By Lihui Xu and Jochen Alleyne

SGT Research

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The debate started last year, when State Grid Corporation of China (SGCC) and China Southern Power Grid (CSG) together announced that their EV charging strategy is to focus on battery swapping mode instead of charging mode.

This argument immediately caused a controversy in China’s industry that continues today.

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The power grids argue that by using swapping mode, customers only need to drive into a swapping station with a nearly exhausted battery and drive out within five minutes with a freshly charged one. The recharging station will centralize battery charging during the off-peak time of the power grid and then distribute fully recharged batteries to swapping stations.

SGCC named this business model the Smart Charging Service Network. Battery replacement is the principal means of powering vehicles, and plug-in charging is supplemental.

However, the opposing automakers say that the swapping mode has safety issues due to the current lack of unified technological standards for making batteries. If battery specifications are different, it would be impossible for the swapping station to replace all types of batteries safely for diverse car brands.

Gasoline suppliers like Sinopec and PetroChina also oppose swapping mode. They wish to build EV recharging stations just beside existing gas stations. They refer to this model as the Refueling Recharging Integration Station.

Both groups of objectors are concerned about a monopoly in the battery charging network by the state owned power grids.

Superficially, the dispute of these two modes is a fight over EV charging operation methods, but digging deeper will reveal it is a dispute of interests. The industry players are competing to control the power of the EV’s battery charging network in China.

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Such players include four giant Chinese central enterprises - State Grid Corporation of China, China Southern Power Grid, Sinopec and PetroChina - who were all quick to join the fight for the EV charging station market in China.