(Report producer/author: Dongguan Securities, Huang Xiuyu)
1. The rapid growth of domestic new energy vehicles drives the accelerated development of supporting facilities
1.1. The number of domestic new energy vehicles continues to rise
Domestic new energy vehicle sales maintained a rapid growth trend. In 2022, domestic new energy vehicle sales continued to rise, and monthly sales reached new highs. In December 2022, NEV sales exceeded 800,000 units, and in November and December 2022, the penetration rate of NEVs exceeded 30% for two consecutive months. In 2022, domestic new energy vehicle sales reached 6.887 million units, a year-on-year increase of 93.4%, and the penetration rate of new energy vehicles reached 25.6%, an increase of 12.2pct over 2021. The number of new energy vehicles in China will increase accordingly, with 13.1 million new energy vehicles in China in 2022, accounting for 4.1% of the total vehicle ownership, an increase of 1.5pct over 2021.
Looking forward to 2023, the domestic economic recovery after the epidemic is expected to be strong, and the recovery of purchasing power and the increase in travel are conducive to the growth of demand for new energy vehicles. At the national level, the promotion and application of new energy vehicles will continue to be strengthened, and the purchase tax exemption for new energy vehicles will continue to be implemented until the end of 2023. Coupled with the beginning of 2023, new energy vehicle companies have cut prices and are expected to stimulate sales growth. Domestic sales of new energy vehicles are still expected to achieve rapid growth in 2023, and annual sales are expected to reach 9 million units, an increase of about 31% compared with 2022. Sales are expected to reach around 12.5 million units in 2025. Domestic new energy vehicle ownership will continue to rise. Assuming that the scrapping rate of new energy vehicles in mainland China is 8% from 2023 to 2025, combined with our forecast of new energy vehicle sales in 2023-2025, it is expected that the domestic new energy vehicle ownership will reach 21 million units in 2023 and increase to 40 million units by 2025.
1.2. Policies support the acceleration of charging infrastructure construction
An electric vehicle charging system is an energy supply facility that sustains the operation of an electric vehicle. With the rapid development of the domestic electric vehicle market in recent years, the number of holdings has grown rapidly, and the charging demand for electric vehicles has been increasing, thereby promoting the development of the new energy vehicle charging and swapping industry. In 2022, the charging capacity of the national public charging infrastructure will be 21.323 billion kWh, a year-on-year increase of 92.24%.
Improving the construction of charging infrastructure is the basic guarantee to support the expansion of the scale of new energy vehicles. With the rapid growth of new energy vehicle ownership, it is urgent to accelerate the construction of supporting infrastructure such as electric vehicle charging piles. In 2020, charging piles were written into the government work report for the first time and included in the "new infrastructure", and in recent years, charging pile industry policies have been continuously introduced, requiring vigorous promotion of the construction of charging and swapping networks. In February 2023, the Ministry of Industry and Information Technology and other eight departments issued a notice on organizing and carrying out the pilot work of the pilot zone for the comprehensive electrification of vehicles in the public sector, the main objectives of which include proposing a strong guarantee of the charging and swapping service system and building a moderately advanced, balanced layout, intelligent and efficient charging and swapping infrastructure system; As well as the innovative application of new technologies and new models, the application of new technologies such as intelligent and orderly charging, high-power charging, and fast power exchange has been effectively expanded.
In 2022, the construction of domestic charging piles will accelerate. According to data released by the China Charging Alliance (EVCIPA), 37,000 new public charging stations were added nationwide in 2022, and the number of public charging stations by the end of 2022 was 111,000, a year-on-year increase of 50%. In 2022, 2.593 million new charging piles were added nationwide, and the number of units retained by the end of 2022 was 5.21 million units, a year-on-year increase of 99.07%. Among them, the number of public charging piles was 1,797,500 units, a year-on-year increase of 56.7%; The number of private charging piles was 3,412,100 units, a year-on-year increase of 132.1%, and the growth of private charging piles was faster.
With the rapid development of mainland charging infrastructure in recent years, the world's largest electric vehicle charging infrastructure network has been built. According to IEA data, from 2016 to 2020, the construction scale of global electric vehicle public charging piles continued to rise, from 331,800 units in 2016 to 1,307,900 units in 2020, with a compound annual growth rate of 41%. From 2016 to 2020, the proportion of public charging piles in the global construction scale in mainland China also continued to rise, from 43% in 2016 to 62% in 2020.
1.3. The domestic charging pile market size will exceed 100 billion yuan
In recent years, the domestic vehicle pile ratio has shown a downward trend as a whole. The domestic pile ratio declined from 3.4 in 2018 to 2.5 in 2022. Driven by the active promotion of national policies and market demand, assuming that the vehicle pile ratio continues to show a downward trend year by year, by 2025, the number of charging piles will reach 20 million, which is about 15 million units from the current level.
Through estimates, we estimate that the number of new charging piles in China is expected to be 4.36 million, 4.8 million and 5.72 million respectively from 2023 to 2025, and the compound annual growth rate of the number of new charging piles will reach 30% from 2023 to 2025. Similarly, in recent years, the market size of the mainland new energy vehicle charging pile industry has maintained a growth trend. According to EVCIPA data, the market size of mainland charging piles increased from 12.43 billion yuan in 2018 to 41.87 billion yuan in 2021, with a 3-year compound growth rate of 50%. According to our estimates, the market size of charging piles is expected to reach about 90 billion yuan in 2022 and 200 billion yuan in 2025, with a three-year compound growth rate of 31%.
2. Overseas markets have broad prospects, and domestic enterprises are accelerating their overseas expansion
2.1. The new energy vehicle market in Europe and the United States has expanded rapidly
In terms of the European new energy vehicle market, in 2022, European new energy vehicle sales will reach 2.602 million units, a year-on-year increase of 15%, and the penetration rate of new energy vehicles will reach 23.7%, an increase of 4.5pct over 2021. As a pioneer in carbon neutrality, Europe has introduced the world's strictest carbon emission standards, with strict requirements for automobile emission standards, the EU requirements, stipulating that the carbon emissions of fuel cars shall not exceed 95g/km, and require that by 2030, the carbon emission standards of fuel cars be reduced by 55% to 42.75g/km. By 2035, new car sales will be 100% electric.
In the U.S. new energy vehicle market, with the implementation of new energy policies, U.S. vehicles are accelerating electrification. In 2022, the sales of new energy vehicles in the United States will be 992,000 units, a year-on-year increase of 52%, and the penetration rate of new energy vehicles will be 6.9%, an increase of 2.7pct over 2021. The Biden administration in the United States has proposed to sell 4 million new energy vehicles by 2026, with a penetration rate of 25%, and a penetration rate of 50% by 2030. The Biden administration's Inflation Reduction Act (IRA Act), which took effect in 2023, proposed measures such as a tax credit of up to $7,500 for consumers buying electric vehicles and the removal of the cap on the size of subsidies of 200,000 vehicles for car companies. The implementation of the IRA law is expected to stimulate the acceleration of sales growth in the US new energy vehicle market.
In 2022, global sales of new energy vehicles reached 10.824 million units, a year-on-year increase of 62%, and the penetration rate of new energy vehicles reached 13.4%, an increase of 5.6pct over 2021. In 2022, the global penetration rate of new energy vehicles will exceed 10%, and the global automotive industry is expected to accelerate its transformation from traditional fuel vehicles to new energy vehicles. By the end of 2022, the global new energy vehicle ownership exceeded 25 million, accounting for 1.7% of the car ownership, and the global ratio of new energy vehicles to public charging piles was 9:1.
2.2. The demand for overseas charging piles has increased significantly
With the rapid growth of new energy vehicle sales in Europe and the United States, the demand for charging pile supporting construction is strong. Under the impetus of policies, countries are expected to accelerate development, and the demand for overseas charging piles has increased significantly. In the European and American markets, the ratio of new energy vehicles and public charging piles is high. According to IEA statistics, in 2021, the number of new energy vehicles in Europe will be 5.5 million, the number of public charging piles will be 356,000, and the ratio of public vehicle piles will reach 15:1. In 2021, the number of new energy vehicles in the United States was 2 million, the number of public charging piles was 114,000, and the ratio of public vehicle piles reached 18:1. At present, the supporting infrastructure construction of the new energy vehicle market in Europe and the United States is obviously insufficient, and there is much room for improvement in the charging pile market.
According to IEA forecasts, the number of new energy vehicles in the EU is expected to reach 21.9 million units by 2025, with a compound growth rate of 41% from 2021 to 2025, and is expected to reach 58 million units by 2030, with a compound growth rate of 22% from 2025 to 2030. According to IEA forecasts, the number of new energy vehicles in the United States is expected to reach 11 million units by 2025, with a compound growth rate of 53% from 2021 to 2025, and is expected to reach 38.3 million units by 2030, with a compound growth rate of 28% from 2025 to 2030. With the continuous growth of new energy vehicle sales, the demand for charging piles in the European and American markets has risen rapidly. However, at present, the ratio of vehicle piles in the European and American markets is far behind the domestic level, and under the active promotion of its government subsidy policy, the construction of charging infrastructure in the European and American markets will usher in a significant increase.
In Europe, the European Commission released in July 2021 a package called "Fit for 55", which requires member states to accelerate the construction of new energy vehicle infrastructure, ensure that there is one electric car charging station every 60 kilometers on major roads, and set a goal of building 1 million public charging piles by 2025. In the United States, in February 2023, the Biden administration issued the final rules of the national electric vehicle charging infrastructure network, planning to invest $7.5 billion to build 500,000 public charging piles in the United States by 2030. But require federally funded electric car chargers to be manufactured in the United States; It also requires that from July 2024, 55% of the charger cost needs to come from US parts, and Tesla will open its charging service to other car models.
2.3. Domestic enterprises accelerate the layout of overseas markets
The charging pile market in Europe and the United States is currently in the early stage of the outbreak as a whole, but the number of local pile companies is relatively limited, and the overall supply is in short supply. With the rapid growth of charging pile demand in overseas markets, domestic charging pile companies are accelerating the layout of overseas markets. Compared with local charging pile companies in Europe and the United States, domestic charging pile companies have more cost-effective advantages. Due to the high performance requirements of charging pile products in the European and American markets, the gross profit margin level of overseas business of domestic pile enterprises is often higher than that of domestic enterprises. At present, the gross profit margin level of domestic business of charging pile enterprises is about 20%-30%, and the gross profit margin level of foreign business is about 30%-40%. Taking Youyou Green Energy, which is mainly engaged in the charging module business, as an example, the gross profit margin of its foreign business is significantly higher than that of its domestic business.
Since the standards of overseas charging pile products are different from those in China, passing the standard certification of overseas countries is the primary threshold for domestic enterprises to enter their markets, and it is necessary to expand corresponding overseas sales channels. At present, a number of domestic charging pile companies have obtained European standard and American standard certification, and some of their products have been delivered to overseas markets. At present, the domestic charging pile exports are mainly from Europe and Southeast Asia. Considering the impact of US policy restrictions, domestic enterprises face certain resistance to going overseas in the US market. In general, in the European and American markets, product certification is early, sales channels are widely distributed, and domestic pile enterprises with core technical advantages in the field of charging piles will take the lead in benefiting from the rapid development of the overseas charging pile industry.
3. Core equipment and operation are the focus of the charging pile industry chain
3.1. Analysis of charging pile industry chain
The upstream of the new energy vehicle charging pile industry chain is the manufacturer of components and equipment required for the construction and operation of charging piles; Midstream is the charging operator; Downstream is a solution provider for various electric vehicle users and charging service operators. Among them, equipment manufacturers and charging pile operators are the most important links in the charging pile industry chain.
3.2. The upstream competition pattern is relatively scattered as a whole, and the core components are relatively concentrated
The upstream of the charging pile industry chain is a variety of components and charging equipment manufacturers, providing a variety of charging pile components and charging equipment, including charging modules (IGBT, inverters, transformers, rectifiers, etc.), distribution filter equipment, monitoring and billing equipment, battery maintenance equipment (circuit breakers, fuses, etc.), and other components and equipment including contactors, connectors, electricity meters, displays, shells, plug sockets, cables, charging guns, etc.
The cost of charging equipment, that is, the hardware equipment of charging piles, is the main cost of charging piles, accounting for more than 90%. Among them, the charging module is the core equipment and main cost source of the charging pile, accounting for about 50% of the hardware cost of the charging pile. The main function of the charging module is to convert the alternating current in the AC grid into direct current that can charge the battery, which is related to the overall performance of the charging pile and charging safety. Among them, IGBT power devices are the key components of the charging module, and are the core devices that play a role in power conversion and transmission in the charging process, accounting for more than 20% of the cost of the charging module. Due to the high technical content of IGBT and the difficulty of processing, domestic pile enterprises are currently dependent on the import of IGBT.
Due to the relatively low technical threshold of the charging pile equipment industry and the high degree of product standardization, the number of related companies in the field of domestic charging pile equipment production exceeds 300, and the number of suppliers is large. Overall, the competitive landscape of charging modules for core devices with high technical barriers is more concentrated, with CR5 reaching 72%. However, the competition pattern of upstream general parts and equipment manufacturing is relatively scattered.
3.3. Midstream operations are in a monopolistic competition pattern
The midstream of the charging pile industry chain is a charging operator, responsible for operating large-scale charging stations or providing charging pile charging services, etc., the investment cost of midstream charging operation is large, requires strong financial strength, belongs to the heavy capital link, and is a link that is more difficult for potential entrants in the industry to enter. According to the business model, charging pile operators are mainly divided into three types: operator-led mode, car enterprise-led model, and third-party charging service platform-led mode. The operator-led model has high efficiency in operation and management, which is the main operation mode of the market at this stage, and representative enterprises include special call, star charging, State Grid, China Southern Power Grid, etc. At present, the concentration of public charging pile operators is high. By the end of 2022, the number of CR10 public charging piles operated by charging operators nationwide reached 86.3%. Among them, CR4 reached 64.6%, followed by 363,000 special calls, accounting for 20.2%; Star Charging operated 342,000 units, accounting for 19%; Cloud fast charging operated 259,000 units, accounting for 14.4%; State Grid operated 196,000 units, accounting for 10.9%.
4. High-voltage fast charging has become the general trend
4.1. Fast charging technology will enable the rapid development of new energy vehicles
According to the classification of different charging technologies, the current charging pile is mainly divided into two categories: DC charging and AC charging. AC charging is also known as "slow charging", AC charging pile technology is mature, the structure is relatively simple, easy to install and low cost, the use of conventional voltage, charging power is small, charging slow, most of them are installed in residential community parking lots. DC charging, also known as "fast charging", first converts alternating current into direct current, and then directly charges the battery through the charging socket. The technology and equipment of DC charging pile is more complex than AC charging pile, manufacturing cost and installation cost are higher, the use of high voltage, charging power, fast charging, is currently more suitable for scenarios with high charging time requirements, such as taxis, buses, etc., generally installed in centralized charging stations.
Mainland public charging piles include two categories: DC charging piles and AC charging piles. At present, AC charging piles are still the mainstream, and the ratio of AC charging piles and DC charging piles is about 6:4. At the same time, the proportion of public DC charging piles has increased year by year in the past three years, accounting for 38.3%, 41% and 42.3% respectively from 2020 to 2022. From the perspective of the market structure of European charging piles, the existing public charging piles are mainly slow charging piles, but in recent years, the proportion of fast charging piles has increased year by year. From the perspective of the market structure of charging piles in the United States, the existing public charging piles are also mainly based on slow charging piles, and the proportion of slow charging piles is slightly lower than that of the European market. Since 2019, the proportion of its fast charging piles has increased significantly, and it has shown an increasing trend for three consecutive years.
Charging convenience and shortening charging time are one of the pain points to solve the development of new energy vehicles. At present, there are many models on the market with a cruising range of more than 500km, and with the increasing cruising range of vehicles, users urgently need more powerful charging technology and faster charging speed, hoping to charge within 20min. The accelerated application of fast charging technology is crucial to promote the rapid development of new energy vehicles. At present, national policies actively promote the development of fast charging technology from the top design, and the proportion of fast charging piles is expected to gradually increase in the future.
4.2. High-voltage fast charging is currently the mainstream choice
Battery charging power = charging power × charging time, that is, the greater the charging power, the shorter the charging time. Charging power = system voltage × charging current. Therefore, there are two technical routes for realizing fast charging: one is high-current fast charging technology, and the other is high-voltage fast charging technology. High-current fast charging technology, it is necessary to upgrade the material system and structure of the battery cell to improve the maximum charging current of the single cell, and charge each part of the battery at the same time, which has high requirements for thermal management and greater technical difficulty, so it is difficult to promote. This technology application is represented by Tesla Model 3, with a maximum charging current of 700A and 80% charge in 30 minutes. High-voltage fast charging technology is the mainstream choice for car companies to achieve fast charging, and the difficulty of this technology is relatively small and the cost is relatively controllable. In order to achieve super fast charging and alleviate charging anxiety, mainstream new energy vehicle companies have launched 800V high-voltage platform models, which will be launched in 2023. Subsequent high-voltage fast-charging models will be accelerated on the market, and it is expected that by 2025, domestic sales of high-voltage fast-charging models are expected to exceed 5 million units, and the penetration rate in new energy vehicles will reach 40%.
Most of the current market stock charging piles can only support 400V voltage, fast charging demand promotes the technological change of charging piles, and most of the new fast charging piles in the future will have 3C and above high-power charging capabilities. The core components of the charging pile need to be upgraded and adapted, the demand for high-power charging modules is increased, and the performance requirements for the voltage resistance, conversion efficiency, conduction loss and other performance of the power devices used in the charging pile are also higher, and the support of fast charging liquid cooling and heat dissipation system is required. Equipment manufacturers with the relevant know-how will be the first to benefit.
5. Giants gather to compete for the power replacement track
5.1. Improve the efficiency of energy replenishment, and the power exchange mode is expected to be rapidly promoted
The substation is another energy replenishment mode in addition to the charging pile. Compared with the charging pile mode, the key advantage of the battery swap mode is the high replenishment efficiency, and the power exchange time does not exceed 5 minutes. At the same time, the vehicle-electric separation mode can reduce the threshold for car purchase, especially for the electrification of taxis and commercial vehicles with operating cost control pressure. Power exchange modes include: chassis power change, side power change, and power change in separate boxes. At present, chassis power exchange is the mainstream mode of the market, accounting for about 80% of the market share, mainly used for passenger cars; Sideways battery swapping accounts for about 8% of the market share, mainly used for commercial vehicles (heavy trucks, mining trucks, etc.); At present, the application of sub-box power exchange is less, mainly used in passenger cars, and its biggest advantage is that it is easy to realize unified standardized operation of power exchange.
The upstream of the power exchange station industry chain can be divided into two parts: power exchange equipment and power battery manufacturers, the middle stream is the power exchange station operator, and the downstream is the new energy vehicles that can be replaced and the power battery recycling. The power exchange mode mainly includes centralized charging mode and charging and swapping mode. The centralized charging mode is to centrally store, charge and distribute a large number of batteries through centralized charging stations, and provide battery replacement services for electric vehicles in battery distribution stations. The charging and swapping mode is based on the power exchange station as the carrier, and the power exchange station has both battery replacement and battery charging functions, including power supply system, charging system, battery replacement system, monitoring system, battery detection and maintenance management part, etc. In addition, the promotion of battery replacement mode is conducive to automobile manufacturers or power battery manufacturers as recycling subjects to lock the source of waste batteries in advance and realize batch recycling, thereby improving the recycling efficiency.
In 2021, domestic sales of new energy swap vehicles will be about 160,000 units, a year-on-year increase of 1.6 times, a market penetration rate of about 5%, and a retention volume of about 250,000 units, a year-on-year increase of 1.8 times. With the continuous maturity of battery swap technology and business model, the new energy swap vehicle market is expected to achieve rapid growth. It is estimated that by 2025, the sales volume of new energy swap vehicles is expected to reach 1.92 million units, with a CAGR of about 86%, a market penetration rate of about 16%, and the number of ownership is expected to reach 4 million units.
In recent years, the rapid development of new energy vehicles has also promoted the rapid growth of demand for exchange stations. Since 2021, the power exchange mode has received strong support from national policies, and all localities have increased the construction of power exchange stations. By the end of 2022, the number of exchange stations nationwide reached 1,973, an increase of 52% over the previous year. Among them, Beijing, Guangdong, Zhejiang, Jiangsu, Shanghai and other places have the top five substations, all of which have more than 100.
5.2. Many enterprises have accelerated into the power exchange track
At present, NIO, Aodong New Energy and Bertan Technology are the main domestic power exchange operators, operating 1300, 565 and 108 power exchange stations respectively, accounting for 66%, 29% and 5% respectively. NIO plans to add 1,000 new swap stations in 2023, accumulating more than 2,300 swap stations.
Under the vigorous promotion of local policies in recent years, with the continuous progress of power exchange technology and the gradual maturity of business models in the future, the market prospects will become more and more inventive, and battery replacement operators, main engine factories, and power battery manufacturers will compete for the power exchange track. Among them, battery swap operators Aodong New Energy and Botan Technology accelerated cooperation with mainstream car companies to develop battery swap models; NIO, GEELY, BAIC, GAC, SAIC, FAW, DONGFENG, Changan, Xiaopeng, Nezha, Jianghuai and other OEMs have actively developed battery replacement models, and some car companies have achieved mass production; Power battery manufacturers CATL, Guoxuan Hi-Tech, Funeng Technology, etc. actively explore and promote the power exchange business. Looking forward to the future, considering the rapid development of fast charging technology, the advantages of battery replacement technology will be weakened in the field of light vehicles, and it is expected that battery replacement technology will be mainly used in commercial vehicles such as heavy trucks that are difficult to achieve fast charging. With the continuous progress and optimization of fast charging technology and battery exchange technology, it is expected to form a new energy vehicle supporting infrastructure pattern in the medium and long term.
6. Investment analysis
Led by the global carbon neutrality goal, the number of new energy vehicles has grown rapidly, and the market penetration rate will continue to rise. Accelerating the construction of supporting facilities for charging and battery replacement will help support the high-quality development of the new energy vehicle industry. The demand for charging convenience and improving energy replenishment efficiency is increasing rapidly, and the imbalance between supply and demand is becoming more and more urgent. Relevant state departments are strengthening the top-level design of charging infrastructure industry development, will continue to optimize the planning layout and construction of charging network, propose to build a moderately advanced, balanced layout, intelligent and efficient charging and swapping infrastructure system, and promote the application of new technologies and new models such as high-power charging and rapid power replacement. At the same time, with the rapid growth of new energy vehicle sales, the vehicle pile ratio in the European and American markets is far behind the domestic level, and the European and American charging pile markets are in the early stage of the outbreak, and demand will usher in a significant increase. Domestic pile enterprises accelerate the layout of overseas and are expected to enjoy the rapid development dividends of the global charging pile industry with the advantages of high cost performance.
1) Improve the efficiency of energy replenishment, empower the rapid development of the new energy vehicle industry fast charging and battery replacement track, high-voltage fast charging has gradually become the mainstream of the market, core equipment suppliers with high-power charging technology reserves, and companies that actively layout battery replacement modes will benefit from the expansion of the charging and swapping market. 2) Domestic pile enterprises that have passed European and American standard certification and extensive sales channel layout, and have core technical advantages in the field of fast charging, are expected to take the lead in benefiting from overseas market volume.
(This article is for informational purposes only and does not represent any investment advice from us.) For information, please refer to the original report. ）
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