Author: Huangshan
The charging pile industry has experienced rapid expansion of the market due to the recent large-scale infrastructure construction in recent years, which has also rapidly become a new red ocean market in the field of charging equipment with similar products and fierce price wars.
Last year, I wrote an article “29800 Suicide Pricing for 120KW Charging Pile, Is Charging Equipment Business Profitable? | Wending Observer” discussing the brutal price war of charging pile equipment.
We often say “you get what you pay for” and “good things come cheap”, but prices and quality seem to be paradoxical. In fact, companies are constantly pursuing the ultimate balance between price and quality.
What will happen to the charging pile industry in the future? What will Yang Guang Electric, a newcomer, do? What are the differences?
On May 7th, “Electric Vehicle Observer” visited the Yang Guang Electric headquarters to explore the company’s intentions, progress and goals in this field.
We were received by Wang Shu, President of the Charging Business Unit of Yang Guang Electric.
He first talked about the coexistence of challenges and opportunities: “Regarding the businesses that Yang Guang Electric is involved in, we either don’t do it, or once we do it, we must do it first. So the challenge is great and the opportunity is even greater.”
According to Wang Shu, Yang Guang Electric’s photovoltaic inverter business is globally ranked first, water surface photovoltaic equipment is globally ranked first, energy storage business is domestically ranked first, new energy investment development and wind power converter business are also at the top of the industry, and even the relatively new electric control business ranked sixth in domestic shipments last year. “All of our other businesses are at the forefront, while our charging business unit was just established last year, but our goal this year is to enter the first echelon of the industry.”
Is the Charging Business Unit of Yang Guang Electric ready?
A natural extension of new energy + outdoor activities + power electronics
Why enter the charging pile field?
To answer this question, we cannot separate it from the origins and core business of Yang Guang Electric.
In 1997, Cao Renxian resigned from Hefei University of Technology to establish Yang Guang Electric, and plunged into the photovoltaic industry, starting with photovoltaic controllers and inverters, and later expanded into wind power converters, energy storage, power station development, water surface photovoltaics, motor control, etc. For 24 years, all of Yang Guang Electric’s businesses have revolved around the technology route of “clean power conversion.”
And as mentioned earlier, Yang Guang Electric has achieved impressive results in every business. According to the 2020 annual report data, Yang Guang Electric’s full-year revenue was 19.29 billion yuan, a year-on-year increase of 48%, and its net profit was 1.95 billion yuan, a year-on-year increase of 119%. As of the close of May 18th, Yang Guang Electric’s latest market value is 126.4 billion yuan.I have summarized three key business areas of the group: new energy, outdoor, and power electronics. Sunshine has always been focused on new energy, and the products are mainly used outdoors. The demanding outdoor environment requires more stringent product requirements, and power electronics is our technical forte. All business changes should not deviate from our core values.
Combining the above three keywords, you will find that the charging pile products completely fit in, which is the power conversion between high voltage and low voltage, and AC and DC. Sunshine has accumulated deep knowledge in this field, so we have inherent genetic conditions for the layout of the charging pile market. Wang Shu said.
In fact, as early as 2017, the central research institute of Sunshine Power has begun to conduct pre-research on charging piles. In 2020, Sunshine Power officially established the charging business department, and the product delivery began by the end of that year.
The timing is just right.
In Wang Shu’s opinion, Sunshine Power’s entry into the charging pile field at this point is just right.
He believes that the domestic charging infrastructure has gone through three stages:
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The first stage was before 2015, an era in which some central enterprises represented the demonstration operation stage. At this time, the market was in its infancy, and the market was small and closed;
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The second stage was the rapid construction and operation of some private enterprises. Within a few years, the domestic charging infrastructure developed rapidly, entered the growth stage, but also because of the rush, the charging equipment products were of varying quality;
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Now it has entered the third stage. The sales of electric vehicles have continuously exceeded one million. After several years of survival of the fittest, the charging market has exploded both domestically and internationally and has formed a market of several hundred billion yuan.
“Especially after the charging infrastructure was included in the ‘new infrastructure,’ and the goal of carbon peak and carbon neutrality was proposed in China, combined with our light, wind and storage business, now adding charging piles, we can propose a complete solution for light, wind, and storage charging. Therefore, the timing is just right for us.” Wang Shu said.
Price, life, and efficiency cannot be lacking.
Sunshine Power will focus on the development, production, and sales of charging equipment, and its core market revolves around DC fast charging equipment for operation and AC and low-power DC equipment for users.
In Wang Shu’s opinion, the core demand of operating customers is to maximize economic benefits. Charging piles are production tools for customers, so price, life, and efficiency are indispensable.
“Our main product this year, the 120kW integrated charging pile, breaks the previous modular assembly and adopts a completely new structural design that integrates power conversion and control. The independent air duct design isolates pollutants completely from the electrical part. The whole lifecycle costs are 50% lower than that of the same level modular charging pile, the service life is greater than 10 years, and the efficiency is greater than 96%.” Wang Shu said when introducing the product progress.
How to balance price, lifespan and efficiency? Wang Shu gave an example. In the past, a 120 kW modular charging pile required 4 power modules, each with 4 cooling fans. After integrated design, only 4 fans are required, reducing the corresponding connectors, circuit boards, wire harnesses and other components. In addition, they can take advantage of the group’s advantages in component procurement and obtain lower purchasing prices.
Think from the customer’s perspective at the beginning of product development. The service life of charging piles on the market is generally 3-5 years, while the designed service life of Sungrow Power’s products is 20 years, with a guaranteed service life of more than 10 years.
The product testing process of Sungrow Power is exceptionally strict. After the internal prototype testing is completed, it is handed over to the company’s independent testing center that is independent of all business departments, which is equivalent to an internal “third-party testing agency”. The independent testing center has the power of veto and implements far higher internal standards than the industry. Taking related charging products as an example, a testing cycle is 42 days, meeting 1000 hours of uninterrupted testing. Once a performance indicator fails to pass, the product department has to make improvements and retest for another 42 days until they pass before mass production.
After the production of the product, a 100% aging check is required, which is different from many companies that only conduct randomly selected inspections. Only after aging check is passed, the product can be shipped.
Not Only Charging Piles, But Also Charging Solutions
Regarding the future development direction of the business, Wang Shu proposed that Sungrow Power not only produce high-quality and cost-effective charging equipment, but also collaborate with the group’s light wind storage business to provide overall charging solutions.
Regarding the application of light storage and charging, Wang Shu believes that the concept of light storage and charging is currently relatively strong, while its practicality is relatively poor. However, there is a demand in the market and it will continue to grow. Currently, the core factors that restrict it are the cost and safety of the energy storage system.
“When the cost of the energy storage system is reduced to less than 1 yuan / wh, I think the economic effectiveness of light storage and charging will become good. Our product’s safety and reliability are already the best in the country,” Wang Shu said.
In the current stage, he believes that there are two application areas that are more suitable for light storage and charging. One is charging stations with insufficient power capacity, which can use small energy storage methods to make up for it. Charge the off-peak electricity to the energy storage battery at night, and sell it back at a high service fee during the day, which is more suitable for cities with strong operational demand.
The other is the high-speed service area. The roof area of the service area is large, and the electricity consumption is also considerable. The cost of adding new electricity is also very high. At this time, using the energy storage system directly as a backup power source can not only provide power support for charging piles, but also for the entire service area. In this way, the economic benefits of the entire system can be maximized.
This Year’s Goal: 5,000 Units; Aim to Become the Top in China
“Last year we were newcomers in the industry. This year our goal is to ship 5,000 units and enter the top tier of the industry,” said Wang Shu.
Although standing on the shoulders of the group, the industry status of the various businesses in the group makes Wang Shu feel that the challenge is relatively great, but more is opportunity and excitement.
In addition to the DC fast charging equipment for operators, SUNGROW is also reserving AC charging stations and small-capacity DC charging stations for personal consumption. As cooperation with host manufacturers develops in this area, a relatively large amount of demand will be released.
In addition, SUNGROW’s charging business will move towards the international market, and overseas projects will be launched this year.
When faced with domestic and foreign competition, SUNGROW’s killer weapon is its extremely strong cost control and quality assurance capabilities. “The charging stations are the same. We only conduct research, development, production and sales of charging equipment. We are determined not to touch upon operation, and while ensuring quality and service, our future goal is to achieve a cost of less than 1 cent per watt,” said Wang Shu, providing us with their price goal.
When I heard this cost goal, I was shocked. The charging equipment industry will eventually undergo accelerated transformation.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.