As of the end of 2017, there were nearly 450,000 installed charging stations (also called charging points or power points) across China, including 214,000 set up by the government for public use, up 51 percent since the end of the prior year. The remaining 232,000 were privately-owned units. At the time, the proportion of ownership of electric vehicles (EVs) to charging stations in the country was below 4:1.
However, since the beginning of this year, a substantial consolidation across the market has taken place, with some firms going bankrupt, others simply shutting their doors before the inevitable happened, and those that were publicly traded being delisted. Many of the survivors merged or were acquired. As the EV market in China continues to expand rapidly, the landscape of the charging infrastructure sector is also changing dramatically.
Despite the string of bad news, several adventurous investors are accelerating their investments in the sector with confidence. They believe in the huge potential of the charging infrastructure market and are leveraging the opportunities and addressing the challenges that rose to the forefront as a result of the vast changes taking place, or have chosen to navigate the dramatic changes with the support of a meaningful partner.
According to the EV Charging Infrastructure Development Guidelines (2015-2020) issued by the National Development and Reform Commission, the country plans to build 12,000 centralized charging stations and 4.8 million distributed charging stations with the aim of meeting the needs of 5 million EVs in China by 2020.
Based on the development guidelines, a market research organization predicts that the annual production and sales of EVs may exceed 5 million units in China by 2020, when the investment in the charging station sector is expected to have exceeded 184 billion yuan (approx. US $27 billion). In addition, that level of investment in infrastructure for an EV charging network would generate in 2020 annual revenues of 55.8 billion yuan (approx. US $8.1 billion), of which 23.3 billion yuan (approx. US $3.4 billion) would be profit.
The huge potential of the 100-billion-yuan (approx. US $15 billion) charging infrastructure market is attracting investors. China is leading the world in terms of the adoption of charging facilities, however, players in the sector are also facing challenges from poor access to, and inefficient utilization of, the existing charging facilities.
As a result, Chinese charging infrastructure operators have been forced to shift their attention from construction of new facilities to solving operational issues as they must improve the utilization of charging facilities and services. In addition to facing challenges from the heavy investment required to build a charging infrastructure network, the long investment cycle and unclear profit model, small- and medium-sized operators are also at risk of being eliminated due to shortage of funding.
With the growing pressures being faced by players in the market, the Urban Charging Partners program was recently unveiled in China. The program aims to support the growth of the bottom- and mid-tier charging markets by sharing resources by delivering a wide range of solutions for the operation of intelligent charging facilities, redirecting of EVs to specific charging points, development of an EV service system and support in building charging stations with suitable facilities for accepting payment. With the program, charging infrastructure operators with proven operational ability and resource advantages will be in a position to build a network of charging service providers that provide intelligent and efficient services across China.