Alleviate the contradiction between supply and demand of charging piles|Wang Qing: We need to rely on a sustainable business model

New energy vehicles are becoming more and more popular, and the demand for charging piles is also increasing. Although the government supports the construction of corresponding infrastructure through subsidy policies, the imbalance between supply and demand persists. On 12 March, The Paper interviewed Wang Qing, deputy director and researcher of the Market Research Institute of the Development Research Center of the State Council.

Wang Qing believes that it is first necessary to distinguish between the contradiction of aggregate quantity and the contradiction of structure. Simply increasing the total number of charging piles cannot fundamentally solve the structural problem. The key lies in the effective division of labor and cooperation between the government and the market, with the help of precise policy guidance, and the optimal allocation of resources through market mechanisms.

Wang Qing pointed out that the impact of policies on land, financing, and expansion on the construction of charging facilities is becoming increasingly apparent. It is necessary to promote reform and policy innovation, such as optimizing subsidy policies, promoting business model innovation, encouraging the diversification of market supply subjects, optimizing the layout of charging piles through data sharing, and stimulating the potential and vitality of the market.

Wang Qing, deputy director and researcher of the Market Institute of the Development Research Center of the State Council

Cultivating the market and stimulating vitality is the purpose of new energy subsidies

The Paper Report: What do you think about the government's subsidy policy for new energy infrastructure?

Wang Qing: Government subsidies are necessary. In particular, in the early stage of the marketization of new energy vehicle charging, cars and piles will fall into the dilemma of "chicken" or "egg" first. In this case, it is necessary for the government to build it as a public good and clarify the non-profit goal. When the charging facilities form scale effects and network effects, and have a sustainable business model, subsidies need to be gradually withdrawn to guide social capital to enter.

There is also a perspective that it is necessary to distinguish who will do it and who will pay the bill. Through subsidies, the market risk and cost of the enterprise subject are reduced, so that the cost and benefit can be matched as much as possible. The popularization of new energy vehicles, technological innovation, air quality, industrial upgrading, green development and other aspects have a strong spillover effect, the popularization of new energy vehicles, the benefits to the society and the country as a whole, greater than the benefits of manufacturers, charging enterprises, but enterprises can not completely convert it into profits. At this time, it is often impossible to form a sustainable business model, and it needs to be balanced with subsidies, otherwise there will be market failure. In the early stage of popularization, tax incentives or subsidies were given to consumers of new energy vehicles, which is roughly the same reason.

With the increase in the number of new energy vehicles, the relationship between costs and benefits will continue to change. When market players have the enthusiasm to enter the field of charging infrastructure construction and operation, it means that the market failure has begun to weaken. At this point, market prices and competition mechanisms can play a role, and market development will no longer be overly dependent on government subsidies, or in other words, the government should gradually withdraw from competitive markets, and subsidies should be withdrawn until they are eliminated. Therefore, the government subsidy policy is phased or structural, with the aim of cultivating the market, or increasing the supply of charging facilities for rural areas, sinking markets, remote areas and underdeveloped areas.

From the perspective of the implementation of the subsidy policy, one of the current problems is that the inclusiveness and inclusiveness are not enough, and they often tend to subsidize large-scale enterprises or state-owned enterprises, which affects the entry of new subjects, resulting in insufficient market supply and weak competitiveness of innovation. In the medium and long term, the dynamic and balanced development of market supply and demand must be achieved through market competition. This requires a gradual transition from policies that emphasize public goods and public goods to policies that emphasize competition. In particular, in terms of land, financial support, construction and operation bidding, it is necessary to allow more market players with different ownerships, different scales and different industries to enjoy policies and factors equally, and rely on technology and services to obtain the recognition of the market and consumers.

Of course, we must admit that enterprises of different ownership systems and different sizes do have their own advantages in terms of financing and credit. Charging pile projects have obvious economies of scale, long return on investment cycles, and high upfront investment costs, and small and medium-sized enterprises do not have the advantages of bank financing. However, this is a problem of financing methods and financial product innovation for small and medium-sized enterprises, and it is a general problem at another level.

The Paper City Report: There is a contradiction between supply and demand of charging piles in specific areas of the city, such as the core area of the city center and the old community. Is it possible to alleviate the problem of charging difficulties in specific areas by increasing the vehicle-to-pile ratio?

Wang Qing: A reasonable vehicle-to-pile ratio is a process of dynamic adjustment. In the case of continuous growth of the number of vehicles, the reasonable ratio of vehicles to piles in the city generally presents a wave pattern that is constantly pushed up, that is, it is first increased and then gradually decreased, and after the number of vehicles reaches a new critical point, it goes through the process of increasing to decreasing again, so as to advance. Therefore, the reasonable vehicle-to-pile ratio does not increase linearly in one direction, and it is not the higher the efficiency and the lower the cost of the more vehicles.

For example, in a city with few electric vehicles and scattered distribution, 1:5 may not be enough, but when the number of electric vehicles reaches a certain scale, the network effect and scale benefits of charging facilities appear, 2:1 may be enough. There is also a direct relationship between the ratio of car piles and the layout of charging piles, when the layout is unreasonable (such as in order to get subsidies and reduce costs, so that a large number of charging piles are built in the suburbs), the cars in the city can not find the piles, and the piles in the suburbs fall a layer of ash, and consumers feel inconvenient when they are 1:3, if the structure is reasonable, the supply and demand match is very good, and 2:1 may be enough.

Therefore, a good policy is to promote a high degree of matching between supply and demand, and dynamically optimize according to the growth of ownership, technical level, population flow, consumption scenarios, and seasonal climate changes, better meet the charging demand with the fewest piles, and find a balance between daily needs and extreme situation needs (such as high-speed on holidays).

Optimize the structure and layout from three aspects:

The first is to use big data and artificial intelligence to analyze the dynamically changing supply and demand data and consumer behavior, and connect with the user's charging service APP, optimize the layout of the incremental stock of facility construction in real time, and guide the user's charging behavior. Although enterprises can now aggregate and analyze their own data, the more comprehensive and extensive data of the overall market is still not shared and connected. To solve this problem, the government can establish specialized market-based alliances, or aggregate relevant data and outsource it to data service companies, but it needs to strictly regulate the use, use, and security of the data.

The second is to use power battery technology breakthroughs, such as the commercial application of solid-state batteries, sodium-ion batteries, lithium-air batteries and other technologies, to improve battery performance, efficiency and reduce charging time, so as to alleviate the demand pressure of charging piles.

The third is through business model innovation. For specific areas such as old residential areas, new business models can be explored, such as centralized battery swapping, mobile charging, and night valet charging, to alleviate the pressure caused by the insufficient supply of charging facilities.

Focus on complementary and transitional technical solutions

The Paper City Report: Now some car companies are promoting battery swapping in cities, what is the prospect of battery swapping mode in cities?

Wang Qing: As one of the solutions, battery swapping technology still has some specific constraints.

Solving the cost problem of battery swap mode is key. Although battery swapping can quickly complete energy replenishment and improve the convenience of electric vehicles, in the long run, the construction and operating costs of battery swapping facilities are still relatively high, including the construction cost of battery swap stations, battery management and maintenance costs, as well as the cost of battery cycle use and updating.

At present, it is believed that specific scenarios such as buses, factories and mines, airports, and highways can accelerate the exploration of applications. In addition, if the chassis is modular and standardized, or a number of enterprises form an alliance to unify relevant standards, realize the co-construction and sharing of battery swap facilities, improve economies of scale, integrate user resources, and reduce operating costs, it is also a direction that can be explored.

The Paper: In the past two years, consumers have pursued a better energy replenishment experience, and will choose plug-in or extended-range hybrid vehicles that can be charged and refueled. Are hybrid cars a trend?

Wang Qing: Although there are different views, the industry generally believes that the plug-in hybrid and range extender technology route is a transitional technology, not a medium and long-term development direction.

The length of the transition period depends on the development of power battery technology and fuel cell technology, as well as the perfection of charging infrastructure and the integrity of the entire market supporting system. If the charging infrastructure does not keep up with demand, or if there is a severe shortage of electricity supply, the transition period will be extended. If, as judged by the industry, fuel cell technology is the foreseeable ultimate direction of new energy vehicles, then pure electric technology is also a transitional technology to a large extent.

At this stage, the advantages of hybrid models are still prominent, including the use of oil and electricity, and they have great flexibility, and the power can be switched according to the scenario and actual conditions. In the past two years, there has been rapid growth in extended-range vehicles, but the total volume and proportion are still not in the same order of magnitude as pure electric vehicles.

Under the conditions of existing technology, supporting facilities, prices, etc., the consumption decisions made by consumers are rational, but this rational decision-making will change according to the changes in conditions. The attractiveness of BEVs will be greatly enhanced when the driving range of BEVs is greatly increased, the conditions of charging facilities are greatly improved, and the prices of refined oil/electricity are greatly increased. Of course, in certain situations, such as cold regions where climatic conditions have a greater impact on battery performance, the advantages of hybrid models may be more prominent.

Although hybrid models are currently attractive to some consumers, with the breakthrough of battery technology and the improvement of charging infrastructure, pure electric models will still become the mainstream technology for some time to come, and the relative superiority of hybrid models may gradually wane.

The key to the success of the Hefei model lies in the correct handling of the relationship between the government and enterprises

The Paper Report: Hefei has seized the development opportunities of the new energy vehicle industry through its strategic investment in NIO, attracting many local governments to learn from it. This is known as the "Hefei model". What do you think of the Hefei model?

Wang Qing: What we usually call the "Hefei model" mainly refers to the government's investment model in high-tech private enterprises such as new energy vehicles, so as to help these enterprises solve the supply of financing, land and other factors, and promote their rapid development. The Hefei government's investment in NIO has become a hotly discussed success story.

The cooperation between the government and enterprises should clarify the positioning of the government in the cooperative enterprises, and if it invests, it should be similar to strategic investment, and the government becomes one of the shareholders of the enterprise through investment, and does not directly intervene in the daily operation and decision-making of the enterprise. In this way, there is a possibility of success. On the contrary, it is necessary to observe the effect of directly participating in operation management and intervening in decision-making, and changing market-oriented management to "state-owned" management.

New energy vehicles rely on innovation. Innovation has risks such as technology, market, and policy, and it is very important to have a matching incentive mechanism, decision-making mechanism, and fault-tolerant mechanism. State-owned assets management objectives and regulatory indicators are difficult to adapt to high-risk, high-investment, and long-term projects.

Another feature of the Hefei model is that there is a reasonable boundary and division of labor between local governments and enterprises, so as to realize the development of their own strengths. In addition to direct investment, the government will also connect factor resources for enterprises, improve supply chains and supporting resources for industrial clusters, provide preferential policies, R&D subsidies, etc., to create conditions for the growth of enterprises. This support helps to reduce operating costs and enhance competitiveness.

The role of the government in the development of the new energy vehicle industry is more complex, not only to act as a promoter and supporter, but also to avoid excessive intervention and ensure the normal functioning of the market mechanism. The discussion of the "Hefei model" shows that the correct handling of the relationship between the government and the market, and providing enterprises with a suitable development environment and policy support are the key to promoting the healthy development of the industry.

At the same time, it should be objectively seen that there are only a handful of successful cases in the country, and there are countless unfinished projects that have led and followed the investment. In other words, other local governments have followed Hefei's lead and only seen government investment, but have paid little attention to the reasons for the real success.

China's new energy vehicle industry should give better play to its advantages

The Paper: What are the main advantages of China's new energy vehicle industry?

Wang Qing: First, the advantage of the super-large-scale market. China is the world's largest producer, consumer and exporter of new energy vehicles, accounting for 60% of the world's annual sales of new energy vehicles. The huge market scale provides a broad development space and market potential for enterprises. This scale is not only reflected in the scale of the market itself, but also in the scale effect of enterprise innovation. A market segment, regional market and consumer group can meet the scale requirements of multiple innovative enterprises, whether it is from 0 to 1 or from 1 to n innovation. This is an advantage that many countries do not have.

The second is the advantage of a complete and efficient supply chain. From upstream strategic minerals to downstream business model innovation, China's new energy vehicle industry basically has a global supply chain system, most of the parts can be matched in China, and a number of world-class industrial clusters have been formed around the automotive industry. This industrial ecology has supported China's new energy vehicle companies to rapidly increase their production capacity, so that they can hone their competitiveness in more fierce and full competition, and show cost advantages and efficiency advantages in the global market.

The third is the innovation and iterative advantage brought by full competition. It can be said that new energy vehicle companies that have succeeded in the Chinese market have the ability to compete on a global scale if they can adapt to various "volumes" in the market. Full competition allows enterprises to constantly innovate in technology, products, and business models, iterate rapidly, and adapt to changes in the consumer market and the competitive landscape. The fierce market competition environment has promoted the development of technological innovation and diversified business models.

Fourth, extensive social recognition and policy support. Whether it is consumers, governments at all levels, or the capital market, the recognition, acceptance and attention of new energy vehicles are very high. At present, the sales of new energy vehicles account for more than 30% of the total sales of automobiles. Young consumers pay more attention to product experience and technological innovation, providing a solid market foundation for the rapid popularization of new energy vehicles in the Chinese market. All these have provided innovative development impetus for the new energy vehicle industry.

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