10% turning point explored for new energy vehicles

Author: Huang Xiaoshan

Editor’s note: According to data from the China Association of Automobile Manufacturers, the total sales of new energy vehicles (NEVs) in the first seven months of this year reached 1.478 million units, with a market share exceeding the 10% critical point.

After passing the 10% turning point, NEVs will enter a faster period of popularization; the competition among automakers is undergoing drastic changes with new and old forces exchanging power; the supply chain is racing to catch up with the pace; and the charging and swapping infrastructure is finally facing the challenge of scaling up…

For this reason, “Electric Vehicle Observer” will launch a series of reports entitled “Exploring the 10% Turning Point”, of which this is the second.

Attached: first article: “NEV Market Share Breaks Through 10%: New Car Brands Soar, Traditional Automakers Lose Ground”

10 million, 20 million, do you still think it’s far away?

I’m talking about NEV sales.

According to data from the China Association of Automobile Manufacturers, in the first seven months, not only did NEVs account for 10% of total sales, but also the total sales exceeded last year’s full-year sales, with accumulated sales exceeding 7 million vehicles.

If nothing unusual happens, NEV sales this year will surpass 2.5 million vehicles, possibly reaching 4-5 million vehicles next year, and 6-8 million vehicles the year after – the development speed may exceed imagination after the 10% market share has been reached.

Are we ready for the large-scale application of electric vehicles? Especially when charging challenges are really coming – previously, charging demand was low due to the small scale. However, when 20%, 30% or even more new vehicles are electric vehicles, the “charging difficulty” will really come. Can the ideal “one car, one pile” community charging mode that electric vehicle owners prefer be realized?

Under the drive of policies and the market, and in the intersection of time and space, the answer to the community charging problem is gradually becoming clear. From private charging piles, shared private piles, community public charging piles, unified construction and operation, low-power DC charging, orderly charging measures, to destination charging, public fast charging, high-power supercharging, etc., the charging problem is being solved in a diverse and three-dimensional process.

The difficulty of community charging is gradually being revealed

How difficult is community charging?

I am in Beijing, a city where private consumption of electric vehicles was initiated earlier. What happens in Beijing has a certain pioneering significance.

The picture below is some of the private charging piles installed in the underground garage of our community, in various styles, all given as gifts by the main manufacturers when the cars were purchased.

I then went to the property company to inquire about the installation of the charging piles, but they sent me away with the excuse that the electric power capacity was insufficient and that they were waiting for notification from the electric grid.

This may be a common problem for many electric vehicle owners. Owners need fixed parking spaces, and must overcome the obstacles of property management and electricity supply, but most of the time they get stuck on fixed parking spaces and property management.

Is the property management right – is there really not enough electric power capacity?I consulted an expert in the electric power industry, who said that whether a property has enough capacity for electric cars is not up to the property management, but rather, if the community is directly supplied by the power grid, certification should be provided by the local power bureau, and the property management only needs to check whether the car owner has a fixed parking space and issue a consent for installation of the charging pile.

However, the reality is that the process should be like this, but it doesn’t always work out as planned. In recent years, with the continuous introduction of policies by the central and local governments and the increasing awareness of individual rights, the concept of property management has been changing, and the success rate of private charging pile installation has been increasing.

Nevertheless, the question we need to discuss is: When electric cars are widely used, especially in first- and second-tier cities, is this unordered installation of charging piles applicable? How to coordinate among car owner, property management, electric power, and parking? How to ensure safety, reliability, clear responsibility, and cost-effectiveness? Will the centralized charging cause impacts on the power grid?

Before answering this series of questions, let’s first talk about why we need to discuss this issue. Currently, charging in communities is the main scenario for car owners, and it is also the most convenient, economic and user-friendly charging method. If this issue is not resolved, it will greatly affect the promotion and use of electric cars on a large scale, impede the rapid development of the new energy vehicle industry, and thus affect the realization of China’s “dual-carbon” goal.

What problems or contradictions will unordered installation and charging bring? After communicating with many experts and companies in the industry, the following issues were summarized:

1. Cost and management issues, such as the high cost of each individual construction, uneven equipment quality, daily supervision, inspections, operation and replacement problems.

2. Issues of safety and responsibility, as the equipment and charging piles currently have no acceptance standards, which lead to safety problems in pipeline laying, cable, equipment, and charging processes, and who is responsible in case of accidents.

3. The problem of insufficient power capacity in the community and how to increase capacity, as well as the impact of simultaneous charging on the community’s power load.

4. The contradiction between parking spaces and charging piles in the construction process, especially in old communities where there are no fixed parking spaces, how to install charging piles.

5. Problem of mismatched number of cars and piles. Even if all the charging piles are installed, it may not meet the demand for one car per one charging pile when the number of electric cars in the community reaches a certain level, because parking is built based on a certain ratio, and there may be more cars than piles.

What is the ultimate goal of community charging? In one sentence: In the community scenario, all electric cars should be able to recharge to the fullest extent possible.

Along with this goal, who should solve the problems? How to solve them? Are there any good methods and sample projects worth learning and promoting?

Policies have been designed, now it’s a matter of implementation.

In the past few years, the central and local governments have introduced a series of policies related to electric cars or charging infrastructure. Here we will focus on several policies issued by the central government:

• 2015 Guiding Opinions of the State Council on Accelerating the Construction of Electric Vehicle Charging Infrastructure.
• 2016 Notification on Accelerating the Construction of Electric Vehicle Charging Infrastructure in Residential Areas and the attached Management Guide for the Construction of Electric Vehicle Charging Infrastructure in Residential Areas.# Policies Related to Charging Infrastructure in China’s New Energy Vehicle Industry

The Chinese government released the “Action Plan for Improving the Charging Guarantee Capability of New Energy Vehicles” in 2018, and the “Development Plan for the New Energy Vehicle Industry (2021-2035)” in 2020. As of May 20th of this year, the National Development and Reform Commission, and the National Energy Administration have organized the drafting of the “Implementation Opinions on Further Enhancing the Service Guarantee Capability of Charging and Swapping Infrastructure (Draft for Solicitation of Opinions),” which is referred to as the “Implementation Opinions.” The full text of the policy can be obtained by replying “community charging.”

After reading through these policy documents, one will notice that China’s policies are gradually becoming more specific and grounded, moving away from vague guidance.

In the latest “Implementation Opinions,” “Community Charging” is directly mentioned in the first paragraph, and the policy gradually expands to the public charging system. This shows that the issue of community charging difficulty has been highly valued by relevant central departments, and the opinions have given comprehensive and specific guidance.

Regarding local policies, it is particularly worth mentioning that of Chengdu. On August 18th, the latest “Implementation Rules for the Construction and Management of Electric Vehicle Charging Facilities in Residential Areas in Chengdu” was announced, which is even more grounded and provides specific goals. By 2025, all existing communities in Chengdu that have the conditions to construct public charging stations will be completely covered, and existing fixed parking spots in communities with the conditions for construction will be equipped with charging poles.

The “Implementation Rules” are divided into three categories based on the types of communities and charging poles: existing public charging stations in communities, existing private charging stations in communities, and charging poles built for new communities. In terms of management, it is divided into unified construction and operation, and self-construction and operation. Responsibility is also clearly defined.

The “Implementation Rules” also give a clear description of the construction and management procedures for existing public charging stations and private charging stations, as well as specific flowcharts, application forms, and agreements.

From the central to the local level, the top-level design of policies has been completed, and it remains to be seen how they will be implemented.

Who is going to build the charging infrastructure and how?

Currently, car manufacturers are providing charging poles based on the buy-car-give-charger model which will no longer be applicable in large scale applications.The head of a new car brand’s charging department, Tian Yu, said that in the early days, main automakers provided charging equipment and installation services to solve car owners’ charging problems while considering the adaptability of charging stations and interaction functions with vehicles. However, this approach will no longer be applicable as automakers cannot address issues such as power capacity, parking spaces, construction, and property management, particularly when multiple brands of vehicles exist in a community. Automakers operate individually and cannot coordinate with each other.

Tian Yu gave a small example that due to scattered deployment, the cable for installation has caused the collapse of bridges and corridors in some areas where electric cars are concentrated, exceeding the bearing capacity.

So if main automakers can’t do it, who is suitable to do it?

Tian Yu continued to add that the first problem to solve is the pipeline laying, which should be unifiedly installed by developers, power grid, or professional operators to solve the construction difficulties and high costs. Then, relevant standards and norms for equipment and services should be established, so car owners can choose to use the charging stations provided by automakers or buy them externally. The construction entity can collect service fees in reverse for construction input, just like broadband operators.

At the same time, he proposed that the trend in the future should no longer be to give away charging stations and installation services when buying a car; instead, professional operators should provide installation and charging services. Tesla stopped providing this service two years ago, and users need to pay an additional 8,000 yuan for installation.

Speaking of this, community charging can be divided into three segments: the first segment is the power supply side, which is solved by the power grid for supporting electricity construction. The second segment is the pipeline side, which is solved by the power grid, developers, or operators. The third segment is the charging side, which solves the installation service of charging equipment.

The second and third segments conform to the “unified construction and management” concept in the “Implementation Opinions,” and they are constructed and operated uniformly with paid services.

In reality, problems are always being solved and emerging in practice, and we are always looking for the optimal solution under limited resources.

In an interview, the chairman of Techrules, Yu Dexiang, pointed out that they have launched pilot programs in more than ten communities, providing a complete solution of “orderly charging + group management and control + low-power DC.”

Yu Dexiang pointed out that “orderly charging” is directly connected to the community’s distribution room to monitor the community’s power usage in real-time, and through “group management and control,” adjust the charging time and power to ensure that community power always stays under the safe line.

Using “low-power DC” can read the vehicle’s real-time power status and additional battery data, coupled with Techrules’ intelligent protection system developed over many years, making it safer than ordinary AC charging stations.

“Orderly charging + low-power DC” is an excellent solution to the contradiction between power load and charging needs. More importantly, it eliminates concerns about safety for all parties involved.

“In practical applications, we also face a contradiction between ‘disorder’ and cost. We don’t know where the next charging station will be built or at what location. Therefore, our current approach is to negotiate with community property management, concentrate on construction within a certain area based on charging demand, which can not only meet the charging needs of car owners but also save construction costs,” said Yu Dexiang.

Another charging operator, StarCharge, also has its own solutions and explorations. StarCharge Vice President Wang Lei introduced their plan by saying, “With the popularization of electric vehicles, the community charging problem will mainly be concentrated in the first and second-tier major cities. Currently, StarCharge adopts the following solutions: first is private station sharing, mobilizing car owners to share charging stations with other car owners in the community, especially in some old communities where the effect is good, with over 60,000 shared charging stations; second is promoting ordered charging, similar to what everyone is doing; third is ‘home charging,’ which is our project name, specializing in solving community problems, jointly mobilizing property owners and management to invest, or jointly investing with StarCharge to build public charging stations in the community, both solving problems and sharing benefits; fourth is real estate + property planning and development. Currently, StarCharge has cooperated with many real estate developers to build or renovate community charging facilities and transfer them to property management for unified management; fifth is to build public charging stations around the community, as close as possible to the community, requiring operators to rely on big data capabilities to accurately invest according to charging demand.”

It is not difficult to find that property management and electricity are the two obstacles that cannot be avoided in communication. Property management has no power, only obligation without benefits, which is a typical mismatch of responsibilities and rights. Because the power grid is too vast, the actual implementation of electricity is slow.

The electricity industry expert mentioned at the beginning of the article that “Community charging is a process that is gradually solved over time, first with a change in perception and policy guidance. Previously, property management was the main obstacle, and there were limitations in understanding electric vehicles and charging stations. After several years of development and guidance, many community property management units have a high degree of cooperation and successful installation rates have greatly improved. Secondly, for communities with sufficient electrical capacity and fixed parking spaces, charging stations can be built. As long as the community is directly supplied with electricity from the grid, the local power bureau must cooperate. For communities with insufficient electrical capacity, if the community conditions allow it, they can apply to the power grid for increased capacity. It is the responsibility of the power grid to invest in construction.”

“Under the cooperation of property management, the influential factors become the matching problem between community electricity capacity and vehicle growth rate. However, increasing electricity capacity is not an immediate solution. Therefore, how to meet everyone’s charging needs as much as possible under the existing electricity capacity is the priority. ‘Ordered charging,’ which has been proposed in recent years, attempts to solve this problem by regulating charging power and demand through real-time monitoring of electricity loads, but there are still difficulties in the actual promotion process,” the expert said.The difficulty in promoting “ordered charging” lies in the inability to know the location, quantity, and time of the charging piles in advance, resulting in high construction costs and repeated waste. In fact, this is also a problem with the current piles. The expert believes that a better solution is to lay the main line to the parking lot in various areas at one time and set up a distribution box. One distribution box is responsible for N parking spaces, which can greatly improve efficiency and cost.

The expert also pointed out that the enthusiasm of property in community charging should be enhanced. On the one hand, community charging should be turned into a property service like sanitation, security, and community maintenance, and property participation and appropriate fees should be allowed.

In addition to focusing on solving community charging issues, we should also see the continuous development of public charging and destination charging, which are now being rapidly deployed in many shopping malls, parks, office buildings, public parking lots, hotels, scenic spots, and so on.

Another point is that public charging is faster, especially with the emergence of high-power supercharging, and charging problems are being solved in a diversified and three-dimensional way.

I don’t know if you have found the answer by now. My biggest feeling is that as the central government, local governments, and enterprises are all working hard to solve the community charging problem, with the development of the scale and the passage of time, this problem will certainly be slowly solved.

Now that the large-scale use of electric vehicles has arrived, although the challenge of community charging is great, it contains huge opportunities. If you are ready, you can take action.

(The person named Tian Yu in the article is a pseudonym.)

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.