Charging Your Electric Car is Becoming More Expensive in China
In China, the world’s largest electric vehicle market, part of the appeal of EVs is the supposedly lower cost of running an EV compared to a traditional gasoline vehicle. However, recent price hikes at public charging stations mean that this might no longer hold true.
According to several domestic media reports, prices at public charging stations in several cities, including Shanghai, Zhengzhou, Qingdao, and Chongqing, have increased significantly over the past month — rising up to 87% in some places.
In Shanghai, company chauffeur Lu Xiafei told Sixth Tone that prices at public charging stations operated by the State Grid have recently increased from around 1 yuan ($0.13) per kilowatt hour to around 1.5 yuan in urban areas and 2 yuan in suburban areas.
Electric vehicle experts attribute the price increases to a policy change that came into effect on June 1, when the government began classifying electricity consumption of large charging stations as “industrial” use. In China, “industrial” electricity incurs higher pricing compared to electricity used for “residential” purposes.
As temperatures and demand for electricity have risen, authorities have struggled to meet energy demands in recent years, particularly during the hot summer months.
The policy change hits those who rely on public charging stations the hardest, such as taxi and ride-hailing drivers. Lu has been avoiding using public charging stations since the recent price increase, relying more on his private charging station at home instead.
China’s public charging station market is highly concentrated, with the top 15 operators such as TELD and the State Grid providing up to 93.8% of charging stations in the country, according to data from an industry group.
The market is going through consolidation as most of these operators are operating at a loss, Zhang Xiang, a visiting professor at the engineering department of Huanghe Science and Technology University in Henan province, explained. Prices either have to rise or companies will fold, he said.
China has more than 6 million electric charging stations nationwide. According to state media Xinhua News, 33% are public.
“The impact of such price hikes is far-reaching, because it may potentially drive users who see electric cars as an economical option back to gas-powered cars,” said Zhang.
Despite the recent price increase, Zhang believes the government will roll out measures to reduce prices soon in order to maintain its broad commitment to carbon emissions reduction.
The government ended its 13-year-long policy of subsidizing purchases of new energy vehicles at the end of last year.
Additional reporting: Li Xinran; editor: Vincent Chow.
(Header image: VCG)