Alliances Formed

Trend

With the significant increase in electric vehicle ownership and advancements in battery technology, the landscape of electric vehicle charging has shifted from individual competition among automakers to collaborative development, as seen with the Tesla-led charging alliance, NIO-led battery swapping alliance, and Mercedes-Benz and BMW’s joint effort in creating the ultra-fast charging alliance. Unlike price wars, technological battles, or marketing gimmicks within the automotive industry, a healthy growth of the charging market requires collective efforts from automakers to establish a sustainable ecosystem.

There is a growing number of alliances in the automotive industry. Recently, Mercedes-Benz and BMW have joined forces to establish an EV charging alliance. This collaboration between two major traditional fuel vehicle companies aims to develop EV chargers and can be seen as their final attempt or a backup force for BBA (BMW, Mercedes-Benz, Audi) in countering electric vehicles in China. However, it is worth noting that the establishment of charging alliances by car manufacturers indicates a new trend.

High voltage fast charging

In recent years, high-voltage fast charging has gained popularity, with car manufacturers releasing models based on 800V architecture one after another. Consequently, the establishment of charging infrastructure has become an urgent challenge for enthusiastic participants in this field.

Technical Advantages

Academician Ouyang Minggao of the Chinese Academy of Sciences pointed out that to address concerns about charging, we need fast-charging technology with higher power. Super-fast charging is the trend, and the industry needs to promote the adoption of electric vehicles on platforms with voltages ≥800V. On one hand, a higher voltage platform means shorter charging times, enabling a refueling-like charging experience.

On the other hand, increasing the platform voltage reduces the wire diameter of high-voltage harnesses, which can decrease volume and increase battery capacity and power. Additionally, a high-voltage platform can reduce current output, minimize heat generation, and lower demagnetization risks for motors. The advantages of an 800V high-voltage architecture are evident.

800V EV trend in EV company

Starting from 2024, the prevalence of 800V architecture is increasing. Lotus has introduced the ELETRE, a new car equipped with an 800V electronic electrical framework, boasting an impressive acceleration time of just 3 seconds from 0 to 100km/h. NIO has also announced the launch of its sub-brand Alps in 2024, which will feature the adoption of an all-800V architecture across its entire lineup.

The recently concluded Guangzhou Auto Show showcased over 50 high-voltage electric vehicles utilizing the powerful 800V platform. Models such as LUXEED S7, XPENG X9, Li Mega, ZEEKR 007, and Avita12 were successively unveiled as part of this trend. Upcoming releases include AITO M9 and Xiaomi SU7 among other models adopting the same advanced technology.

Traditional automakers like BYD, GAC, Geely, BAIC, FAW, Porsche, Mercedes-Benz, BMW, and Audi are also closely following suit.

Obstacles to promotion

Current Situation

Despite numerous attempts by various automakers, the market share of 800V architecture electric vehicles remains small in the current new energy vehicle market. Undoubtedly, the 800V architecture can significantly enhance the charging and driving experience of electric cars; however, the accompanying increase in costs, challenges in controlling component risks, and inadequate infrastructure support continue to hinder the widespread adoption of 800V architecture.

“Considering the fact that there are very few existing charging stations capable of supporting 800V, even electric vehicles equipped with an 800V architecture would still need to be compatible with 400V charging in order to avoid significant charging issues. The likelihood of 800V electric vehicles becoming mainstream in the short term is not high. High-end cars may serve as a marketing gimmick, but only when there is a sufficient number of 800V charging stations will 800V vehicle models have the potential to become mainstream.” stated Tesla battery engineer Chen Yi.

Cost considerations

The cost of fast charging stations is much higher than that of regular charging stations. Fast and supercharging stations developed based on high-voltage architecture generally cost over $14,000 per set, with most fast charging stations costing around $28,000 per set. Huawei’s hydraulic supercharger, a higher-tech product capable of delivering a charging power of 600 kW, costs nearly $84,000 per set. And this is just the initial investment required for building the charging station. The subsequent operation and maintenance of the charging station are even more demanding in terms of cost investment; it can be likened to a ‘bottomless pit’.

The payback period for a 60kW DC fast charging station, based on the cost of a regular charging station at $8,400 per unit and assuming a charging service fee of $0.1/kWh with a utilization rate of 5% (equivalent to being used for 1.2 hours per day), exceeds three years to recover the investment. If other costs such as operation and maintenance, land, and construction are included, the payback time will be even longer.

It is already difficult to turn a profit for regular charging stations, and it will take at least 4-5 years to do so for fast-charging stations. For car manufacturers, balancing cost investment with profit expectations also involves promoting the adoption of 800V models. They need to carefully consider how to make the right moves in this game.

Breakthrough

Charging stations are ultimately infrastructure, which means that the allocation of public resources is involved, including factors such as land, electricity, and jurisdiction. Different vehicle manufacturers are located in different regions with varying resource advantages, and government departments have different areas of responsibility. Achieving unified management is difficult due to these challenges inherent in integrating practical operations. Vehicle manufacturers cannot afford to overlook these challenges.

Tesla

Recently, Tesla China officially announced the upgrade of its comprehensive charging network, demonstrating their commitment to accelerating the popularization of green transportation through concrete actions. Following the pilot opening of charging stations for non-Tesla electric vehicles in April 2023, Tesla has once again expanded its accessibility by opening over 350 Supercharger stations and more than 250 Destination Charging stations. These additions provide charging support for over 30 different non-Tesla electric vehicle models.

Industry Response

Currently, the luxury alliance between Mercedes-Benz and BMW is leading the way, and it is believed that domestic car companies should also start considering the idea of forming alliances. According to reports, Lotus is taking the lead in establishing a ‘Fast Charging Alliance’ with the aim of creating a charging service organization targeting high-end brands. Mercedes-Benz and BMW may also join.

Summary

To expand the market, 800V vehicle models must first unite and break through the barrier of EV charging. In an economic downturn, the industry’s main task at present should be to seek unity, overcome difficulties together, and then subsidize fast charging through alliances to provide enterprises with more production impetus, achieve technology sharing, and reduce costs. While there is only one Tesla in the United States, there are numerous companies worldwide. The establishment of alliances and unified standards may compel Tesla to align with us and open up to us.