China’s Electric Vehicle Charging Star

Charging stations will be a huge business with stable, recurring income in the age of EVs, and Star Charge is positioning itself to be the leader in China.

Star Charge (星星充电) is a Changzhou-based integrated solution provider for electric vehicle (EV) charging. It focuses on charging technologies for automobile companies.

The company’s charging solutions for EVs include large parking lot-like charging centers and smaller individual charging stations in residential complexes. According to statistics from the China Electric Vehicle Charging Infrastructure Promotion Alliance (EVCIPA), as at August 2020 China had a total of 1.38 million charging stations. Of these, 139,000 are operated by Star Charge, which puts it in second place with a market share of about 10%.

The company also claims to have over one million active private users and 100 plus corporate clients. Its website says that its clients include renowned international brands, such as Jaguar, Land Rover, Hyundai Motor, and domestic enterprises such as BYD and BAIC.

In September 2020, the company announced that it raised 855 million yuan (US$131 million) in a Series A round of financing, with a rumored valuation of 8.2 billion yuan (US$1.26 billion). The round was jointly led by French global energy and automation solutions developer Schneider Electric and a subsidiary fund of CICC Capital. Morgan Stanley was the financial adviser for the transaction.

Faster and more intelligent

The company was founded by Shao Danwei in 2014. According to her ‘Chairman’s Message’ on its website, third party data company Talkingdata ranked it as the most popular and frequently used charging operator by new energy vehicle owners.

She also emphasized in her message that Star Charge has been profitable for three consecutive years. She summed up the secret of their success with these words — “faster and more intelligent”.

Star Charge has a proprietary 500kw charging station which is capable of charging an electric car in 10 minutes. The company also said that its 180kw fast charging station, which has been in operation since 2019, is able to meet the development of China’s domestic charging needs based on actual usage experience.

According to Shao, Star Charge’s technology also enables it to use less manpower and operate more efficiently to save operating costs.

Rival companies for Star Charge in China include Qingdao TGood Electric Co. (which operates the TELD brand with 166,000 charging stations) and the state-owned electricity provider State Grid (in 3rd place with 100,000 stations). Other competitors include YKCNN.com (47,000), EV Power (25,000), Anyo Charging (20,000), Potevio (14,000) and CEGN (14,000).

Charging ahead

In October 2020, the company issued a circular announcing that it intends to list its holding company — Wanbang Digital Energy Co. (万帮数字能源股份有限公司) — in mainland China, and hired domestic broker Guotai Junan Securities Co. as its financial adviser.

Ms. Shao said in a speech that she believes China will experience big structural transformations in energy production, transportation, and consumption over the next 5–10 years. Like many other countries, EVs will become a crucial part of this transformation as governments around the world tackle climate change and carbon emissions.

Along with this trend, battery charging stations will be the bridge between transportation and energy. This will be a new industry that will experience strong growth even though most of the limelight is on electric car manufacturers right now.

Land grab

A big advantage of Star Charge is that it has close relationships with automobile companies because founder Shao used to work for automobile dealers. The company has already achieved partnerships with 59 automobile companies.

Besides car makers, Star Charge also has strategic relationships with 74 of the biggest real estate developers in China, as well as data partnerships with over 200 companies.

Notwithstanding, Star Charge is still actively looking for more business partners. It has introduced a few ways for partners to work with it directly. The company is looking for sales agents for its charging stations and seeking representatives for different cities. The company is particularly interested in collaborating with companies involved in parking lot operations, logistics parks and the car-sharing industry.

In addition, it also wants to partner with those who have land resources or capital to build new charging stations - rather than try and build everything itself. This tactic certainly make sense. Electric charging stations will completely replace gas stations as traditional combustion engine vehicles get phased out.

Such service stations are usually established for long periods of time and do not easily get displaced by competition if the location is attractive enough for users. Whoever grabs the most territory in tandem with the spread of vehicle adoption will effectively establish the service network and user base needed to capture the market for the long haul.