In 2014, when the State Grid opened the electric vehicle charging pile market to private investors, it sparked a wave of rapid development in the industry. Many companies rushed into this emerging sector, hoping to capture a share of the growing market. However, more than two years later, the charging pile industry found itself in an awkward position—lacking clear profitability models and facing service shortcomings that left both users and investors frustrated.
Let’s take a closer look at what’s happening in the charging pile sector through insights from the automotive electronics editor.
One major issue is the poor maintenance and operation of public charging stations. Reports from Beijing revealed that many charging piles are either broken or not functioning properly. During field investigations, several stations were found with damaged equipment, and even well-known operators like the State Grid had multiple non-working units. This lack of reliability undermines consumer confidence and reduces the overall usage rate.
Another problem is the misuse of charging spaces. Often, regular gasoline cars occupy the designated parking spots for electric vehicles, leaving no room for EVs to charge. As a result, even though there may be over 20 charging piles available, only a fraction are actually in use. This underutilization leads to wasted resources and unmet demand.
From an investor perspective, the returns on charging pile projects have been disappointing. For example, in 2016, the State Grid installed 40,000 public charging piles but provided over 12 million charging sessions throughout the year. That means each unit was used less than once per day. With costs ranging from 5,000 yuan for a slow charger to over 30,000 yuan for fast ones, and service fees as low as 0.8 yuan per kWh, the break-even point would require continuous operation for over 260 days—something few operators can realistically achieve.
According to the China Association of Automobile Manufacturers, the number of new energy vehicles reached 1.09 million in 2016. Even with a 100% growth rate (which was not the case), the total number of new energy vehicles in 2017 was still around 2 million. This relatively small user base makes it difficult for charging pile operators to develop sustainable business models.
Despite these challenges, the government has played a significant role in encouraging the industry. In cities like Beijing, Shanghai, and Shenzhen, subsidies for charging pile construction have been introduced, sometimes reaching up to 30%. However, strict regulations and high requirements have made it harder for smaller companies to enter the market.
The charging pile industry remains in a tough spot—too early to see strong profits, but too late to avoid competition. While the long-term potential of electric vehicles is clear, the current state of the charging infrastructure shows that there's still a long way to go before the sector becomes truly viable and efficient.
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