China has about 10 million electric cars and way too few charging stations

Business & Technology

XPeng is the latest company to launch 800V fast-charging stations as China’s burgeoning electric vehicle industry scrambles to build enough infrastructure to keep EVs on the road.

Illustration for SupChina by Alex Santafé

On Monday, the CEO of XPeng Motors 小鹏汽车, Hé Xiǎopéng 何小鹏, launched his company’s new S4 charging station. The S4 supports 800V high-voltage fast charging (double the 400V in general use currently) with a peak power output of 480 kilowatts (kW).

  • In just five minutes of charging the XPeng G9 SUV, the S4 can add a range of 200 kilometers (124 miles). If it is charged for 15 minutes, the battery range increases from 10% to 80%.
  • By contrast, five minutes of charging at Tesla’s V3 charging station will produce a range of only 150 kilometers (93 miles).

(The 400V and 800V ranges are not exact values: Standard charging stations currently range from 230V to 480V, and are collectively referred to by the intermediate value of 400V, while the new fast-charging 800V stations charge at rates between 550V and 930V.)

The 800V fast-charging technology was first applied by Porsche in 2019 with its Taycan electric sports car, and a number of international brands have also launched 800V charging stations, including Hyundai, Audi, and Maserati. In September 2021, BYD Auto 比亚迪汽车 became the first Chinese brand to support 800V fast charging with the launch of its e-platform 3.0. Since then, more domestic brands have announced the launch of 800V charging stations (or plans to do so), including Great Wall Motors 长城汽车, Guangzhou Automobile Group (GAC) 广汽集团, and NIO 蔚来汽车. In all, there are at least 20 car brands around the world that have now implemented 800V fast-charging systems.

Many EVs, too few charging stations

From the third quarter of this year, XPeng will commence with constructing its network of S4 charging stations covering 10 of the largest cities and the major highways. The layout of charging stations in China is increasing rapidly:

  • According to the domestic electric vehicle charging infrastructure industry alliance, the size of China’s electric vehicle charging industry skyrocketed from 7.2 billion yuan ($1.06 billion) in 2017 to 41.87 billion yuan ($6.16 billion) in 2021, a compound annual growth rate of 42.2%.
  • According to the National Energy Administration, in the first half of this year, 1.3 million new charging stations were opened in China, 3.8 times more than the previous year.
  • As of June 2022, China had a total of 3.91 million units of charging infrastructure, including 1.52 million public charging stations and 2.39 million private charging stations.

But the rate of construction of charging stations pales against the massive and unrelenting expansions of electric vehicle and battery production and sales in China. There are now more than 10 million new energy vehicles (NEVs) on China’s roads (80% of which are fully electric vehicles), meaning that the current vehicle-to-station ratio is around 2.5:1. This is still far in arrears of the target of a 1:1 equivalent ratio set out in the 2015 government plan for electric vehicle charging infrastructure from 2015 to 2020.

Nevertheless, according to a Chinese research firm, from 2021 to 2023, China’s 800V charging industry is expected to grow by a compound annual growth rate of more than 70%. By 2025, the total number of NEVs equipped with 800V charging capability is expected to reach 1 million units, expanding at an annual compound growth rate of 270.9% from 2023 to 2025.

A problem of profitability

There are still wide disparities in China’s electric vehicle charging infrastructure between different provinces and cities.

Charging stations are mostly distributed in the eastern and central regions of the country, and there are a lot fewer stations in the northern and western regions, and in rural areas. Many of the existing charging stations, moreover, face the problem of usually standing idle, with intermittent periods of peak demand (for example, during public holidays). According to a local news report, the average utilization rate of charging stations in China is only about 4%.

The electric charging industry is composed of two basic models: one led by car companies that build their own charging stations, such as BYD and XPeng, and the other led by companies specializing in charging stations, such as StarCharge 星星充电 and TELD 特来电, which are more focused on construction in rural areas. According to the business database Tianyancha, there are currently more than 249,000 Chinese companies involved in the charging station industry, and in the first seven months of this year alone, 54,000 new companies joined the industry.

For the vast range of new companies operating in this relatively new industry, a profitable business model remains elusive, and this is putting a brake on more rapid construction of new charging stations. TELD, for example, reported cumulative net losses of 560 million yuan ($82.49 million) from 2019 to 2021.

The first problem is the relatively high construction cost — up to 70,000 yuan ($10,311) — of a single new fast charging station. But an even more debilitating factor is that, while most charging stations have very low utilization rates, charging companies have been engaging in price wars with each other, aiming to entice drivers with the lowest prices.

At the same time, many charging stations have safety hazards, such as voltage outputs that are too high, which put users at risk of electric shock.

The takeaway

China’s electric car industry has become the world’s largest and most dynamic, but it has raced ahead of the crucial charging infrastructure on which the cars depend. China’s electric charging industry is only now shifting to fast-charging stations, but the industry is yet to undergo a “smart” transformation.