In early 2020, influenced by the popularity of the "new infrastructure" concept, as one of the seven major fields, the electric vehicle charging piles, which had been dormant for nearly two years, once again became the "favored" item in the capital market. Especially after the Spring Festival, "new infrastructure" was given the responsibility of stimulating the economy. Against this backdrop, the charging station index rose almost continuously after the Spring Festival, except for a sharp decline on the first trading day (February 3rd). 


As of the close on March 19th, the Tonghuaixun Charging Station Index stood at 2434.66, rising by 1.76%. Compared with the opening price on February 4th (the second trading day after the New Year), the charging station index has risen by a cumulative 32.45% over a period of more than one month. 
In addition to being highly sought after in the capital market, the physical investment in charging stations has also attracted the attention of major capital. 
Recently, China's leading battery power company, CATL, and a regional charging network operator, Baicheng New Energy, jointly established Shanghai Kaibu New Energy Technology Co., Ltd. CATL stated that the joint venture is developing an intelligent micro-grid integrated storage and charging system. This system was developed by CATL and integrates three functions: energy storage services, charging services, and electric vehicle inspection services. It addresses the problems of difficult power distribution, difficult site selection, and potential risks to the power grid in traditional charging stations, and can quickly establish a high-power super-fast charging network. This move officially marks that CATL has entered the new energy charging station industry. 
The midstream operator of domestic charging piles and charging stations, Xingxing Charging, told the "International Finance Newspaper" that they have always been very optimistic about the development of the charging pile industry. The re-emergence of the "new infrastructure" concept will drive the construction of charging piles to reach a new peak, enabling new energy vehicles to enter households more quickly and bringing about the transportation energy revolution earlier. 
Another leading operator, Tielianli, also told the reporter that the ultra-high voltage infrastructure under the new infrastructure construction is like the expressway for electricity, 5G is like the expressway for information, and what holds even greater potential is that charging stations will be the expressway for "new energy and big data". 
A shortfall of nearly 3.6 million private units 
In fact, before this, the charging station industry developed rapidly, but it still fell far short of the number of charging stations stipulated by the policy. 
According to public data, at the end of 2012, the number of public charging piles in China was 18,000. By the end of 2014, the total number of AC and DC charging piles in China reached 31,000. In 2015 and 2016, due to the large-scale popularization of new energy vehicles and the support of relevant policies, the growth rate of public charging piles increased by 115.7% and 185.3% respectively. These were the two most "glamorous" years for charging piles in the capital market. After that, the annual growth rate of charging piles slowed down, but the year-on-year increase was still over 50% each year. 
According to data from the China Charging Alliance, as of January 2020, a total of 531,000 public charging piles and 712,000 private charging piles had been built across the country. The ratio of charging piles to vehicles was approximately 3.5:1. However, due to the impact of the epidemic in February this year, the construction of charging piles basically came to a standstill. Nevertheless, as of February 2020, the cumulative number of charging infrastructure in China reached 1.245 million, an increase of 43.8% compared to the previous year. 
According to the "Development Guidelines for Electric Vehicle Charging Infrastructure (2015-2020)", by 2020, China will have built 4.8 million charging stations, capable of meeting the charging needs of 5 million new energy vehicles. Among them, there will be 500,000 decentralized public charging stations and 4.3 million private charging stations. Currently, public charging stations have already met the planning requirements, but the number of private charging stations is still far from sufficient. Additionally, according to the plan, the ratio of vehicles to charging stations is approximately 1:1, but currently the ratio is 3.5:1, meaning that 3.5 vehicles share one charging station, which is difficult to meet the demands of consumers. 
Tong Zongqi, the director of the Information Department of the China Electric Vehicle Charging Infrastructure Promotion Alliance, told the International Finance Newspaper, "In fact, as the range of electric vehicles has significantly increased, when the ratio of vehicles to charging piles reaches 1:1, there is an excess. 'We believe that a ratio of 2.5:1 is more appropriate.'" 
However, the current ratio of charging stations is not sufficient to meet the charging demands of consumers. 
Analysts from the New Era Securities Research Institute believe that with the significant increase in the number of electric vehicles in China over the next five years, the demand for charging stations will be huge, and the market size will reach tens of billions of yuan. It is expected that the corresponding charging equipment market size will be approximately 280 billion yuan, and the charging and service market will be approximately 40 billion yuan. The accelerated investment in charging stations will drive a significant increase in the demand for charging equipment, and will also lead to an increase in the revenue and profits of related industry chain companies. 
The public charging station industry chain can be divided into three major parts: hardware, operation, and solutions. Among them, the midstream operators responsible for the construction and operation of charging piles and charging stations will incur a large amount of capital expenditures, requiring a certain amount of financial strength. Moreover, the selection of parking spaces, wiring renovation, and operation management are somewhat challenging, making it the core part of the industry chain. 
After several years of accumulation and development, the operators have now shown a highly centralized trend. As of February 2020, the cumulative number of public charging piles of the top three operators, Tielong, Xingxing Charging, and State Grid, were 152,000, 130,000, and 88,000 respectively. The combined market share of these three operators reached as high as 70%, and the market share of the top 8 operators exceeded 90%. 
Tong Zongqi told the "International Finance Newspaper": With policy support, in the past two years, more and more enterprises have entered the charging station industry, including car manufacturers, state-owned enterprises, private enterprises, and cross-industry enterprises. This has led to a situation where the industry is currently flourishing with various options. Due to this, the competition among enterprises is also intense, and survival of the fittest is quite common. Overall, the charging station industry is still in the initial stage of development, with rapid growth but also lack of maturity. 
Tong Zongqi also pointed out that precisely because it is at this stage, the industry faces many difficulties. For instance, each company is still adjusting its layout and planning, and engaging in price wars due to competitive pressure. At the same time, for the majority of enterprises in the industry, it is still very difficult for them to make profits. 
Most enterprises are still in the red. 
The lack of a mature business model has always been a major "obstacle" hindering the development of the charging station industry. 
The research data released by Evergrande Research Institute in April 2019 shows that, from the perspective of public charging piles, based on the full life cycle profit model of charging piles, when the charging service fee is 0.6-0.8 yuan (the common domestic charging fee standard) and the equipment service life is 8 years, the corresponding break-even point usage rate for AC and DC charging piles is 6.3%-8.4% and 3.1%-4.2% respectively. However, the average usage rate of public charging piles across the country is 4%, and in Beijing and Shanghai, it is as low as 1.3%. The full life cycle of the construction and operation of public charging piles is generally incurring losses. 
From the perspective of private charging stations, the lack of fixed parking spaces in old residential areas makes it impossible to install private charging stations. In many existing commercial housing communities, the property management often refuses to allow homeowners to install charging stations on the grounds of insufficient transformer capacity and potential safety hazards. Tong Zongqi also pointed out that the cost of new energy vehicles has been continuously decreasing, and private charging stations are equivalent to a component installed or given with the vehicle. Their costs are also being compressed. Although enterprises can make profits by installing private charging stations, the profit margin is not high. 
Although most enterprises in the industry are still in the red, some leading companies and small and medium-sized enterprises have already started to make profits. Tong Zongqi told reporters that leading companies have achieved profits because of proper operation and services, while small and medium-sized enterprises can often make profits in a relatively short period of time due to their smaller scale and easier management. 
At present, only Tielai Power and Penghui Energy have officially announced that their charging station business has achieved profitability. 
Teledian is one of the leading enterprises that announced achieving break-even earlier. Teledian told the International Finance Newspaper, "Companies that struggle to make profits usually have problems in two aspects: one is the technical route, and the other is the operation and maintenance. 'A charging station is an intelligent product, with high requirements for technological iteration. At the same time, it needs to have the attributes of energy interconnection and data interconnection. And charging operation and maintenance require a large team and technical requirements.'" 
Teliaon Power stated that after nearly six years of development, they have come to understand that charging stations cannot simply be regarded as a simple charging plug; instead, they must adhere to the technical route of the charging network. In terms of equipment, they must insist on manufacturing high-quality and high-standard charging devices; in terms of operation, they need to achieve modular structure and intelligent operation management; finally, the flow guiding capability is also very important. They should actively promote the introduction of various ports such as car manufacturers, payment, navigation, maps, and networks to make the process more convenient and increase the traffic volume. 
Tong Zongqi also offered suggestions. For operators, to achieve profitability, the first step is to enhance service capabilities through on-site maintenance, remote support, etc.; the second step is to improve operational methods, such as increasing the usage rate of charging piles through appropriate discounts, and adding convenience stores, lounges, etc. as peripheral products around the charging piles; the final step is to promptly update and replace the charging piles, and adopt economic management methods such as building charging piles based on the habits of surrounding users.