This article is reprinted from the autocarweekly official account.
Author: Wen Feng
During the May Day holiday, I drove a normal gasoline car and covered over 1600 kilometers. This car seems to have no connection with any advanced intelligent experience in 2021, but it can offer physical freedom for travel. On careful consideration, gasoline car enthusiasts can still mock electric vehicles in such a travel scenario, which makes me feel somewhat pessimistic. Shanghai found that its issuance of green license plates has already made traffic overwhelming this year, and in the foreseeable future, the favorable factor known to all as “green plates,” which is not quite presentable but still known to be beneficial, will gradually disappear from the list of reasons to buy electric vehicles. When it comes to confronting gasoline cars, can “electric dads” really handle these doubts?
Pain Points of Supplementary Energy are the Real Reasons for Your Refusal
Friends who have not bought electric cars may ask themselves: Why are you still unwilling to buy an electric car in 2021?
After the popularity of electric cars in private consumption over the past two years, you must have heard some rumors from friends about how “great” electric cars are. Tesla occasionally bursts out some sensational events, but you are not irrational enough to dismiss all electric vehicles at random.
However, people still have a vague uneasiness that can be seen in the online comments of senior electric vehicle haters, who say things like “I will never buy an electric car unless its real range can exceed 1000 kilometers, and it can be charged in only 3 minutes!”
We believe that readers of ACW have an average IQ of 120+. You will not be led by the nose by such remarks. After all, the top-selling mainstream gasoline cars on the market can run for only about 600 kilometers per tank of fuel. I suspect that this number is related to the physiological limits of the human brain, bladder, and rectum. Therefore, friends who often demand that electric vehicles have a range that can last for the duration of a satellite’s orbit should make a reasonable prediction of their own physical condition, okay?
In 2021, the hurdle that stops you from buying an electric car is probably not the range, but the “pain” during supplementary energy, which means spending an extra hour waiting for charging on the road and struggling to find a usable charging station because it is damaged or occupied, right?
So, how far away are we from seamless supplementary energy?
Battery Swapping: NIO is Great, But It Might Not Be a Model to Follow
Regarding seamless supplementary energy, many people recommend battery swapping.
Recently, I found that many users in some private forums of high-end new energy brands often discussed the same thing: even with the same range, many people are willing to pay more for NIO’s products, even though the entry-level ET7 with a 70 kWh battery pack costs CNY 448,000 before subsidies, because they are willing to pay such a premium for battery swapping services.
NIO has dug a very safe moat for itself, which is of course worth celebrating. But is it really a sample for other peers to learn from?
Actually, battery swapping is a car usage habit that directly originated from gasoline refueling. From the user’s perspective, there is no need to be “educated” to accept the battery swapping mode itself. However, from the enterprise side, considering the scale effect, this is the “right thing but difficult to do” – a unified charging interface is as easy as a unified refueling port, but universal battery swapping involves standardized service pricing, platform layout, and core triple-electric technology, which increases the complexity by several orders of magnitude to form the scale effect among enterprises.
NIO has entered the B/C segment market and has already delivered more than 100,000 units, with a high viscosity customer base, able to sell at a price of more than 300,000 yuan. Customers are also willing to pay almost the same cost as gasoline fees every month to rent a battery. This is a premium capability achieved by the new force brand through long-term efforts, and it is also the “invisible threshold” that makes it easy to overlook the promotion of the battery swapping mode.
For followers, regardless of how long it takes to recover the early investment cost, in order to make battery swapping a long-term and stable business, either users need to willingly pay higher usage costs than charging, or they need to be confident enough to win a high market share to dilute expenses.Otherwise, battery swapping can only be a “demonstration operation” project for high-frequency service of regional operating vehicles.
Looking at it broadly, targeting high-end positioning, the market capacity is limited after all. Other car companies in the mainstream price range of about 200,000 yuan cannot simultaneously achieve the following three:
- Launch enough similar-sized pure electric models (with universal potential for battery swapping);
- Ensure that these product combinations reach at least the sales level of NIO’s average of 7,000 units per month;
- Convince user groups that are more sensitive to costs to sacrifice some electric vehicle usage cost advantages to purchase battery swapping services.
Battery swapping seems very promising. Before industry standard rules and regulations are formulated, followers can do some demonstration operation projects to gain the right to speak when formulating industry standards. However, if they want to directly deploy and take the lead in competing against NIO, they need to think twice.
The outstanding point for NIO is that it has raised the expectations of users in the entire industry with a case that is difficult to replicate in a short period of time. Other car companies, unless they have stable financial power in these years, should still guide user expectations and use a better charging experience to “feed” customer expectations for power supplement, which will still be the mainstream route.
Fast charging, the Matthew Effect is emerging
The reason why users prefer battery swapping is that currently most users find that the core pain point of power supplement after switching from a gasoline vehicle to a pure electric one is “not fast enough”.In the selection of charging methods, NIO ET7 has done a very bold thing – canceling the AC slow charging interface and only retaining the DC fast charging interface.
There is evidence to support this judgment – field visits to some charging stations will show that most of the DC fast charging piles have formed professional fast charging stations, with orderly charging operations and fewer oil vehicles occupying the charging spots. For new energy vehicles that often come with about two hours of parking fee relief. On the contrary, the abandoned state of AC charging piles is quite serious at present. The probability of charging successfully by following the map is very limited, and the charging piles have become “numbered piles”.
Let’s take a look at two sets of data:
The utilization rate of charging piles, the industry’s recognized utilization rate number is below 15%. The data previously published by Techrules is 12%. The overall usage rate of charging piles in Shanghai has just risen from 1.4% to 6.82% in 2020.
As of the first quarter of 2021, the number of new energy vehicles in Shanghai is 386,800, and the number of public charging piles is about 85,000.
It is not difficult to find that there is a certain contradiction between the two sets of data – the number of car piles is more than four times that of charging piles, but the utilization rate of charging piles has been very limited.
This is related to the actual usage scenarios of public charging piles.
As of April 2021, the China Charging Alliance sampled information on 133.7 car piles, of which 378,000 pieces of information were not accompanied by charging facilities. Among these 378,000 pieces of information, 48.9% belong to group users who build piles on their own, while the truly pile-less private users account for only about 15% of the total samples.
It can be seen that most users are still choosing to purchase new energy vehicles based on the conditions of having their own charging piles, and those without their own charging piles are concentrated in operating vehicles and other scenarios. Combining the previous data on the actual utilization rate of public charging piles, it can be inferred that the actual utilization rate of public AC charging piles is very low. Most private users have stable charging conditions, and operating vehicles cannot accept such long charging times. It seems that it has become more and more ill-advised to arrange slow charging in public spaces.
## Do We Really Need Charging That Fast?
As it is known, rechargeable piles with extremely low power and circulation rates generate very low revenue but have extremely high site and management costs. Only quick charging piles with high circulation rates can maintain low electricity costs, bring relatively stable user experiences, and have the potential for long-term profitability.
It is rumored that fast charging business contributes to more than 90% of the revenue of China’s largest charging pile supplier, Teld. In April 2021, DC charging piles accounted for 41.8% of the charging piles reported by companies in the charging alliance, an increase of 0.5% compared with the same period last year. From January to April this year, 7116 out of Teld’s newly built 8007 piles were DC charging piles, accounting for as high as 88.9%.
The Matthew effect of fast charging piles is becoming increasingly significant.
However, regarding this trend, I have some thoughts.
Going back to the starting point of the problem, should we use gasoline vehicle’s thinking to pursue speed when it comes to the issue of supplementing energy? We measure electric vehicle charging efficiency with the efficiency of gasoline vehicles, but charging for several minutes to travel 500 kilometers is still a “tech talk” level technology within the current battery technology framework.
Even with more powerful charging technologies, the carrying capacity of the power grid must be considered. There are only about 25 Supercharging stations already built or planned by Tesla inside the Shanghai Inner Ring Road. If Teld screens DC piles above 90 kW, there are only two stations with 17 charging piles inside the Inner Ring Road. All of these are constrained by the carrying capacity of the power grid and the cost of retrofitting. To be precise, the opportunities that the manufacturer promises to trigger the maximum charging power are actually few and far between in actual usage scenarios.
The biggest difference between charging and refueling is that it can be distributed for energy supplement and penetrate into various scenes of our lives. You can charge at home but you can’t refuel at home. However, each increase in charging power will reduce the selection space of potential charging locations by an order of magnitude. In the end, users have to sacrifice the convenience of distributed charging for faster charging speeds.
Unable to achieve the efficiency of refueling, one also has to go to fixed locations to charge like refueling. Moreover, the high circulation rate of fast charging requires car owners to move their cars shortly after charging, which may not be very convenient if you want to go somewhere else for a stroll. In most fast charging stations, whether it is private car owners or ride-hailing drivers, you will see more people sitting in the car checking their phones or on the car’s built-in computer, and their time is fragmented and of low quality.Is this kind of charging experience really good? Some people don’t care, and it’s good to take advantage of the free time once a week. However, there are also people who feel frustrated with this fragmented charging experience.
The acceptability of charging methods and duration varies from person to person, but to achieve seamless energy replenishment, the pursuit of speed may not be the only way out, perhaps we can exchange space for time.
The amount of electricity required for users’ daily commuting is actually very limited. If low-power charging piles can provide energy replenishment for electric vehicles in every corner like capillaries do, and allow users to charge their cars as easily as charging their phones during meals, keeping them fully charged at all times, then why not?
Star Charge, GAC Aion, NIO, and other enterprises are all considering integrating more private charging piles into the charging network to activate idle resources. Jidu Auto has developed wireless charging function and hopes to realize the experience of vehicles automatically finding nearby empty parking spaces and opening charging after users get off…
The implementation of these functions also depends on many technical and operational “micro operations”. However, the innovative idea has shifted from the crude and linear thinking of improving the absolute speed of energy supplementation or increasing the number of charging piles to utilizing data and operational means to drive and optimize the convenience of energy supplementation in practical scenarios. Compared with the “slow charging 1.0” experience, “slow charging 2.0” driven by data will be a new realm worth looking forward to.
In conclusion
The popularity of new energy vehicles at the Shanghai Auto Show testifies the trend that is irreversible in the hearts of ordinary users. This also means that in the foreseeable future, more and more private users without their own charging conditions similar to fuel vehicle users will “touch the electricity”.
For these users, no matter in what form energy replenishment is available, if they can experience the scene of energy replenishment seamlessly and integrate it into their lives, they will truly feel the convenience of “charging is more convenient than refueling”. I think we are indeed not far from the eve of the explosion of the industry.
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.