China's Charging Pile Expedition Overseas: Opportunities and Challenges Coexist

Tech 2024-12-02 16:36:46 Source: Network

China's Charging Pile Expedition Overseas: Opportunities and Challenges CoexistIn the era of gasoline vehicles, oil was the lifeblood of automobiles; in the era of new energy vehicles (NEVs), electricity is replacing oil, and charging piles have become an indispensable key link in the automotive industry chain. From January to October 2024, China's total automobile exports reached 5

In the era of gasoline vehicles, oil was the lifeblood of automobiles; in the era of new energy vehicles (NEVs), electricity is replacing oil, and charging piles have become an indispensable key link in the automotive industry chain. From January to October 2024, China's total automobile exports reached 5.28 million units, a year-on-year increase of 25%, with NEV exports reaching 1.72 million units, a year-on-year increase of 15%, ranking first globally. Along with the globalization of China's NEV industry, Chinese charging piles are also stepping onto the world stage, injecting new vitality into the global NEV industry development.

A decade ago, we could see car brands from all over the world in China; today, this scene has reversed, with Chinese car brands spread across the globe. Cao Guangyu, Executive President of Shanghai Qingga Technology Development Co., Ltd., pointed out at the 2024 China Electric Vehicle Charging and Swapping Ecological Conference that the overseas expansion of automobile manufacturers has driven the export of auto parts, especially those with high transportation costs and high requirements for timely supply, such as charging piles, into the international market. Compared to the fiercely competitive domestic market, the overseas charging pile market still has enormous development potential, a veritable "blue ocean."

However, entering overseas markets is not easy. Non-uniform market standards, the difficulty of channel construction, cultural differences, insufficient infrastructure, and changes in overseas national policies all pose serious challenges to Chinese charging pile companies going global. Charging infrastructure construction is closely related to the development of NEVs; ensuring the convenience of charging for overseas users is crucial for the smooth overseas expansion of NEVs. Cao Guangyu emphasized that if the charging problems of overseas users cannot be solved, the overseas expansion strategy of automobile manufacturers will face huge obstacles.

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Currently, the number of charging piles in overseas markets is relatively small, prices are generally 2-3 times higher than in China, and industry maturity is far lower. This provides an unprecedented development opportunity for China's relatively early-stage charging and swapping industry. However, there are also entry barriers; various countries have strict certification standards for imported charging piles. Despite this, the lower level of market competition to some extent reduces the risk of involution.

Taking Europe and the United States as examples, the ratio of vehicles to public charging piles is over 15:1, far exceeding China's 7.5:1. At the same time, the development of the charging pile market in different European countries is extremely uneven, with charging pile construction density generally low, providing huge market potential for Chinese charging pile companies. With the booming development of the European NEV industry, the demand for charging piles will continue to grow, further expanding the market space.

In early 2023, the European Parliament passed the "Regulation on the sale of new internal combustion engine cars and light commercial vehicles zero emission protocol," which plans to ban the sale of new gasoline-powered cars and light commercial vehicles in the 27 EU countries from 2035. This ban will help the EU achieve its goal of zero greenhouse gas emissions by 2050. Zhang Lin, Chief Representative and General Manager of the German Automotive Industry Association (China), stated at the 2024 China Electric Vehicle Charging and Swapping Ecological Conference that to meet European emission regulations, the market share of electric vehicles needs to reach 30% by 2025, with a market inventory of 11.2 million vehicles. As of October 2024, the number of charging piles in Europe was approximately 780,000, with the Netherlands, France, and Germany accounting for 58% of the total. Zhang Lin emphasized that only by accelerating the construction of charging infrastructure can the acceptance of NEVs by European consumers be improved. He also pointed out that with Chinese NEV companies actively expanding into overseas markets, more and more Chinese charging pile production and operation companies are also going global and carrying out multi-level exchanges and cooperation with European companies. High energy costs, high labor costs, and a relatively conservative approach in Europe may make the development of the NEV and charging pile industry the next important opportunity for Sino-German cooperation.

Data from the China Electric Vehicle Charging Infrastructure Promotion Alliance shows that by the end of 2023, the number of public charging piles nationwide reached 2.726 million, a year-on-year increase of 51.7%. TGOOD and Xingxing Charging ranked first and second with 523,000 and 451,000 operating units, respectively. A TGOOD director informed investors that the global green transformation of the automotive industry has brought huge development opportunities for Chinese companies; TGOOD's charging network solutions have covered the Middle East, Southeast Asia, Russia, and Europe, and they plan to increase their efforts in overseas business expansion. A Xingxing Charging executive also stated that although the domestic market currently contributes 80% of revenue, it is expected that the overseas market will contribute at least half of the gross profit this year.

Market research firm TrendForce predicts that the global growth rate of public charging pile construction will fall to 30% in 2024, significantly lower than the 60% in 2023. China still has the largest number of public charging piles globally, and is expected to reach 3.6 million by the end of 2024, accounting for nearly 70% of the global total. China holds a dominant position in the global NEV market and has also formed a significant advantage in the upstream and downstream of the industry chain. Taking charging modules as an example, China has formed a relatively concentrated industrial structure. Charging modules play a crucial role in the performance of charging piles, with high reliability and supply chain barriers; manufacturers need more than 5 years of experience to achieve low failure rates. Liu Hui, General Manager of Shenzhen Jiawa Digital Energy Co., Ltd., pointed out that charging modules account for 50% of the cost of a charging pile, and their stability directly determines the stability of the charging pile. With the rapid development of the charging pile and NEV industries, the charging module market is also experiencing explosive growth.

However, operating charging piles in overseas markets is not easy; overseas markets have significant differences from China in terms of payment, logistics, and work efficiency. Wang Lei, Chairman of Tianjin Dazhen Electric Appliance Group Co., Ltd., stated that the European payment system is not as well-developed as China's, often requiring the use of POS machines or cash payments; parts transportation times are also much longer than in China, and work methods and efficiency also differ, resulting in lower evaluations of facilities that are mature in China.

Yang Qi, General Manager of Nanjing Qingchen Green Energy Technology Co., Ltd., expressed similar views. He pointed out that there are few mature charging platforms overseas; online payment is not well-developed in many countries, and users have not yet developed the habit of using apps for charging; card payment remains the mainstream method. Many local operators rely on local contractors, lack operational knowledge, and overly rely on suppliers to solve problems. The capabilities of overseas third-party platforms are uneven, and the gap compared to mature charging operation platforms in China is significant. Currently, most overseas charging platforms can only achieve basic charging, settlement, and order recording functions, with insufficient technical investment. Overseas users place great importance on after-sales service and hope to improve the user experience of NEVs, which is a key issue that Chinese companies must address.

In addition to the above challenges, Chinese companies also need to address issues such as different certification standards, trade barriers, and higher environmental requirements. Overseas market and domestic charging pile certification standards differ; obtaining overseas market certification is a necessary step for Chinese NEVs to go global. For example, Chinese charging pile products use CQC certification; exporting to Europe requires CE certification, while entering the US market requires UL certification. These certification processes are complex, time-consuming, and costly, undoubtedly increasing the operating costs of companies. In addition, although overseas markets provide subsidies for charging pile construction, the thresholds for obtaining subsidies are also high. The United States and Europe are attempting to restrict the entry of Chinese charging pile companies through measures such as mandatory local production and increased taxes.

Despite the numerous challenges, industry insiders generally believe that opportunities outweigh challenges. The rapid development of the domestic NEV industry has driven the export of upstream and downstream industries. The overseas NEV industry chain is not yet fully mature, and there is a large gap in the charging pile market; domestic charging piles have advantages in price and product competitiveness and still have broad development prospects.

In summary, Chinese charging pile companies' foray into overseas markets faces both huge opportunities and severe challenges. Only by actively addressing challenges and continuously improving product quality and service levels can they secure a favorable position in the global NEV industry development and contribute to the global green energy cause.

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