Two Departments Jointly Released Implementation Opinions on Further Improving Abilities to Assure Charging Infrastructure Service (Exposure Draft)

1. Two Departments Jointly Released Exposure Draft for NEV Supporting Infrastructure

In late , NDRC and National Energy Administration released(shortened asbelow).puts forth improving the mechanism of carrying forward charging pile construction among resident communities. It also decides to incorporate eligible charging infrastructure and construction and transformation investment of supporting power grid into new infrastructure special bonds and support scope of China Clean Development Mechanism Foundation. China Development Bank and other financing institutions are required to utilize multiple channels to provide charging facilities construction with long-term low-cost capital support. Insurance institutions are also encouraged to develop commercial insurance products that are oriented to charging facilities.

2. Exposure Draft Covers Resident Communities and Expressways

(1) To accelerate construction and installation of charging facilities among resident communities

Exposure Draft puts forth improving the mechanism of carrying forward charging pile construction among resident communities. Administrative departments in charge of charging infrastructure in all regions and departments of housing and urban-rural construction, civil air defense and fire fighting should establish a collaborative mechanism to promote construction and transformation of charging piles among resident communities in an organized way. Administrative unit and owners committee must not obstruct charging pile installation if the community is eligible for installation. Special rewards are granted to those administrative units that provide great support during pile installation.

For existing communities, Exposure Draft emphasizes the importance of earnestly implementing Guiding Opinions of General Office of the State Council on Comprehensively Advancing Transformation of Urban Old Resident Communities (Guofaban No. 23, [2020]). Administrative departments in charge of charging infrastructure in all regions and department of housing and urban-rural construction should co-formulate charging pile construction plans for existing resident communities, with goals, key tasks and schedules well defined and with annual tasks and construction project pool well specified. This job should be incorporated into key programs to be carried out in an organized way.

Supporting facilities construction requirements for newly-built resident communities should be strictly implemented: well reserved installation conditions for 100% fixed parking spaces; power supply facilities including pipelines and bridges being well constructed at parking spaces to enable direct meter installation and power connection. In the meantime, to innovate service mode for resident community charging service, such as encouraging new modes like “sharing with the next space” and “sharing with other vehicles”.

(2) To accelerate the effective coverage of fast charge network on expressways

Exposure Draft puts forth that administrative departments in charge of charging infrastructure in all regions and Transportation Department should expedite the formulation of staged plans to cover fast charging network all across expressways in local provinces, which specifies construction standards of fast charging stations on expressways and urge property right units of expressway service zones to practically fulfill their entity responsibilities. To strengthen the management on project approval and acceptance check of fast charging stations on expressways and make efforts in supporting power assurance works. It is planned that by 2025, fast charging station coverage in service zones on expressways in national ecological civilization pilot zones and key areas of air pollution control will be no less than 80%, and that in other areas will be no less than 60%.

3. To Provide Long-term Low-cost Capital Support for Charging Pile Facilities Construction

Concerning optimizing fiscal and tax support policies, Exposure Draft puts forth elevating financial subsidies and tax preference for security-type charging pile facilities for expressways, villages and towns and resident communities; to establish service-quality-oriented operational subsidies standards and work harder to develop into excellent stations. To elevate subsidies for demonstration facilities such as high-power charging and vehicle-network connection to promote industrial transformation and upgrading. At the same time, get devoted to improving financial service. To incorporate eligible charging infrastructure and construction and transformation investment of supporting power grid into new infrastructure special bonds and support scope of China Clean Development Mechanism Foundation. China Development Bank and other financing institutions are required to utilize multiple channels to provide charging facilities construction with long-term low-cost capital support. Insurance institutions are also encouraged to develop commercial insurance products that are oriented to charging facilities.

4. Problems Identified in Current Domestic Charging Piles Industry

(1) Incompatible Charging pile interface

Construction of charging facilities are getting accelerated. However, the problem of poor compatibility among pile interfaces still leads to “charging inconvenience”, which further impairs NEV using experience. One obvious reason for poor compatibility among pile interfaces is that big NEV companies are fulfilling charging functions in their own ways. New national standards released in early 2016 forced most homemade NEVs to use unified vehicle charging interface, but apparently the unity has not yet extended itself to suitability of charging piles.

(2) Imbalance in geographic spatial distribution which has already raised a lot of awareness in this industry

When we observe public charging piles by region, they are chiefly distributed in some areas in east China and central China. Public charging infrastructure occupies 72% in top 10 areas and there are fewer public charging piles in northeast and western regions. The formation of geographic spatial distribution is closely related to disparity of development level in local NEV industry. This kind of disparity can also be seen among top 10 provinces, for instance, quantity of charging piles in Guangdong Province (the leading position) is three times that of Fujian Province (the last position). This demonstrate that NEV industry, including charging piles is still at the stage of policy support and it still has a long way to go from policy support to market orientation. Corresponding to that, in provinces where license restrictions are not being performed, there is an obvious decrease in quantity of charging piles. However, we need to admit the possibility that in some provinces underdeveloped in charging piles, unity and compatibility in charging pile interface will be very likely to catch up with and surpass the achievements in “developed regions” with the help of strengthened efforts made by local governments in NEV supporting industry.

(3) Private installation being restricted

Now that public charging piles are not able to fully satisfy the needs from NEV owners, is it possible to extend the use of private charging piles? The ideal seems developed fully, but the reality is actually skinny. There are obvious difficulties in implementation, most of which come from property sector. Concerns can mainly be concluded to two aspects: 1. Concerns for hidden safety hazards brought by electric vehicles. 2. Shortage in supporting cables. Generally speaking, consumers are prevented from buying NEV by the above two difficulties. It is of critical importance to remove these difficulties if NEV market desires to get improved.

(4) Efficiency performance of single charging pile

The industry has a common sense that breakeven can be realized if at least 7 charge cycles can be performed by each charging pile, while in most cases in China, this cannot be well realized.

5. Exposure Draft Clearly Puts Forth Solutions

Governments have already paid close attention to the aforesaid crux of problems lying in NEV industry, and have gradually released related policies. Government work report in 2020 puts forth the requirements of installing charging piles, promoting NEVs and motivating new consumption needs. In November the same year, General Office of the State Council clarified in NEV Industry Development Plan (2021-2035) that governments provide fiscal support for charging piles installations that work as public facilities and provide preferential policy support for NEV parking and charging. Government work report this year puts forth that extra parking spaces and charging and switching piles should be constructed. Issued by the two departments, Exposure Draft is to concretely implement the aforesaid policies by working out specific solutions for us to settle pain spots in charging and switching facilities deployment including charging facilities deployment in resident communities, urban-rural charging and switching network and supporting power grid.

6. Broad prospect in charging pile market

As production volume of NEVs keeps rising steadily, demands for supporting charging piles increase, which also puts domestic charging pile industry to the teeth of the storm in capital market. Presently, charging network construction is falling far behind planning. As of the end of 2020, nationwide NEV ownership was 4.92 million vehicles and charging infrastructure was 1.68 million piles accumulatively, shaping a vehicle and pile ratio of 3:1. In December of 2020, Equipment Manufacturing Division of MIIT released NEV Industry Development Plan (2021-2035) (Exposure Draft), which puts forth that the proportion of new NEV sales volume will be around 25% and NEV ownership in our country will be 16 million vehicles by 2025. It is calculated that there will be a gap of 63 million charging piles in the coming 10 years if the industry wants to achieve a vehicle and pile ratio of 1:1, which forms a trillion-scale infrastructure construction market. From the perspective of NEV sales volume versus volumes of charging piles, domestic charging pile industry is unlocking its huge potential for development, and there is a big increase for its promising future. With Chinese government switching its supportive policies from NEV industry itself to relevant facilities including charging piles, domestic charging pile industry is filled with hopes.