Charging Market Thrives Amid Challenges as China Moves Towards Trillion-Yuan Infrastructure Scale

The charging market is experiencing both prosperity and concerns as it moves towards a trillion-dollar scale. The enthusiasm for charging stations, particularly evident from traditional energy companies like the “Big Three” (China National Petroleum, Sinopec, and CNOOC), highlights this trend. Data shows that by 2024, the total number of charging infrastructure units in China will surpass 10 million for the first time, reaching 12.818 million—up from just 1.68 million five years ago. Correspondingly, the number of new energy vehicles (NEVs) has surged exponentially, from 120,000 units in 2014 to 31.4 million units in 2024. There are 568,000 companies related to charging stations competing for a market valued in the hundreds of billions, with an annual expansion speed of a million units, leading to an increasingly dense charging network. Yet, the persistent issue of “charging anxiety” still looms large.

Structural Contradictions Behind the Prosperity

Chen, a resident of Hangzhou, Zhejiang, reflects on his daily commute: “There’s a charging station every kilometer, but thinking about a long trip home of 1,000 kilometers makes me worried about being stranded during the holidays.” After much consideration, he chose a hybrid vehicle that can run on both gasoline and electricity, striking a balance between cost-effectiveness and practicality. Many share this sense of anxiety. In 2024, the sales of hybrid passenger vehicles reached 2.485 million, accounting for 40% of the new energy vehicle market, offering clear advantages with lower energy consumption than gasoline cars and eliminating the range anxiety associated with pure electric vehicles.

As of the end of 2024, with 12.818 million charging stations and 31.4 million NEVs on the road, the vehicle-to-charging station ratio stands at 2.45:1, which may seem adequate. However, a closer look reveals hidden issues—over 70% of the 12.818 million charging stations are private, leaving less than 30% as public charging stations. When considering only public stations, approximately eight vehicles share one public charging station. The demand gap is especially pronounced during major holidays like the Spring Festival. Regional disparities are also evident. According to the EVCIPA’s report on the operational status of electric vehicle charging infrastructure in October 2024, public charging stations in China are unevenly distributed, with a higher concentration in southern and eastern regions. For instance, Guangdong, Zhejiang, and Jiangsu provinces account for 35% of the country’s public charging stations. In Chen’s hometown, a fourth-tier city in central China, public charging stations are sporadically scattered. In the vast rural areas with lower penetration of new energy vehicles, the situation appears even bleaker.

In recent years, high-voltage supercharging technologies ranging from 800V to 1000V have attempted to alleviate owners’ “refueling anxiety” by improving charging speeds. However, a reality persists: supply imbalance between fast and slow charging stations. The latest analysis from the “China Electric Vehicle User Charging Behavior Research Report” indicates that most users of public charging stations are sensitive to charging times, with a demand ratio for fast to slow chargers exceeding 9:1. In contrast, the current construction ratio for public charging stations stands at about 4:6. The era of “one second equals one kilometer” in supercharging faces significant challenges.

Charging anxiety can also be acute in specific scenarios. In one of Hangzhou’s busiest areas, Qiu Shi Elevated Road, nearly 47% of the vehicles on weekdays are new energy vehicles. A Didi driver, Mr. Pang, speeds to a public charging station to complete his last order before noon. “The valley electricity prices are particularly low at noon, coinciding with peak lunch hours for ride-hailing drivers, making it hard to find a charging spot,” he says. “Occasionally, I encounter gasoline vehicles occupying charging spaces, and it feels even worse when electric cars charge but don’t leave.”

Long-term Business Perspectives

“Cost is actually the biggest constraint,” several charging station operators highlight, pointing directly at the structural contradictions. From a business perspective, the seemingly booming charging station market is not a quick-money venture. “The cost to build 10 regular fast-charging stations ranges from 800,000 to 1.2 million yuan. The investment for supercharging stations is double that of fast chargers and more than 20 times that of slow chargers,” says Li Liang, director of the operations management department at State Grid Zhejiang Electric Vehicle Service Co., Ltd. In Zhejiang, which ranks high nationally in NEV ownership, the payback period for popular urban stations is around 3 to 4 years, averaging 8 years across the region, while rural markets see payback periods at least double that. This situation tests companies’ operational patience.

Major players like Telda and State Grid have encountered lengthy periods of losses. For instance, Telda entered the market in 2015 and only turned a profit in early 2023, facing losses again in the first half of 2024. The difficulty in achieving profitability exacerbates the market’s structural contradictions: on one hand, urban areas have limited high-quality opportunities, but many charging stations continue to be established in densely populated urban areas, while on the other hand, rural markets are vast yet dispersed, leading to smaller station sizes, higher operational and maintenance costs, and long payback times, discouraging stakeholders from proactive investments.

In the logic of new infrastructure, the egg must come before the chicken. However, the incubation of the egg requires “a guiding hand” to create a favorable environment. In Zhejiang, which has built the second-largest provincial charging service market and network, various policies are being implemented to accelerate the development of the charging network. In July 2023, the “Action Plan for Improving the High-Quality Charging Infrastructure Network and Promoting New Energy Vehicles in Rural Areas (2023-2025)” set a target: by 2025, the province aims to establish over 2.3 million charging stations (with no less than 900,000 in rural areas) and 120,000 public charging stations (with no less than 20,000 in rural areas), creating a charging radius of five minutes in urban areas and half an hour in rural areas. On January 1, 2024, Zhejiang further reduced charging prices, optimizing peak and off-peak pricing for operating charging facilities, leading to an average decrease of 10%-15% in electricity prices.

Subsidy incentives are also being implemented differently across regions. In Hangzhou, urban charging stations receive a maximum subsidy of 200 yuan per kilowatt, while rural projects receive double that. In Ningbo, new public charging stations in rural areas and expressway service areas receive a special subsidy of 240 yuan per kilowatt, amounting to nearly 25 million yuan in subsidy funds over two years. Jiaxing encourages villages to reduce rental fees for charging infrastructure sites, amounting to approximately three million yuan annually.

The reinforcement of rural distribution networks is a prerequisite for accelerating the “incubation” of charging stations. From 2023 to 2025, Zhejiang plans to invest no less than 10 billion yuan annually in rural distribution networks, increasing low-voltage charging capacity to 160 kilovolt-amps and adequately pre-allocating power capacity for charging facilities. By 2024, the number of reported users in rural areas of Zhejiang reached 547,000 (including individuals), a year-on-year increase of 63.5%. A series of favorable policies has encouraged more market players to participate. In recent years, many companies have turned their attention to rural areas, accelerating the establishment of charging infrastructure networks focused primarily on fast charging.

Besides the “national team,” Zhejiang now has over 1,200 operators, both large and small, establishing charging stations in rural areas. Statistics show that by early 2025, 87 counties and districts in Zhejiang and 1,240 townships will have achieved 100% coverage of public charging facilities in county towns and 97% in rural townships. Many of those who were early to establish stations in county and township enterprises, along highways, service areas, and tourism hotspots are now able to earn a modest profit.

“Currently, policy subsidies can somewhat alleviate the profitability issues for charging station companies and guide optimization. However, from a competitive perspective, players will ultimately compete on charging station utilization rates, scale effects, supporting services, and financial advantages,” says Li Liang. The mechanism for survival of the fittest is being refined. In 2024, Hangzhou launched Zhejiang’s first rating evaluation system for charging facility construction and operation companies, implementing dynamic assessments across multiple dimensions such as company size, operational efficiency, and service quality, incentivizing companies to expand their construction scale, optimize service experiences, and accelerate the application of new technologies.

“It’s hard to sustain in this market without a long-term perspective,” many charging station operators expressed this sentiment. The transition from rapid growth and land-grabbing to meticulous cultivation and deep operations is a path that every industry must navigate. New profit potentials are emerging as some charging station operators recognize their new roles as innovative business entities, moving beyond a singular profit model. In 2023, the “Implementation Opinions on Strengthening the Interaction Between New Energy Vehicles and the Power Grid” emphasized the effective use of power batteries as controllable loads or mobile energy storage to connect NEVs with the power supply network.

In the following year, the national government released the “Basic Rules for the Operation of the Electricity Market” for the first time in 19 years, welcoming new business entities such as energy storage companies, virtual power plants, and load aggregators into the electricity market. “Charging station operators, especially those capable of dispatching large-scale charging resources, are naturally qualified load aggregators,” notes Li Xudong, a well-known media figure in the new energy sector. This means they can earn not only from users but also from the power grid.

The technological pathway from “0 to 1” has been established. New interactive models such as “invite to fill valley charging,” “V2G reverse discharging,” and “smart orderly charging” are being piloted across the country. For example, since 2020, State Grid Zhejiang Electric Power has built or upgraded thousands of smart orderly charging stations, establishing 17 V2G (bidirectional charging and discharging) demonstration stations and participating in various markets to achieve peak load reduction of over 115,300 kilowatts. However, challenges remain in the implementation of V2G, including battery cycle depletion, high retrofitting costs for charging stations, an immature electricity trading market, and difficulties in balancing vehicle and grid interactions. “To move from 1 to 100, we need to comprehensively consider various interests. It’s expected that vehicle-grid interaction will achieve large-scale application by 2030,” says Li Xudong.

Integrated solar energy storage and charging is another potential route. Some charging companies are attempting to build solar generation and energy storage facilities at their sites, creating “virtual power plants” deeply integrated with the power grid. During off-peak hours, they store electricity; during peak hours, they sell stored electricity to the grid or charge vehicles, capitalizing on the price difference between peak and valley periods. When profits from generation can cover charging costs, theoretically, free charging can be achieved.

To build high-quality development, the focus must not only be on today’s fast charging but also on the future of charging networks, energy trading, and interactions. Yu Dexiang, chairman of Telda, stated in a public interview that the charging industry must adopt a “power consumption” mindset, as electricity price variations are shorter than those of oil prices, presenting significant opportunities. As China gradually builds and perfects its electricity spot market, price fluctuations are expected to become more frequent and rational. If charging station operators can keenly capture spot market prices and guide users to participate in system peak shaving, they may find greater long-term profit potential.

“In the future, service fees may only account for about 30% of charging station operators’ revenue,” said a representative from a private charging station operator. In balancing current operations with future prospects, the opportunities for arbitrage in the spot market, auxiliary service revenues, and demand response subsidies are all promising. According to estimates from the China Automotive Technology and Research Center, by 2025, new energy vehicle sales in China will exceed 16 million units, achieving a market penetration rate of 50%. The charging market will expand in tandem, with the charging station industry expected to surpass 100 billion yuan in the same year. Under the Ministry of Industry and Information Technology’s goal of achieving a vehicle-to-charging station ratio of 1:1 by 2030, experts predict that China’s cumulative NEV sales will reach 64.2 million units by 2030, driven by policies, technology, and capital, propelling the charging market towards a trillion-dollar scale. Looking to the future, the era truly belonging to charging stations is just beginning.