Summary of the latest investment and industry model exploration in China's charging pile industry in 2019

With a series of favorable policies such as separate lottery quotas, purchase tax reduction and exemption, and new energy vehicles being exempted from license plate restrictions and traffic restrictions, as well as the gradual enhancement of consumers' environmental awareness, new energy vehicles in my country are now developing rapidly.

According to statistics from the China Association of Automobile Manufacturers, in 2018, domestic production and sales of new energy vehicles reached 1.27 million and 1.256 million respectively, still maintaining a substantial increase, and breaking the million mark for the first time. We found that although the overall performance of the automobile industry in 2018 was not ideal, the new energy vehicle market did not fall into the trough as we expected, but was on the rise and significantly higher than the number in previous years. Especially under the strong guidance of the 2018 version of the new subsidy policy, the industry is ushering in higher-quality development.

In 2018, we found that the new energy vehicle industry has undergone large-scale rectification and integration, and the industry policy has also changed greatly in 2018: In July 2018, the State Council issued the "Three-Year Action Plan to Win the Blue Sky Defense War", proposing that the production and sales of new energy vehicles will reach about 2 million units in 2020, and the use ratio in key areas will reach 80%; by the end of 2020, all buses in the built-up areas of municipalities, provincial capitals, and cities with independent planning in key areas will be replaced with new energy vehicles. Centralized charging piles and fast charging piles will be built in logistics distribution centers such as logistics parks, industrial parks, large commercial shopping centers, and agricultural trade wholesale markets.

However, with the development of new energy vehicles, the charging problem caused by the insufficient number of charging piles has become increasingly prominent. On January 14, the official data released by the China Charging Alliance showed that as of the end of 2018, the member units of the alliance reported a total of 300,000 public charging piles. The vehicle-pile information data sampled by the member vehicle companies of the alliance showed that 477,000 private charging piles were built and installed, and the total number of public and private piles was about 777,000, with a year-on-year growth rate of 74.2%. According to statistics, we also learned that the current charging power in my country is mainly concentrated in Guangdong, Shaanxi, Jiangsu, Sichuan, Hubei, Shandong, Zhejiang, Fujian, Hunan, Henan, Shanxi and other provinces, and the power flow is mainly buses, and passenger cars also account for a high proportion. However, we found that these cities are not very high in the ranking of the total amount of charging pile infrastructure in various provinces and cities. See the figure below for details:

(See Figure 1 for details)

At present, there are a large number of companies in the market that are blindly investing in the charging pile industry. The mixed market has led to the fact that electric car owners are complaining about the difficulty of charging, and most charging piles are idle. This is not only a waste of social resources, but also severely restricts the development of the new energy industry. This has a lot to do with the current unclear profit model of charging piles. We now simply summarize the development model of existing charging pile operating companies:

1. Capital Financing Market

In the early stage of the charging pile market, many powerful companies expanded rapidly in the early stage in order to enter the charging pile market and gain most of the market. This operation mode can also be called the "casting net mode".

Occupy as many charging positions as possible in existing areas, build a large number of charging piles, and occupy the market scope.

However, although this operating model has effectively occupied the market, it also has many problems:

1. The site that is sought in order to quickly occupy the market cannot be effectively utilized because it is not well adjusted.

2. The number of vehicles on the market is likely to be smaller than the predicted total volume, resulting in a shortage of corporate capital and an inability to continue expanding.

2. Market profit gap for production enterprises

The manufacturing companies mainly carry out production and do not directly participate in market operation and development.

Companies that charge personal vehicles or operate charging stations.

This operating model can effectively avoid capital shortages in enterprises and does not require consideration of operational issues such as site backup power.

However, the promotion scope of this operating model is relatively narrow, the customer base is not large, and some charging pile companies have their own production companies.

Therefore, many manufacturing companies are faced with the situation of having no customer base or insufficient capital chain.

3. New Model of Triple Network Integration

The integration of three networks is an operating model that has emerged in the past two years. The three networks mainly refer to the new energy Internet composed of the charging network, the Internet of Vehicles, and the Internet.

The purpose of information transmission, business operation and management monitoring is achieved through the integration of three networks. And through the big data platform built by the integration of three networks, service innovation and business model transformation are carried out to build the largest car charging network in the country.

Conduct business transactions and build business through large systems.

The most powerful company operating the three-network integration model is Qingdao Teladian Company.

This industry model can be said to have changed the traditional business model, transforming and expanding the model within the industry. However, the capital required is also very strong, and it is also very difficult for small businesses to grow.

4. Shared Operation Light Asset Model

The charging pile sharing operation model emerged in the middle stage of the sharing industry. Unlike the traditional sharing industry, ordinary investors can also participate in the sharing operation of charging piles. Users can invest in charging piles as investors, but they do not need to manage them later.

The operator of the charging pile is responsible for production, site management, construction, operation, and post-maintenance. However, due to the characteristics of its sharing model, the problem of insufficient capital chain is avoided.

Users enjoy the property rights of the piles and share in the service fees, and are spared a series of management troubles. The two parties have a cooperative relationship.

The characteristic of the sharing model is that it is asset-light. As a charging pile operator, this operation model solves the problem of difficulty in making profits through the layout of the industrial chain ecosystem. Unlike other models, there is a shortage of huge investment funds.

This operating model is a new type of operating model in the industry. There are not many companies using this operating model now. Among them, Tianjin's Dazhen Charging can be said to be the most representative company in the industry.

At present, the operating modes of my country's charging pile industry are basically the above four, each with its own advantages and disadvantages. We will find that more and more innovative companies are entering this market, and the models they use are becoming more and more innovative, which also proves that the traditional operating model will eventually be broken by the new model.

Today's innovative enterprises will have more and more potential!