JW Insights: Chinese EV charger companies need to build plants or find manufacturing partners to enter the lucrative US market

来源:爱集微 #Markets# #EV charger# #EV# #Sunrise Technology# #Autel Technology#
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By Li Panpan

(JW Insights) Feb 27 -- Chinese EV charger companies will need to build plants or find manufacturing partners in the US by next year to meet the new rules launched by the Biden administration and to cash in on the fast-growing market potential there, said a recent JW Insights report.

The Biden administration issued final rules on February 15 concerning US electric vehicle charger network that require the chargers to be built in the United States and with 55% of their cost coming from US-made components by July 2024.

Cui Dongshu, secretary-general of the China Passenger Car Association, said the new rules “will greatly impact the business of Chinese EV charger companies exporting to the United States.”

Thanks to its early layout and rapid development, China has built up a quite complete new energy industry chain with advantages in cost and scale.

There are a series of Chinese EV charger companies that have been actively working on overseas markets since 2022. They include Sunrise Technology (炬华科技), Autel Technology (道通科技), Sinexcel (盛弘股份), Yinhe Electronics (银河电子), KSTAR (科士达), Injet (英杰电气), and Shenzhen CLOU Electronics (科陆电子). Among them, Sunrise Technology and Autel Technology have more business in the United States than their peers.

The general manager of an EV charger company in Shenzhen said, “The U.S. market value of EV chargers is expected to reach RMB20 billion ($2.89 billion) in 2023. The profit margin and price of EV chargers in the United States are similar to those in Europe. The gross profit margin of overseas projects is higher than that of Chinese domestic projects.”

In 2022, the penetration rate of new energy vehicles in China exceeded 30%, while that in the United States was only 6.8%, with much room for improvement in the North American market.

The EV-to-charger ratio in the Chinese market is 3:1. Comparatively, the EV-to-charger ratio in the US market is about 18:1, showing a considerable gap and substantial market potential.

With new subsidy policies introduced by the Biden administration, it is foreseeable that the new energy market in the United States is to usher in a period of rapid growth.

EV charger products are generally sold at a high price, with a massive demand for high-power DC fast-charging EV chargers. These imply good commercial opportunities for Chinese EV charger companies. But they would not have a competitive advantage if they did not meet the new rules. Therefore, they need to build factories or find manufacturing partners in the United States by July next year, along with the export of components and modules to the US to facilitate manufacturing, pointed out the JW Insights report.

Chinese companies whose business covers modules to chargers can obtain a gross profit rate of 30% in China and 50% in the United States. As long as the gross profit rate of a manufacturing partner is less than 20%, they still have a gross profit rate of more than 30% in the US market.

Industry insiders pointed out that the power electronics part and the assembly in EV charger manufacturing are light assets, easy and quick to transfer production capacity, so it is possible to get it done before July 2024.

Meanwhile, Chinese EV charger companies need to make a long-term plan and control quality design to meet local certification requirements to win the favor of the US market with cost and performance.

Overall for Chinese EV charger companies in the overseas market, they have enjoyed success in the European market, blessed with supportive policies of the Chinese government. Coming to the US market, Chinese companies might encounter more challenges.

责编: 张未名
来源:爱集微 #Markets# #EV charger# #EV# #Sunrise Technology# #Autel Technology#
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