Global EV Chargers are on Their Fast Track development

Recently, Guotai Junan Securities produced a research report on the charging industry, mentioning that the total sales of new energy chargers in the world reached 10.5 million in 2022, but there were only 1.8 million public chargers around the world, most of which were in China. Global sales are expected to reach 14 million in 2023, and the demand for charger will grow rapidly. The construction of charger stations in most countries lags behind that of new energy vehicles. In 2021, the global public charger ratio were as high as 10:1, and 68% of the existing public chargers are slow chargers. The EU plans to invest 172 billion euros in the construction of chargers by 2030. In 2022, China established 2.59 million new charging facilities.The charging   industry is ushering in a period of rapid development driven by new energy vehicles

Diversification of charging products

The upstream of the charging industry chain is charger hardware equipment and various components. These hardware equipment includes charging modules, power distribution filtering equipment, monitoring and billing equipment, and battery maintenance equipment, etc. Various components involve contactors, connectors, watt-hour meters, display screens, housings, plug sockets, cables and others. The cost of hardware equipment is the main cost of charging pile, accounting for up to 93%; while the cost of charging module is the major cost of charging hardware equipment, accounting for about 50%.

Potential space for charging infrastructure is huge

The booming development of new energy vehicles drives the rapid growth of the demand for charging infrastructure. With the rapid growth of new energy vehicles, there are higher requirements for the number of charging infrastructure and charging speed. At present, most of the charging places for electric vehicles are residences and workplaces, and the charging facilities that can quickly replenish electricity on the way are not yet perfect. To solve the problem of mileage anxiety and make electric vehicles as fast and convenient as traditional fuel vehicles, it is necessary to accelerate the construction of public charging facilities. In 2021, the global public vehicle charging ratio is about 10:1, and 68% of the existing public chargers are slow chargers. The power supply speed of slow charger is far lower than that of fast charging. Facilities are under construction. In addition, the continuous penetration of new energy vehicles will bring more demand for private chargers, and the market for chargers is broad.

Global sales of new energy vehicles are expected to reach 14 million in 2023. Looking at the Chinese market, with Tesla’s price reduction to release demand and BYD’s strong performance, the sales volume of new energy vehicles in China is expected to exceed 8.8 million in 23 years, a year-on-year increase of 30%. In the U.S. market, with the implementation of the IRA plan and the removal of restrictions on model sales, it is expected to further stimulate sales demand, and the current penetration rate of new energy vehicles in the U.S. is less than 10%, so there is a lot of room for improvement. We anticipate the overall U.S. sales to reach 1.8 million in 23 years vehicles, a year-on-year increase of more than 50%. The European market maintains relatively stable growth, with sales expected to reach 3 million vehicles in 2023. The continued high prosperity of new energy vehicles will stimulate the demand for charging piles.

The global market for chargers is vast

The number of public chargers in the world is growing rapidly. In 2021, there were nearly 1.8 million public chargers in the world, a year-on-year increase of about 40%, of which about one-third are fast charging piles. China is the largest market for new energy vehicles in the world and has a dense population. With the support of policies, it is actively developing charging infrastructure. Therefore, most of the chargers are   in China, and more than 40% of chargers charge fast, which is much higher than other areas. Europe ranks second in the number of chargers, with more than 300,000 slow charging chargers and nearly 50,000 fast chargers in 2021, a year-on-year increase of 30%. In 2021, there were 92,000 slow chargers in the United States, an increase of only 12% year-on-year, the slowest growth among major markets. There were only 22,000 fast chargers, of which nearly 60% are Tesla super charging chargers.

Between 2015 and 2021, the proportion of EVs per charging point in China, South Korea and the Netherlands remains relatively flat at less than 10 vehicles per charging point. This reflects charging infrastructure deployments matching the pace of EV inventory growth. However, the number of new energy vehicles in the United States and Norway has grown significantly faster than the number of public chargers. In most countries, the vehicle-to-charger ratio is rising as the share of EV stock increases.

In 2021, each charger corresponds to 10 electric vehicles in average globally, and each electric vehicle corresponds to a charging power of 2.4kW. Among them, the construction level of charging facilities in China has exceeded the global average, with a public vehicle-charger ratio of 7:1 and a charging power of 3.8kW per vehicle. The construction of charging stations in the United States also needs to be improved.

Investment Analysis

Ev chargers are an indispensable part of the rapid development of new energy vehicles. The global new energy vehicle market is booming, with total sales exceeding 10.5 million in 2022 and expected to reach 14 million in 2023. However, the construction of supporting charging infrastructure is lagging behind. In 2021, there were only about 1.8 million public charging piles in the world, of which only one-third were fast charging piles. From 2015 to 2021, only a small number of countries, such as China, South Korea, and the Netherlands, can match the growth rate of charging pile deployment to match the growth of electric vehicle stock, and the ratio of vehicles to piles in most countries is on the rise.

In Europe and the United States, there are common problems such as high public vehicle-charger ratio, uneven distribution, and low proportion of fast charging. In recent years, all countries have introduced policies to strongly support the construction of charging infrastructure. Related department in China also proposed   to stimulate the construction of charging infrastructure again. To complete the goal, about 1 million public chargers need to be added, and new markets will be established. According to IEA estimates, there will be 5.5 million public fast-charging and 10 million public slow-charging chargers in the world by 2030. The electricity demand for charging in 2030 may exceed 750TWh, and the market space is vast. Enterprises with profound power electronics technology accumulation and having passed multiple product certifications at home and abroad are expected to win.