2021zyyhwj/zxgz_26476/202102/t20210221_6361865.htm
- (6) China Electricity Council, 2021, 2021 Electricity & Other Energy Statistics, https://www.cec.org.cn/upload/1/editor/1640595481946.pdf
- (7) Popular Utilization of Electricity, 2021, Current Situation and Problems of Rural Power Grid Development in China, http://www.chinaqking.com/yc/2021/3052106.html
- (8)China Institute with Professional Industry Research，2022，China Electric Vehicle Charging Pile Industry Development Prospect Forecast and Investment Strategic Planning Analysis Report，https://www.hemeirv.com/cars_1024527
- (9) Shenzhen Kstar Science & Technology Co., Ltd., 2021, 2020 Annual Report https://data.eastmoney.com/notices/detail/002518/AN202103301478624913.html
- (10) Shenzhen Sinexcel Electric Co., Ltd., 2021, 2020 Annual Report, http://quotes.money.163.com/f10/ggmx_300693_7140470.html
- (11) ChinaIRN.COM, 2021, Charging Pile Construction Policy Planning in China and 2022 China Charging Pile Scale and Demand Outlook, https://www.chinairn.com/hyzx/20211130/125952394.shtml
- (12) NEWS CHINA, 2021, Queuing 4 hours for charging: How awkward are new energy vehicle owners on highways? https://mp.weixin.qq.com/s/JGvx5iG1MeaxO4bpuSqNjg
- (13) World Resources Institute, 2020, Quantifying the Grid Impacts from Large Adoption of Electric Vehicles in China, https://www.wri.org.cn/report/2020/06/Quantifying-the-Grid-Impacts-CN
- (14) State Council, 2020, Planning for the Development of the New Energy Automobile Industry (2021-2035), http://www.gov.cn/zhengce/content/2020-11/02/content_5556716.htm
- (15) State Council, 2021, Action Plan for Carbon Dioxide Peaking Before 2030, http://www.gov.cn/zhengce/content/2021-10/26/content_5644984.htm
- (16) State Council, 2021, Guiding Opinions of the State Council on Accelerating the Establishment of a Sound Economic System with Green, Low-carbon and Circular Development, http://www.gov.cn/zhengce/content/2021-02/22/content_5588274.htm
- (17) QQ.com, 2021, Future development trend of charging piles, https://new.qq.com/omn/20210809/20210809A03KKM00.html
- (18) Leadleo Research Institute, 2020, Overview of China's new energy vehicle charging pile industry, https://xueqiu.com/9316031167/149090615
- (19) Shenzhen Auto Electric Power Plant Co., Ltd., 2021, 2020 Annual Report, http://static.cninfo.com.cn/finalpage/2020-07-25/1208075471.PDF
- (20) Qingdao TGood EVC Co., Ltd., 2021, 2020 Annual Report, https://aiqicha.baidu.com/annualreport?pid=20144708027057&year=2020
- (21) The Beijing News, 2021, Interview with Wang Yao at CAA, https://chejiahao.autohome.com.cn/info/9741505
- (22) National Business Daily, 2021, 6 Charging pile companies have received financing in 2 months, https://36kr.com/p/1299025372350848
- (23) TGQingdao TGOOD Electric Co., Ltd., 2020, Plan for for the Offering of Stocks to Specific Offerees on GEM, http://static.cninfo.com.cn/finalpage/2020-09-04/1208389535.PDF
- (24) East Group Co., Ltd., 2020, Plan for the Non-public Offerings of A-shares on GEM, http://file.finance.sina.com.cn/211.154.219.97:9494/MRGG/CNSESZ_STOCK/2020/2020-3/2020-03-07/5925780.PDF
- (25) Shenzhen Clou Electronics Co., Ltd., 2015, 2015 Plan for the Non-public Offering of Stocks, http://static.cninfo.com.cn/finalpage/2015-10-29/1201736208.PDF
- (26) General Office of the State Administration for Market Regulation, 2021, Notice on Launching the Campaign of People's Livelihood Measurement, https://gkml.samr.gov.cn/nsjg/jls/202103/t20210329_327380.html
- (27) National Development and Reform Commission, 2022, Notice by the National Development and Reform Commission and Other Departments on Further Enhancing Electric Vehicle Charging Facilities and Ensuring Service Capacity, https://www.ndrc.gov.cn/xxgk/zcfb/ghxwj/202201/t20220121_1312634.html?code=&state=123