"New Infrastructure" heat-enhancing charging pile market, leading companies welcome benefits

Polaris transmission and distribution network news: Under the dual pressure of the impact of the new crown pneumonia epidemic and economic downturn, "new infrastructure" is becoming a booster for the country to revitalize the economy.

On March 4, the Standing Committee of the Political Bureau of the CPC Central Committee held a meeting to study the current key tasks of preventing and controlling the new crown pneumonia epidemic and stabilizing economic and social operations, and to accelerate the construction of new infrastructure such as 5G networks and data centers. New energyCharging pileInclusion in "new infrastructure" has become the focus of national infrastructure construction.

The day after the news was released, Telaidian New Energy Co., Ltd. (hereinafter referred to as "Telidian"), the largest charging pile operator in China, announced that it had received approximately RMB 1.35 billion in Series A investment, and all funds have arrived. On March 16, the Party Group of State Grid Co., Ltd. (hereinafter referred to as "State Grid") held a meeting to establish a "New Infrastructure" leading group, emphasizing the acceleration of the construction of charging piles and focusing on promoting the charging "partners" plan. At the same time, the Ministry of Industry and Information Technology is studying to promote the electrification of vehicles in the public sector, which is expected to expand the charging operation market again.

"The country tends to support and improve charging facilities, and under the 'new infrastructure' trend, more second- and third-tier cities will benefit. Leading companies in the charging pile field, as well as companies focusing on charging cabinets and communication modules in the industrial chain, will also become direct beneficiaries." Yu Qingjiao, Secretary-General of the Zhongguancun New Battery Technology Innovation Alliance and Chairman of the Battery Hundred People Association, said in an interview with a reporter from China Industrial News.

Charging pile construction speeds up

In June 2019, subsidies for new energy vehicles were lowered, and the sales of new energy vehicles also began to show negative growth, and the speed of new charging pile construction declined accordingly. Under the new round of "new infrastructure" trends, the construction of 4.2 million charging pile gaps is expected to accelerate.

According to China's electric vehiclesCharging infrastructureZhang Fan, director of the Promotion Alliance, introduced that in 2019, my country's total new energy vehicle sales were more than 1.2 million, and the national new energy vehicle ownership was close to 4 million. In the past five years, charging infrastructure has formed a trend of rapid development on a large scale, but the charging infrastructure industry has not yet clearly classified the national economic industry. In particular, there is a lack of corresponding supporting policy basis for charging infrastructure construction land, taxation, etc.

"Accelerating the development of 'new energy vehicle charging pile new infrastructure' will help further clarify the industrial status of charging infrastructure, and clarify the main tone for strengthening support for the charging infrastructure industry and consolidating the energy supply guarantee of my country's new energy vehicle." Zhang Fan emphasized.

Charging piles, special power equipment for charging electric vehicles, and the accompanying industry for new energy vehicles, are composed of pile bodies, electrical modules, metering modules and other parts. They generally have functions such as electricity metering, billing, communication, and control. In May 2014, State Grid opened the charging and swapping operation facility market, and in 2015, the central and local governments subsidized the construction of charging piles, and private capital was competing. In 2017, due to factors such as the low utilization rate of charging piles, the capital enthusiasm declined, and the progress of charging pile construction slowed down.

Data from Guosheng Securities Research Institute shows that the remaining operators in the last round of reshuffle began to accelerate the construction of charging piles in 2019, and the number of new charging piles increased from 7,100 per month in 2018 to 18,000 per month in 2019. Although the industry has developed rapidly in 2019, the contradiction between high vehicle piles is still prominent.

Under this circumstance, the country has included new energy vehicle charging piles in the "new infrastructure", which shows that charging piles will become the next focus of layout, and on the other hand, it also reflects from the side that there is a huge gap in my country's new energy charging piles.

Data from the China Charging Alliance shows that as of the end of January 2020, 531,000 public charging piles and 712,000 private charging piles have been built nationwide, with a vehicle-pile ratio of about 3.5:1, far lower than the 1:1 planned by the "Guidelines for the Development of Electric Vehicle Charging Infrastructure (2015-2020)".

It is understood that the charging pile equipment market mainly includes charging piles and modules, which are essentially traditional power equipment. The industry is fiercely competitive, the pattern is relatively scattered, and it shows periodic characteristics. Fierce competition has led to a significant decline in the industry's gross profit margin in recent years, and companies with module production and R&D capabilities have higher gross profit margins.

"Under the background of the accelerated advancement of new infrastructure, we expect the construction of charging pile infrastructure to be greatly accelerated, the overall charging equipment market will show upward cyclical characteristics, and the increase in revenue and gross profit margins of related companies are expected to expand." Guosheng Securities Research Report predicted.

It is worth mentioning that the construction of charging piles is very different from the construction of traditional infrastructure, and a new business model has been formed. In addition to using new energy, charging piles are also supported by new digital technologies. Different from the traditional infrastructure, the construction of charging piles in the "new infrastructure" pays more attention to the communication technology, digital technology, and intelligent networking technology of charging facilities, so that the network of piles and vehicles can be accelerated.

"Putting charging piles to the same strategic position as 5G has become the country's 'new infrastructure' under the new situation, which has a great impact on the industry. With the improvement of its status, countries and localities will give policies and capital tilts to charging infrastructure in the future, which will help stimulate the industry to accelerate its development." Yu Dexiang, chairman of Telaidian, analyzed.

The prospects of the charging pile market are unquestionable. Some institutions predict that the domestic charging pile equipment market space will be 116.5 billion yuan in 2020, and will reach 237.8 billion yuan in 2025.

"With the construction of charging facilities, the ratio of the ownership of new energy vehicles and charging piles in my country will gradually become reasonable. Although the layout of charging infrastructure is becoming more and more perfect, there are still shortcomings compared with the ownership of new energy vehicles. I believe that the growth will accelerate in the future." China Business Industry Research Institute analyzed.

Leading companies welcome benefits

Under the vent of "new infrastructure", enterprises may return or compete for flow. Benefiting from the start of this round of new infrastructure, the construction speed of charging piles is expected to accelerate, and leading charging pile companies with excellent technology and deep market may usher in new market opportunities.

On March 16, at the State Grid Party Group meeting, Chairman and Party Secretary Mao Weiming emphasized that it is necessary to accelerate the research and promotion of the construction of new energy vehicle charging piles. Just a few days ago, State Grid suddenly released the "Find Partners" activity, seeking cooperation with individual charging piles, pile group users, production companies, venues and funders to jointly build shared charging piles. In addition to the new round of ultra-high voltage construction, State Grid has obviously aimed at charging piles in the second focus direction.

In fact, State Grid has previously launched a round of large-scale charging pile construction. As early as 2006, the State Grid public fast charging network began to be built. However, after more than ten years of development, State Grid has not been very smooth in the construction and operation of charging piles. As of the end of 2019, the number of charging piles operated by State Grid was only 88,000, far lower than the 152,000 operated by Telai Dian and the 130,000 operated by Xingxing Charging.

On November 25, 2019, State Grid Guanghui Electric Vehicle Service Co., Ltd., a joint venture established by State Grid subsidiary State Grid Electric Vehicle and Guanghui Automobile, was officially unveiled in Shanghai. According to the plan, State Grid Guanghui will complete the layout of 430,000 charging piles in 2020, and will cooperate with real estate developers such as Evergrande and Vanke to promote the construction of community new energy vehicle charging piles.

Players who are restricted from the high investment in the early stage of charging pile construction and enter the track earlier may change their strategies like State Grid and return to the arena; or like Teruid and Xingxing Charging, they will take every step and occupy a full position.

Data shows that as of December 2019, there were 8 charging piles operated by charging operators across the country with more than 10,000 units, with a total market share of 90.2%; the top three TeLidian, Xingxing Charging and State Grid reached 69.1%.

"Under the 'new infrastructure' trend, I am very optimistic about the development of Telai Dian. This company has invested more than 5 billion yuan in the charging network in the past five years, and finally crossed the break-even line in 2018. It will also reform the stock market in the future and may be split and listed." Yu Qingjiao said.

Xingxing Charging, which is a light asset model, belongs to Wanbang New Energy. The difference between it and TelaiDian is reflected in that the land belongs to the owner, Wanbang is responsible for the construction and operation, enjoys the property rights of the pile, and repays the owner through sharing. At the same time, the owner can also attract consumers by building charging piles.

With the tilting subsidy policy, the phenomenon that my country's charging pile construction speed lags behind the growth of automobile ownership is gradually improving, and private enterprises are more likely to make profits from massive engineering and equipment orders in the medium and short term. Data shows that the market structure in the charging pile track is currently mainly private, among which private charging stations such as Telaidian, Xingxing Charging, and Yiwei Energy account for as much as 75%; state-owned charging station companies are represented by State Grid and China Putian, accounting for about 20%.

In 2017, there were about 300 charging pile companies in China. In just two years, 50% of companies went bankrupt or withdraw from this industry, and only 30% were struggling on the break-even benchmark. The charging pile industry has entered a "reshuffle period", and the advantages of leading companies are highlighted.

"Under the 'new infrastructure' trend, industrial value is shifting to the operation link, and the scale effect advantages of leading enterprises are gradually highlighting. The industrial value chain is also gradually shifting from upstream equipment to midstream operation field, and industry leaders in the operation field are the most investment value." Sun Huifeng, president of CIDI Consulting Co., Ltd., analyzed.

In an interview with the media, Yu Dexiang also admitted that the window period for charging piles is approaching and the window of opportunity is about to be closed. "As time goes by, there will be three to five industry operators in the end."

The huge gap in the construction of charging piles is still attracting influx of forces from all sides. According to the plan, Tesla will continue to add more than 4,000 super charging piles in China in 2020, which is nearly twice the total construction volume in the past five years. It can be foreseen that Tesla's accelerated layout will further stimulate third-party operators to continue to accelerate the layout of charging facilities.

Just two days after the new policy was introduced, CATL, the leader of power battery, has also entered the market with great enthusiasm. On March 6, a new energy enterprise registered in Yangpu District, Shanghai was quietly established. It is reported that this joint venture established by CATL and the new energy terminal operator Baicheng New Energy will involve the construction and operation of new energy technology, battery technology, and new energy vehicle charging and swapping facilities.

Driven by policy dividends, the market economy that was pressed for pause was reactivated. The new energy vehicle charging pile industry, which is in an upward period, is expected to expand its investment volume through policy stimulation and usher in a new round of explosion.