§ Domestic: downstream demand improvement + policy driven, charging pile industry rising sun

· The penetration rate of downstream new energy vehicles continues to increase, driving the high demand for charging piles. With the increase in the penetration rate of new energy vehicles, the demand for charging infrastructure and related supporting facilities has increased, bringing huge opportunities to charging piles. According to data from the China Association of Automobile Manufacturers and Charging Alliance, the penetration rate of new energy vehicles in 2021 was 13%, the vehicle pile ratio was 3:1, and as of September 2022, the vehicle pile ratio was 2.6:1, which has not yet reached the goal of reducing China's vehicle pile ratio to 1:1 in 2020 proposed in the "Guidelines for the Development of Electric Vehicle Charging Infrastructure (2015-2020)". We expect that the penetration rate of new energy vehicles is expected to reach 39% in 2025, and the number of new energy vehicles will reach 36.51 million, assuming that the vehicle pile ratio will drop to 2.2:1 in 2025, then the number of charging piles in China will reach 16.6 million units in 2025, that is, the gap of charging piles in China will reach 13.98 million units. In May 2020, charging piles were included in the "new infrastructure" as a supporting facility for the promotion of new energy vehicles, and with the empowerment of new infrastructure and the support of local government policies, the charging pile industry rose to the east.

§ Current situation of domestic charging piles: AC slow charging is the mainstay, and high-voltage fast charging is unstoppable

· 

According to EVCIPA data, China is currently dominated by private charging piles (charging piles built with vehicles), as of October 2022, private charging piles account for 64%, public charging piles account for 36%. According to the classification of charging technology, mainly divided into AC and DC charging piles, at present, China's public charging piles are mainly AC piles, as of October 2022, AC piles account for 58% of public charging piles, and the proportion of DC piles is expected to increase.

· 

· 

Future trend: High-voltage fast charging effectively solves the endurance and charging anxiety of new energy vehicles, driving major global automobile manufacturers to launch 800V high-voltage platform models. As the models of the 800V high-voltage technology platform enter the mass production stage, the main engine factory actively builds its own charging network to accelerate the construction of high-voltage charging piles. High-voltage fast charging brings the re-selection of parts such as charging gun + wire, DC fuse and DC contactor, bringing new opportunities for the development of charging piles.

· 

· 

Market size: We expect that the penetration rate of new energy vehicles will increase from 13% to 39% from 2021 to 2025, assuming that the scrap rate of new energy vehicles is 8%, and the vehicle pile ratio decreases from 3:1 in 2021 to 2.2:1 in 2025, the number of new energy vehicles will increase from 7.84 million to 36.51 million, driving the number of charging piles from 2.62 million to 16.6 million. Assuming that 45% of new public charging piles will be added in 2025, 55% of new private charging piles, 65% of DC piles and 35% of AC piles will be added to public charging piles, we expect that the average price of DC piles and AC piles will be 50,000 yuan and 03,000 yuan respectively in 2022-2025, then the market size of charging piles is expected to reach 75.5 billion yuan in 2025, compared with 11.3 billion yuan in 2021, with a 4-year CAGR of 60.7%.

· 

· Competitive pattern: The technical threshold of the upstream charging equipment industry is low, the degree of product homogeneity is high, and the market pattern is scattered. The midstream charging pile operation industry has large initial investment, long return on investment period, high industry entry barriers, significant Matthew effect, and high concentration.

§ Global vision: The European and American markets have great flexibility in terms of volume and profit, and it is time for domestic pile enterprises to go overseas

· United States: The United States charging pile is divided into public charging pile and private charging pile according to the installation location, and is divided into: L1, L2, DC fast charging according to the charging level, and the current US charging pile is mainly L2, and L2 accounts for 80% of the public charging pile in 2021. According to AFDC data, at the end of 2021, the number of charging piles in the United States reached 133,000 units, with a pile ratio of 15.3:1, compared with the level of 3:1 of China's pile ratio, and the United States charging piles are more scarce. Volume: According to Marklines data, the penetration rate of new energy vehicles in the United States in 2021 is only 4.4%, and the sales of new energy vehicles will be 610,000 units, with the accelerated increase of the penetration rate of new energy vehicles in the United States, we expect that the sales of new energy vehicles will reach 4.73 million units in 2025, the number of new energy vehicles will reach 11 million, the ratio of vehicle piles will reach 14:1, then the number of charging piles will reach 786,000 units, corresponding to the sales of charging piles in 2021-2025: 22,000 units, 46,000 units, 129,000 units, 191,000 units, and 287,000 units, representing a four-year compound growth rate of 90.1%.

· Europe: At present, AC slow charging piles below 22kW are mainly in Europe, and the proportion of DC fast charging piles has increased; According to IEA statistics, in 2021, the number of new energy vehicles in Europe will be 5.46 million, and the number of public charging piles will be 356,000, corresponding to a vehicle pile ratio of 15.3:1. Volume: According to ACEA data, the penetration rate of new energy vehicles in Europe will reach 19.20% in 2021, with the accelerated penetration of new energy vehicles in Europe, we predict that the number of new energy vehicles in Europe is expected to reach 17.5 million units in 2025, assuming that the public vehicle pile ratio reaches 13:1 in 2025, then the public charging pile sales in 2025 will reach 1.346 million units, corresponding to the sales of public charging piles in 2021-2025: 83,000 units, 135,000 units, 210,000 units, 222,000 units and 422,000 units, representing a four-year compound growth rate of 50.1%.