Good News on Listing | Frost & Sullivan Assists XCHG Limited in Successful US Listing (NASDAQ:XCH)

XCHG Limited (stock code: NASDAQ:XCH) successfully listed on NASDAQ on September 10, 2024, Beijing time. The company is a global leader in new energy vehicle charging solutions, significantly improving the charging efficiency of new energy vehicles by combining proprietary fast charging and energy storage technologies with supporting services, and unlocking the value of energy storage and management. Frost & Sullivan (Frost & Sullivan, hereinafter referred to as 'Frost & Sullivan') provided exclusive industry advisory services for XCHG Limited's listing in the United States, and hereby warmly congratulate them on their successful listing.

Investment highlights

Overview of New Energy Vehicle Markets in Europe and the United States

Europe and the United States are the two core markets for new energy vehicle sales globally. Among them, Europe has stood out in the market due to favorable policies such as supporting local equipment manufacturers' development and electrification transformation strategies. In 2023, the European new energy vehicle market sold approximately 3 million vehicles, accounting for about 20.5% of the global market share, making it the world's second-largest new energy vehicle market. By 2028, European new energy vehicle sales are expected to reach about 6.7 million vehicles, with an annual compound growth rate of 15.4% between 2024 and 2028. Meanwhile, the US new energy vehicle market is rapidly narrowing its gap with Europe, mainly driven by continuous progress in intelligent driving technology and infrastructure upgrades. US new energy vehicle sales are expected to increase from about 1.8 million vehicles in 2024 to about 4.2 million vehicles in 2028, with an estimated annual compound growth rate of 23.6%.

Global Overview of DC Fast Charging Piles and Energy Storage Piles Markets

The continuous growth of the global new energy vehicle market has led to a significant increase in demand for new energy vehicle charging piles. DC fast chargers have become the preferred choice for charging point operators (CPOs) and new energy vehicle owners. DC fast chargers have higher average output power and can typically provide faster charging speeds, better operational efficiency, and greater cost-effectiveness. Therefore, the global installation volume of DC fast chargers is expected to increase significantly from about 2.7 million units in 2024 to about 10.7 million units in 2028, with an annual compound growth rate of 41.8%.

In 2023, although DC fast chargers only accounted for about 35% of the total installed capacity of public new energy vehicle charging stations, their energy demand accounted for more than 70% of the global new energy vehicle energy replenishment needs. The global energy demand for DC fast chargers is expected to increase from about 12 TWh in 2023 to about 58 TWh in 2030, with an annual compound growth rate of about 25.1%.

In recent years, European countries have actively promoted the growth of the new energy vehicle market and the construction of charging infrastructure through various measures and incentive policies. As a result, the installation volume of DC fast chargers is expected to increase from about 195,000 units in 2024 to about 7.95 billion units in 2028, with an annual compound growth rate of 42.1%. Similarly, governments in the United States and Canada are also modernizing aging power grid infrastructure and fostering the expansion of the DC fast charger market to meet the growing demand for new energy vehicle charging. In North America, the market installed base of DC fast chargers was about 85,600 units in 2024 and is expected to reach about 346,300 units by 2028.

Energy storage charging piles support seamless and efficient grid operation through peak shaving and valley filling, offering significant advantages. They will play a more critical role in balancing power supply and demand, making them increasingly important for energy management. In addition, energy storage charging piles have many other advantages, such as reducing the requirements for grid infrastructure and providing bidirectional charging capabilities, which can significantly accelerate deployment time and reduce installation costs. Therefore, these advantages improve their Return on Investment (ROI) and expand the revenue opportunities for CPOs.

Energy storage charging piles are expected to receive an enthusiastic response from CPOs and new energy vehicle consumers due to their outstanding performance and cost-effectiveness. The global sales volume of energy storage charging piles is projected to increase from about 9,000 units in 2024 to about 290,000 units in 2028, with an annual compound growth rate of up to 138.3%.

Overview of the global new energy vehicle charging piles and energy storage charging pile markets

In recent years, the global sales of new energy vehicles have seen unprecedented growth, leading to an increased demand for charging stations for new energy vehicles. Currently, mainstream charging stations for new energy vehicles include AC slow charging stations, DC fast charging stations, and energy storage charging stations.

AC slow-speed charging piles are currently the most common type of new energy vehicle charging piles and are typically used for home charging scenarios. They use alternating current (AC) power, with average output powers ranging from 7 kilowatts to 21 kilowatts. AC slow-speed charging piles belong to low-speed charging piles and can charge new energy vehicles up to 4-10 hours after installation, depending on the battery capacity of the new energy vehicle and the average output power of the charging pile.

DC fast charging piles are high-speed charging stations that use direct current (DC) to charge the batteries of new energy vehicles. The average output power of DC fast charging piles ranges from 22 kilowatts to 360 kilowatts, and they have shorter charging times, making them an ideal choice for public charging stations. The widespread application of new energy vehicles has increased demand for electricity, putting pressure on power supply and the power grid. Although DC fast charging piles provide faster charging speeds for new energy vehicles, their deployment also presents certain challenges, potentially requiring the upgrading of old power grid facilities to support their higher electricity demand.

Energy storage charging piles are high-power charging piles equipped with battery packs capable of storing electrical energy. Energy storage charging piles are built on the basis of DC fast charging piles, designed to address common installation and operational challenges such as unstable power supply and demand as well as complex grid upgrades. Energy storage charging piles have unique advantages such as efficient charging and flexible deployment. Since there is no need for site modification or upgrading, installation is relatively simple.

Energy storage charging piles can be divided into two categories based on their structure: integrated charging piles and split charging piles. Integrated energy storage charging piles integrate all components into a single unit, while split charging piles integrate energy storage and charging components into multiple parts.

Development Trends and Driving Factors of New Energy Vehicle Charging Piles and Energy Storage Charging Piles Globally

· The surge in global demand for new energy vehicles has driven growth in charging infrastructure:

In recent years, the global new energy vehicle market has experienced significant growth, mainly driven by various factors such as increased environmental awareness, government regulations promoting new energy vehicles, technological progress, and improvements in charging infrastructure. It is expected that this growth trend will continue, leading to a surge in demand for charging infrastructure. The introduction of the European 'Fit for 55' legislation reflects the region's emphasis on energy conservation and emission reduction. The plan sets high targets for emissions in the region and encourages traditional automakers to shift their focus from internal combustion vehicles to new energy vehicles. This transformation has created numerous opportunities for the expansion of European charging infrastructure. As one of the world's important new energy vehicle markets, the United States has great potential for the development of charging infrastructure. The Biden administration has taken an active and proactive stance towards the new energy vehicle industry, setting long-term development goals. The Biden administration's plan includes establishing a nationwide network of charging stations, providing economic incentives for purchasing new energy vehicles, and supporting automakers and suppliers to promote the transition to new energy vehicles.

·  Imbalance between new energy vehicles and charging piles:

The ratio of new energy vehicles to charging stations is an important indicator for evaluating the progress of new energy vehicle charging infrastructure and understanding the supply and demand dynamics of new energy vehicle charging stations. In Europe, the new energy vehicle market has achieved rapid growth due to the setting of 'carbon emission' targets and the increasing environmental awareness of consumers. However, in 2023, the ratio of new energy vehicles to charging stations in Europe was about 13:1, indicating an imbalance in the supply and demand of new energy vehicle charging stations. To support the growing new energy vehicle market and achieve the 'carbon neutrality' goal by 2050, the EU calls on European countries and regions to actively strengthen local charging infrastructure construction. Similarly, in 2023, the average ratio of new energy vehicles to charging stations in the United States was about 25:1. This unbalanced ratio can be attributed to differences in economic development across regions and the sales volume of new energy vehicles nationwide. The US government has recognized the importance of meeting the growing demand for new energy vehicle charging and has prioritized investment in the new energy vehicle industry and infrastructure construction to help reduce the ratio of new energy vehicles to charging stations.

· >The demand for DC fast charging piles is growing continuously:

As consumers' demand for new energy vehicles surges, there is an increasing need for fast charging technology to overcome the limitations of current battery technology and provide fast charging solutions. Fast charging technology can shorten charging times, which is particularly important for individuals traveling or for enterprises that rely on vehicle transportation. To meet the charging needs of new energy vehicle owners, especially in cities with limited charging facilities, government departments and private companies are actively investing in developing DC fast charging infrastructure. This infrastructure plays a crucial role in supporting the expansion of the new energy vehicle market by providing convenient charging options. Due to predictable driving routes and high energy demand, commercial fleet owners (such as those operating buses) have a strong demand for fast charging technology. DC fast charging stations can effectively solve the problem of long charging times without increasing battery capacity. For CPOs, extended charging times reduce the return on investment per charging station. Therefore, developing fast charging stations can not only improve the return on investment for CPOs but also stimulate further investment in charging infrastructure. The number of global public DC fast charging stations has increased from 300,000 in 2019 to 1.6 million in 2023.

competitive landscape

According to Frost & Sullivan's data, the competition in the European direct current fast charging pile market is fierce and fragmented in 2023. Based on sales volume in 2023, XCharge is one of the leading high-power charging solution providers in Europe.

XCharge is one of the earliest companies in the world to focus on developing energy storage charging piles. In April 2022, XCharge successfully launched its independently developed product, the NZS energy storage charging pile, which is also one of only a few energy storage charging piles on sale globally to date. Compared to similar products, the NZS energy storage charging pile has superior performance such as large battery capacity, high charging efficiency, good resistance to extreme environments, and long service life. In addition, the NZS energy storage charging pile is also one of the first new energy vehicle charging pile products in the world to offer bidirectional charging services.

Frost & Sullivan has extensive research experience in the automotive and transportation industries, assisting well-known companies in successfully accessing the capital market. Successful listings include: Xirui Aircraft (2507.HK), Didi Chuxing (2559.HK), ZK.NYSE (Jiakr), Zhihang Automobile (1274.HK), Lüyuan Group (2451.HK), Noco-noco (NASDAQ: NCNC), VinFast (NASDAQ:VFS), Shengshi Dalian (NASDAQ:SDA), Youpinche (NASDAQ:UCAR), HSAI.NASDAQ (Heshai Technology), ECX.NASDAQ (Yikatong Technology), Buyang International (2457.HK), NWTN.NASDAQ (New York Transportation Network), Zhongxin Hangkong (3931.HK), Leapmotor (9863.HK), DBS Tianxia (2418.HK), Kuaidog Taxi (2246.HK), NIO (NIO.SGX), NIO (9866.HK), Canggang Railway (2169.HK), YGMZ (Yanjiang Mingzhu) (NASDAQ), Asia Express (8620.HK), InfinityL&T (1442.HK), TOMOHOLDINGS (6928.HK), EH.NASDAQ (Yihang Intelligent), Aodima (8418.HK), Xiangxing International (8157.HK), CIMC Vehicles (1839.HK), Xunlong (1930.HK), CSSC Leasing (3877.HK), Chengdu Expressway (1785.HK), Tianrui Automotive Interior (6162.HK), Baren Holdings (2885.HK), Huazi International (2258.HK), Pulin Chengshan (1809.HK), NIO (NIO.NYSE), Wanlida (8482.HK), Qilu Expressway (1576.HK), Yingheng Technology (1760.HK), Asia Industry (1737.HK), Ruifeng Power (2025.HK), Gaomeng Technology (8065.HK), Hebei Yichen (1596.HK), Zhengli Holdings (8283.HK), Junao Holdings (8035.HK), Yadi Group (1585.HK), Yihai Car Rental (EHIC.NYSE), Xincheng Power (1148.HK), Zhengxing Wheels (ZX.NYSE), Shuanghua Holdings (1241.HK), Changfeng Axle (1039.HK), Black Sesame Intelligence (2533.HK), AZI.US (Zhongchi Chefu).