China has built the world’s largest electronic vehicle charging infrastructure network, attracting capital from diversified sources.
Source: China Daily Read The Article
PSR Analysis: Everything is about big and large in China. Largest population or world’s biggest power plant, etc., for better or worse, people take pride in it. So is world’s largest EV charging infrastructure network a bad thing or a good thing? Well, if you are battery supplier, motor supplier or any other electrical supplier, it’s absolutely a good thing. It is the golden time for you now. If you are more of a “old fashioned” supplier, say, turbocharger, gearbox or engine, it is not a good thing.
But hang on; let’s look at other new energy markets before we explore more on EV network. We will circle back.
More than a decade ago, when central government wanted all energy companies to switch from coal to solar, wind and other alternative energy, energy companies like Shenhua or Huaneng were skeptical at best, if not vigorously against it. World’s largest wind power market or solar market? How can this be possible?
Turns out it’s possible, China is the largest wind power and solar market now. The key to that, is quota. Central government mandates that every additional MW produced by wind or solar, or any other “new energy” can be allocated to additional MW capacity produced by conventional coal mine power plant.
In other words, if you are an energy company and you want to raise your conventional power plant capacity, investing in wind and solar is the most feasible and efficient way.
Now, the central government thinks that what works for the energy market, must also work for the auto market. They are basically allocating quotas to all major automotive OEMs: if you want to make more conventional powered vehicles, make NEVs (New Energy Vehicle) first. After all, how different can these markets be?
And we are back on EV now. The thing is, automotive market is very diverse in terms of stake holders, suppliers, etc,. Unlike the energy market, where all the stake holders are state owned, Chine’s automotive market is basically market-driven. Policy and quota are just part of the factors in the market, not all of it.
Having said that, we see that EV practice is already working effectively in bus market through subsidy and policy. It’s only a matter of time when all buses in China switch engine to battery power.
Will that work in passenger vehicle market? I’m skeptical at best. PSR