In 2015, China sold 330,000 new energy vehicles. The record-making sales volume made China the world’s No. 1 EV market. However statistics from China Association of Automobile Manufacturers (CAAM) show, charging poles numbered merely 57,000 by the end of 2015. While the central government planned to have 40,000 charging poles and 2,000 charging stations by the end of 2015.
The year 2016 will also be remembered as a landmark for Chinese NEV development, as a total of 302,000 NEVs, including fully electric and plug-in hybrid electric vehicles, were produced and 289,000 units were sold in the first three quarters of this year, up 93 and 100.6 percent respectively year-on-year, according to figures from CAAM.
Last year in Europe, Ford, Volkswagen, BMW and Daimler signed an initial agreement to create the charging network in what they said is an “unprecedented collaboration.” The goal is to quickly build up a sizable number of stations in order to enable long-range travel for battery EV drivers. And in China the charging infrastructure, the most important foundation for all NEVs, also catches up quickly thanks to clear policy guidance. NDRC data showed that there were about 81,000 public charging stations in China as of the end of June 2016, up 65 percent compared with the end of 2015.
Roadmap outlined for charging facilities
NEVs are expected to take a notable share of China’s auto market by 2030, according to a 15-year roadmap the Ministry of Industry and Information Technology released in October 2016.
According to the blueprint, such cars will account for 7 percent of total car sales in 2020 and 40 percent in 2030, reaching an estimated 15.2 million units. The roadmap, which the Society of Automotive Engineers of China was commissioned to draft, took more than 500 top auto experts in the country about a year to finish and has outlined an ambitious plan to build charging facilities across the nation.
By 2020, there will be at least 5 million charging posts in the country, no less than 20 million by 2025 and no less than 80 million by 2030: essentially, the same number as NEVs on the roads.
Ensure technology development of batteries and charging facilities
At the end of 2015, there were many electric cars registered as delivered, but later were found to be carrying unreliable batteries, or even had no batteries. Many EV manufacturers were found to be cheating with used batteries made with out-of-date technologies, and in September 2016 regulators announced penalties for five NEV manufacturers who illegally obtained government subsidies. And most local battery providers are lagging behind their international competitors in terms of quality and cost.
As a key application in new energy technology, battery and its switching facilities have always been in the industry spotlight. Several market leaders have been exploring the commercialization of battery switching services with little success due to the difficulties in industry chain integration, huge investments needed for building stations as well as engrained user behaviour.
At Auto Guangzhou 2016 last November, except various new EV models, there was also a display of the latest charging facilities and batteries, covering the varied sectors along the industrial chain, including charging station equipment, charging poles, battery modules and traction batteries.
“The new energy vehicle industry has made significant progress and achievements in R&D in critical technologies and key products,” said Wan Gang, minister of science and technology, during his visit to the show. “Overall development has reached the world’s leading level.” Wan stressed that “to ensure the progressiveness of the technologies, a full plan should be made for the next step in the development of new energy vehicle technology, and it should focus on synergy and mutual support among the technologies.
Wan made these remarks at a symposium with the nation’s experts in the NEV sector. Wan encouraged domestic carmakers to persist in developing their own approaches, which suit Chinese customers’ demand, and to master core competencies, in particular the key technologies in fuel cell battery-powered vehicles and fast charging facilities. He also urged Chinese companies to enhance their competitiveness, saying it would be extremely advantageous for China’s NEV program if the country had two or three globally competitive battery makers.
More charging facilities by government
China’s State Grid Corp. plans to build more charging stations to ensure a charging facility will be found within a certain radius in all areas. China Southern Power Grid also joined hands with State Grid for this initiative.
Currently, according to NDRC, China Southern Power Grid has reached a common agreement with State Grid to boost the development of the connected internet among EVs as well as emerging industries in the areas of internet and energy.
BAIC BJEV, a subsidiary of BAIC Group, a company that ranks 160th among the Fortune 500, has recently delivered the first few battery-switch stations for electric taxis in Beijing. So far, the stations form the largest network in the world for electric taxi battery charging and swapping. The first batch of 10 battery-swap stations commenced operations on October 29 and will offer services across eight urban districts in Beijing.
“In 2016, 50 EV battery charging and switch stations will be put into operation in Beijing and are expected to address the battery-swap needs of at least 6,000 EV taxis. Taxi drivers will be able to remove the battery once it starts running out of power and replace it with a fully-charged one at the nearest station. The station locations have been planned so that drivers will not need to travel more than five km for swapping batteries. By the end of 2017, Beijing will be home to 200 EV battery charging and swapping stations, which will meet the requirements of 30,000 EVs. “In preparation for the 2022 Olympic Winter Games in Beijing and Zhangjiakou, BAIC BJEV will replace 50,000 existing taxis with EVs equipped with switchable batteries,” said Xu Heyi, chairman of BAIC Group.
According to a document jointly released by NDRC and three other central departments, more EV charging stations will be built in pilot cities in Beijing, Tianjin, Hebei, Shandong and major cities in the Yangtze River Delta and Pearl River Delta regions, and electric power companies are asked to help with the construction of charging stations. In addition to the central government’s initiatives, municipalities such as Beijing, Shenzhen, Hangzhou and Guangzhou have formulated their own plans for EV and charging station popularization.
Opening up to private capital
Building a charging infrastructure is expensive. In May 2014, China began allowing private companies to invest in EV charging and replacement stations when China’s State Grid announced that it would support the development of privately-owned distributed energy resources.
These measures have been producing results. Private entrepreneurs, large Chinese car companies, private equity funds and companies with excess cash are all looking to get involved. Investments are being made in companies that manufacture charging systems; companies that construct and operate charging stations; and companies that provide a wide range of ancillary services to EV customers.
TGOOD Global Ltd., a Hong Kong-based global leader in prefabricated E-Houses and electrical substations, funded a separate charging subsidiary, which is believed to be the first substantial investment in the industry by a private company. TGOOD has more than 30 patents in EV charging station technology, and in 2015, the company successfully completed an electric taxi charging depot in Qingdao. Additional city-wide projects are slated for construction in Beijing, Tianjin, Hefei and Huizhou.
LeEco also has invested heavily in Beijing Dianzhuang Technology Co., a startup that builds and rents charging posts. Jia Yueting, LeEco’s founder and chief executive, said that building a charging infrastructure is the biggest obstacle for the new energy auto market in China, and that selling EVs before building charging posts “won’t work.”
SAIC Motor has invested ¥300 million ($45 million) to set up a charging subsidiary, whose services will include the construction of charging systems and terminal networks and other services for NEVs in Shanghai’s Huangpu District. SAIC Motor’s new subsidiary plans to build 50,000 public charging poles in China by 2020.
Chargelink, a Shenzhen-based startup focused on providing charging station solutions for EV manufacturers such as Tesla, BMW, Nissan and BYD, raised $20 million from a group of venture capital firms. It plans to expand its product line to include location-based services at charging stations.
Problems remain for individual consumers
Concerned with the availability of charging stations, many individual consumers are still reluctant to forsake their traditional internal combustion engine-powered cars in favor of those powered by batteries. Individual consumers need to “apply for” permission to construct charging poles from property management as well as the local state grid. Very often, they are refused immediately when they talk with the community’s property management. Property managers have a thousand reasons to not build charging poles, such as the potential danger of fires, or the fairness of EV car owners permanently using certain parking lots. The key issue is that property management companies have no motivation to do anything that will cause them unnecessary trouble. In addition, community property management companies are usually “tough” and not easy to persuade to do something from which they get no benefits.
The problem here is that it looks like the policymakers do not want to get too involved in this most difficult sector either, but pick the easy path by pushing charging stations in the city, or building many charging poles in certain pilot areas to provide fast charging services, so that these charging facilities can be “seen” easily by people, media and higher ranking officials. But is it convenient for an EV owner to drive 10-20 km to a charging station for fast charging? That question does not seem to be a prime concern at the moment.
Therefore mandatory regulations should be defined in this regard and community management companies should be given compensation or benefits to help build charging poles, as they will need to provide manpower and address potential issues in the future, in order to accelerate construction of electric vehicle charging facilities in residential areas for individual consumers.
Due to the cost of building a charging infrastructure is expensive, and investors are reluctant to commit capital until there is a market. What will come first: the EV or the charging stations? Some people in the west argue that the charging stations and EVs are like the chicken and the egg, and it is hard to say which should come first.
And by taking the future orientation approach for development of NEVs, China is solving this problem with both favourable government policies and strong capital support from the private sector. There are still obstacles to be overcome for individual consumers, however we’re convinced battery EVs will become the leading green powertrain in China and serve for the masses in the not so distance future.