lectric Car Charging Stations Powering Down; Major obstacles, including battery-charging station woes, stand in the way of China’s push to put more electric cars on the road

02.27.2014 13:31

Electric Car Charging Stations Powering Down

Major obstacles, including battery-charging station woes, stand in the way of China’s push to put more electric cars on the road

By staff reporters Li Xuena and Wu Jing

(Beijing) — As China’s annual Spring Festival approached, travel madness seized the home-bound throngs rushing through terminals to airliners at Shenzhen Bao’an International Airport, one of the world’s busiest.

Beyond the runways, thousands of taxi drivers queued for passengers outside the airport’s terminal doors.

In sharp contrast to that frenzied scene in late January, and just 500 meters from a crowded taxi stand, the airport’s electric car charging station stood silent. Not a soul was in sight.

The Shenzhen airport is not the only place in China where a five-year-old government push for more electric-powered cars, taxis and fleet vehicles is floundering, in part due to unmet the challenges of battery-charging. Most electric car charging stations operating in Beijing, Shanghai, Tianjin and other major cities are now seriously underused or completely idle.

Charging stations have fallen silent due to weak demand for electric cars, a lack of technical standards, utility-car company disagreements and other hurdles that seem to run contrary to the government’s “new energy” policy initiatives.

Indeed, it wasn’t supposed to be this way. Government agencies around the country tried forging a market path by enthusiastically snapping up some 2,000 electric cars in 2010, including 400 sporting China’s most popular domestic car badge BYD.

Manufacturer BYD builds gas-powered cars but is best known as an innovative manufacturer of electric vehicles.

But the Shenzhen-based carmaker sold only 3,125 battery-operated cars nationwide in 2013, compared to 2,891 the year before. And in its own hometown, only 80 taxi drivers are behind the wheels of BYD’s E6 pure electric cars.

Sales in the public transportation sector have kept electric car makers alive. As of late 2012, urban mass transit systems had put more than 23,000 electric and eletric-gas hybrid buses on the streets in 25 cities.

But penetrating the consumer car market has been almost impossible. A high-level executive at one auto company who asked not to be identified told Caixin that fewer than 2,000 new electric cars have been sold to the general public since 2009.

Some experts say consumers are not necessarily against electric cars, but that they simply can’t fathom buying one without an adequate, roadside system for recharging batteries – a system for which power utilities and local governments have been responsible.

Wang Jie, general manager at BYD’s green transportation development department, said electric cars and charging stations need each other. Enough cars are needed for charging stations to operate within an economy of scale. And webs of charging ports in and between cities are needed to encourage consumers to buy electric.

“We hope power companies will further improve infrastructure,” said Wang. “If they’re not willing to build it, then we must build it ourselves.”

Dashed Hopes

At the Shenzhen airport, about half of the individual ports at the electric car charging station are no longer in use. Enough customers with battery-powered cars don’t come to justify full operation.

Some might argue the charging station’s operators shot themselves in the foot by adding a parking fee of 30 yuan for each vehicle hooked up to a charging port for the average six hours needed to power up a battery pack.

“No one has been willing to come ever since the airport started requiring parking fees,” said a charging station employee.

Moreover, since December, the station’s half-owner China Southern Power Grid started demanding that driver’s of E6 electric taxis pay only with cash. The Shenzhen airport authority owns the other half of the facility.

“When they hear that we require cash payment, many drivers turn around,” and leave, said the station worker.

The station has also been the focus of a land-rights dispute between Southern Grid and Shenzhen airport. This land dispute and soft demand for electric cars contributed to Southern Grid’s decision to stop building large charging stations in Shenzhen in 2012. But the utility has built seven small stations in the city over the past two years. It’s also agreed to operate two stations recently built by BYD.

Initially, Southern Grid and city of Shenzhen officials had high hopes for the electric vehicle industry. The two entities signed a deal in 2009 through which Southern Grid agreed to invest several billion yuan to build 89 charging stations across southern China, offering a combined 29,500 vehicle ports in three years. By mid-2011, the company had installed 556 ports at 12 charging stations in 10 cities in Guangdong and Hainan province and the Guangxi region.

In northern China, the regional utility State Grid Corp. has been following a similar course. The company had built 353 charging stations and 14,703 ports as of last year. Moreover, State Grid mapped out a plans to build an “intelligent charging” network for privately owned electric cars based on three scenarios: service for 500,000 battery-powered vehicles, 800,000 vehicles and 1 million.


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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