“Charge for 5 minutes, run for 200 kilometers.”
Earlier, Guangzhou Automobile Aeolus (GAC Aion) had boldly stated their vision of “charge for 8 minutes, run for 1000 kilometers”, which sparked heated discussions and doubts within the industry. Recently, the company officially released their 6C ultra-fast-charging battery technology and 480 KW supercharger.
During the live broadcast of the release event, an AION pure electric vehicle equipped with Guangzhou Automobile Aeolus 6C battery technology successfully achieved their goal of “charge for 5 minutes, run for 200 kilometers”, and ultimately set a record of “charge for 5 minutes, run for 207 kilometers”.
Despite the distance from their original statement of “charge for 8 minutes to achieve 80% battery capacity and run for 1000 kilometers”, GAC Aion’s achievement of fast charging a high-power electric vehicle in just 5 minutes made their vision a reality.
The topic of ultra-fast charging technology for electric vehicles is not new. Prior to this, new energy vehicle companies and brands such as Porsche Taycan, Tesla, NIO, Xpeng, and SAIC Motor have released their own battery ultra-fast charging technologies and superchargers.
However, compared to the industry’s first mass-produced 800V high-voltage platform, the Porsche Taycan, which can achieve an 80% charge and run for 400 kilometers in just 15 minutes with a maximum charging power of 350KW, GAC Aion’s 6-fold ultra-fast charging technology, with a maximum working voltage of 880V and a maximum charging power of 480KW, is even more impressive, achieving a 200-kilometer run in only 5 minutes of charging.
On the same day as the release of the ultra-fast charging technology, GAC Aion announced that they would proceed with mixed ownership reform and introduce strategic investors, paving the way for their future listing.
On the evening of August 30th, Guangzhou Automobile Group (601238.SH) released a “prompt announcement on the proposed mixed ownership reform and introduction of strategic investors by its wholly-owned subsidiary”, which proposed to promote the mixed-ownership reform of GAC Aion by restructuring and integrating its new energy vehicle research and development capability and business assets, capital increase and expansion, and introducing strategic investors. In the future, GAC Aion will fully leverage the capital market and actively seek listing opportunities.
With the demonstration of their ultra-fast charging battery technology, electric vehicle range, and the broader development of the new energy vehicle industry and related industries, GAC Aion is making a name for themselves in the industry and paving the way for their future listing. This has sparked another round of attention and discussion, truly earning them the label of a “national team” in the field of technology.# China’s New Energy Vehicle Market
In recent years, Tesla, BYD, Great Wall Motors, XPeng Motors, NIO and other foreign-funded enterprises, private enterprises, or new forces have led the way in China’s new energy vehicle market. In comparison, the “state team” players are far behind in both sales and popularity.
However, GAC Aion is an exception. In terms of sales, the AION series firmly occupies the first place in the Guangdong-Hong Kong-Macao Greater Bay Area. The AION S has been successfully crafted into a popular model, and has entered the top five in the sales ranking of China’s new energy vehicle market from January to June this year. As for its level of interest, GAC Aion has always dared to speak up.
For example, with its ultra-fast charging technology, at the Electric Vehicle 100 Forum earlier this year, GAC Aion’s General Manager, Gu Huinan, revealed that GAC Aion will launch a graphene-based ultra-fast charging battery technology that can charge 80% in 8 minutes and have a range of up to 1,000 km.
Following this, Ouyang Minggao, an academician of the Chinese Academy of Sciences and the vice-chairman of the Electric Vehicle 100 Forum, said in a speech, “If someone says that their electric car can run 1,000 kilometers, charge in a few minutes, and it is particularly safe, and the cost is very low, you don’t have to believe it, because this is impossible.”
These two important figures in the industry, with different perspectives, suddenly pushed GAC Aion to the forefront of public opinion.
Although the two speakers had different starting points, with Gu Huinan based on the technical aspects and GAC Aion’s technical strength, and Ouyang Minggao considering the application aspect as a whole, the outside world still holds a view that GAC Aion is just “blowing hot air” and making big claims.
Before this, GAC Aion also publicly challenged Porsche Taycan and Tesla Model X, claiming to have the fastest zero-to-hundred acceleration among them. At the 2020 Beijing International Auto Show, GAC Aion announced its globally first high-performance “four-in-one” integrated electric drive with two speeds and two electric motors, which not only made Aion series models the “fastest car in China,” but also allowed them to accelerate from zero to 100 km/h in less than 3 seconds, entering the age of “2 seconds era.”
However, at the time, this topic did not cause controversy. Too many companies have been shouting to challenge Tesla, and GAC Aion, which had only been established for three years (then called GAC New Energy), was among the least mature “state team” players that the industry did not pay too much attention to.
It was the “8-minute charging for 1,000-kilometer range” event that brought unprecedented attention to GAC Aion while also facing doubts.
In order to prove that they do have the technological reserves and strength, and not just “empty talk,” GAC Aion has been releasing a series of technical announcements specifically aimed at these doubts, which has received widespread attention.At the beginning of March, GAC Aion released its pioneering magazine battery system safety technology, announcing that the ternary lithium battery package can withstand needle puncture without catching fire. In May, it released a needle puncture test of lithium iron phosphate magazine batteries, which proved the safety of their magazine batteries through two tests.
In July, GAC Aion revealed that their pure electric car AION LX, which boasts a range of up to 1000 km, has completed multiple rigorous tests and uses sponge silicon negative electrode battery technology. This news undoubtedly informed the public that GAC Aion has mastered significant technical skills in battery range.
Then on August 30, GAC Aion released their 6x supercharging technology and 480 KW supercharger, announcing that they have achieved “charging for 5 minutes and driving 200 km.”
GAC Aion continues to refresh the topic of “safety,” “range,” and “charging,” which have been the three major problems of new energy vehicle industry development. They label themselves as a “technology” company and work to deliver it in practice. In my opinion, this is a successful practice for GAC Aion, and even GAC Group.
Evidence shows that in the era of fuel cars, “market exchange technology” has proven the overall misjudgment of “national teams.” In the face of the significant opportunities brought by the car industry’s hundred-year transformation and the new energy vehicle’s new track, independent brands that have set out their path of development with “technology first” have proven significant and correct from the beginning.
Tesla, BYD, XPeng, and Nio all rush to the forefront of the road of “technology” inclusive of batteries and intelligence. As one of the “national teams,” GAC Aion has shown that even if they “boast,” they have to stick to the “technology” label, establishing a “technician image”–that’s how they have to do it.
Of course, saying is one thing, and doing it is another. Otherwise, the label will fall, and the image will collapse. But technology requires research and development, and R&D requires funding, and where does the money come from? Going public.
In November of last year, GAC Aion announced the independent establishment of their brand from GAC New Energy to GAC Aion, preparing for independent IPO. After the high-profile demonstration, they are now accelerating their IPO.
In the fiercely competitive new energy field, GAC Aion shoulders the heavy responsibility of GAC Group’s “14th Five-Year Plan” target: GAC Group’s new energy vehicle production and sales reached 700,000 by 2025, and GAC Aion accounts for half of this target. In a sense, GAC Aion is representing the “national team” in the race for breakthroughs.
Who will save electric vehicle range anxiety: supercharging or battery swap?
If your city does not have restrictions on purchasing or licensing fuel cars, would you still choose a pure electric car?
Even now, when the penetration rate of new energy vehicles has reached 12%, there may still be many who give a negative answer to this question.This is the embarrassment of new energy vehicles, especially pure electric vehicles—not relying on sufficient market competition, but developing forward with strong policy drive, as it applies to both the Chinese and European markets.
Consumers are hesitant because of anxiety about the range of the pure electric vehicle and its ability to replenish power. Electric vehicle batteries are affected by weather conditions such as air conditioning in the summer and warm air in the winter, requiring rapid consumption of electricity and significantly reducing the range of the vehicle. Additionally, the anxiety of not being able to recharge quickly or easily deepens the worry about range. In comparison, for gasoline cars, refueling is quick, convenient, and simple, without any anxiety about range or replenishment.
If pure electric vehicles want to have more market penetration and gain more market share, stronger policies are needed to push the industry and enterprises to consider solutions from the fundamental problems of addressing user concerns and needs. This includes solving the anxiety issues of vehicle range and replenishment. Moreover, by resolving the problem of slow or difficult charging, the issue of vehicle range anxiety can be addressed through replenishment.
Replenishment, currently, has two directions that the market and manufacturers are trying to explore: supercharging and battery swapping.
In April of last year, the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the National Development and Reform Commission jointly released the “Notice on Improving the Government Subsidy Policy for the Promotion and Application of New Energy Vehicles,” which stipulates that the pre-subsidy price of new energy passenger cars must be below RMB 300,000 (including RMB 300,000). To encourage the development of the “battery swapping” new business model and accelerate the promotion of new energy vehicles, the vehicle is not subject to this provision.
The national policy’s partiality toward the battery swapping model has accelerated enterprises’ efforts in this direction. Following BAIC New Energy, companies such as NIO, Geely, and SAIC Motor R have successively announced battery swapping technology and layout plans for swapping stations. The leading supplier of power batteries, Ningde Times, also publicly supports the battery swapping model.
For companies that prefer the supercharging model, there are also many, such as Tesla, Porsche, BYD, Xpeng, Audi, and Guangqi Aion, which have all chosen the supercharging technology route. While NIO is enthusiastic about the battery swapping model, it has not given up on supercharging, actively laying out battery swapping stations, as well as supercharging stations.
At present, there is no definitive conclusion about whether supercharging or battery swapping will be the more advantageous and efficient rapid replenishment method for practical applications. Different attempts by companies mean that they are weighing different pros and cons, depending on the efficiency of replenishment, separating the vehicle’s battery to reduce the consumer’s purchase cost, and the lifespan and security of the battery. The battery swapping model can also solve the problem of difficult recharging in old residential areas.So does this mean that battery swapping is definitely better than supercharging? Not necessarily. The promotion of battery swapping faces at least five major problems: whether the reliability of the circuit interface can be guaranteed; how to reconcile the contradiction between the universality of the battery pack among different models and the maximum efficiency of battery arrangement; how to layout the battery swapping stations reasonably, assuming that private car users have little demand for battery swapping, if the battery swapping users cannot reach a certain scale, how to recover the operating costs of the battery swapping stations; whether the high cost required for building battery swapping stations affects the layout and distribution of resources; who is responsible for the daily maintenance of the battery, and how to define the responsibility in case of safety problems.
So what are the advantages and disadvantages of supercharging? From the perspective of users, currently, the cost of using supercharging is better than that of battery swapping. From the perspective of manufacturers, the investment cost of supercharging stations is also lower than that of battery swapping stations; the use of supercharging stations can also enhance user stickiness better than battery swapping.
However, the difficulties that supercharging faces are no less than that of battery swapping, and the first and foremost is the impact on the distribution network. The author once interviewed Song Zhaoxing, the general manager of Beijing Jingneng Technology, who talked about Guangqi Aion S’s 6C battery technology and 480 KW supercharging pile. Regarding the ultra-high-power charging, he said, “The pressure on the power grid will be very high. In areas where the power grid is weak, supercharging can easily cause frequent power outages in small areas, and even local overcurrents, which may lead to electrical fires. Until relevant national policies and standards are introduced, and the distribution network is renovated, the universal promotion potential of ultra-high-power charging is not yet feasible.”
“Unless large-capacity energy storage is added. Light storage and charging integration, or storage and charging, can meet the power demand of 480 KW or even larger supercharging piles without renovating the distribution network. This solution is much cheaper than renovating the distribution network in terms of cost.” Song Zhaoxing said.
Therefore, “charging for 5 minutes and driving for 200 kilometers” is currently more of a height reached at the technical level. For large-scale promotion and application, the country needs to study and introduce policies and standards as soon as possible, and vigorously promote the renovation of the distribution network, especially the construction of smart grids.
Supercharging and battery swapping cannot be simply compared as to which one is better. The choice or abandonment of either mode needs to be viewed in a more nuanced light. Both fast energy replenishing methods can greatly alleviate the anxiety of electric vehicle range. As for which mode will become the mainstay or the supporting role in the future or whether both will progress hand in hand, it depends on the “education” of enterprises to the market and the choices made by users.
Serious excess capacity, the new energy vehicle industry will face a bloody storm
With Guangqi Aion’s attack on the technology and capital market, the author is reminded of a cruel picture: fierce competition has already taken hold in the new energy vehicle market. This fierce competition is reflected in everyone’s desire to enter the market.
When the new trend of car-making has attracted not only new forces and traditional car companies, but also tech companies, internet companies, and real estate developers, the production capacity of new energy vehicles has already exceeded demand.According to a set of research data issued by the Planning Research Institute of CCID Consulting, during the “14th Five-Year Plan” period, China’s new energy vehicle industry will face the risk of overcapacity. By 2025, China’s total production capacity of new energy vehicles is expected to reach 36.61 million units. According to CAAM and the Traffic Management Bureau of the Ministry of Public Security, the market size of China’s new energy vehicle market is expected to reach 5.3 million units by 2025.
With a production capacity of 36.61 million units and sales of only 5.3 million units, there is a serious overcapacity problem.
In fact, during the “13th Five-Year Plan” period, overcapacity in the new energy vehicle industry was already apparent. According to data from CAAM, the National Development and Reform Commission, and CPCA, China’s total production capacity of new energy vehicles had reached 26.69 million units by the end of 2020, while the market sales were only 1.367 million units. This meant that overcapacity had already occurred by the end of the “13th Five-Year Plan” period. Therefore, the overcapacity problem during the “14th Five-Year Plan” period is further exacerbated based on the foundation of the “13th Five-Year Plan” period.
What are the consequences of overcapacity? The most obvious one is more fierce competition, including vicious competition, waste of funds, idle land, and unfinished projects, which will seriously affect the healthy and sustainable development of the new energy vehicle industry.
Baoneng may be the first victim of this fierce competition. Four years ago, the “Baoneng-Wanke Controversy” made people remember Baoneng and Yao Zhenhua, who was good at capital operation, but was banned from the insurance industry for 10 years by the China Insurance Regulatory Commission. After the “Baoneng-Wanke Controversy” ended in March 2017, Yao Zhenhua saw the trend of new energy automobile manufacturing and established the Baoneng Automobile Group in order to turn theory into practice.
Within just two years, Baoneng Automobile acquired land in Guangzhou, Hangzhou, Xi’an, Kunshan, Guiyang, and other cities, under the name of “manufacturing cars.” Some land was used for real estate development, some for investment in new energy automobile industrial parks, and a total of 8 automobile industrial bases were established with an investment of 200 billion yuan, planning to produce 3.75 million vehicles annually.
The production capacity of Baoneng Automobile alone is nearly three times that of 2020’s sales of new energy vehicles.
As seen, Baoneng Automobile, without any experience in automobile manufacturing and lacking a qualification certificate, began its extravagant shopping spree, which is similar to the other real estate enterprises that entered the automobile manufacturing industry. However, the consequence of the spree was losses beyond expectation, which led to a huge capital chain crisis for Baoneng; furthermore, its previously-announced plan to mass produce new cars in November this year also encountered setbacks. The factories, parks, and automobile buildings planned by Baoneng Automobile, except for the factory in Xi’an, have all become fiascos.
The example of real estate developers and insurance companies entering the automotive industry, like Baoneng, is essentially a gamble, a harm to the healthy development of the new energy vehicle industry, a disrespect and trampling on the automotive industry, and is extremely harmful. The market will not condone this behavior for long. Simplicity is the ultimate sophistication. Whoever does not respect the market will be eliminated by the market because the market has a self-purifying mechanism of elimination.
It can be foreseen that after Baoneng, a large number of car manufacturers lacking advantages and seeking opportunistic profit will be eliminated from the market due to serious overcapacity in the new energy vehicle industry, and this is their inevitable fate. Everyone has to go through the test of competition.
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.