NaaS Q3 Financial Results: Pioneering Profitability in the EV EraChina’s new energy vehicle (NEV) market is hitting its stride this year. Since July, monthly retail sales of NEV passenger cars have consistently outpaced gasoline cars, with NEVs’ penetration rates in total new vehicle sales exceeding 50% for four consecutive months. This signals a major turning point: NEVs are becoming the norm, while traditional gasoline cars are fading into the minority. For the charging services industry, this could mark the beginning of a new chapter in profitability.
NEVs Drive Charging Demand as Penetration Soars
As NEV adoption grows, their share of the national vehicle fleet has also risen. By mid-2024, NEVs made up 7.18% of all vehicles in China, according to data from Ministry of Public Security. This surge has spurred rapid growth in charging infrastructure. The National Energy Administration reported that by September 2024, China had 3.329 million public charging facilities, an increase of 603,000 in just nine months.
However, the growth in infrastructure has not fully addressed key challenges. Public charging facilities often suffer from inefficiencies in matching supply with demand, leading to low utilization rates. This not only affects consumers but also puts pressure on the profitability of charging station operators.
AI-powered solutions have emerged as a critical tool to tackle these challenges by optimizing supply-demand dynamics. AI-empowered companies with advanced data troves, like NaaS Technology Inc. (NASDAQ: NAAS), are really well-positioned. NaaS’s recently released Q3 2024 financial report offers valuable insights into this transformation.
I.Historic Opportunities as the NEV Market Expands
China’s NEV market is still in a period of explosive growth. According to the China Association of Automobile Manufacturers, NEV production surpassed 10 million units annually for the first time this year, making China the first country to achieve this milestone. Experts predict production could exceed 12 million units by year-end. Looking ahead, McKinsey estimates that by 2030, NEVs could account for nearly 70% of passenger car sales in China.
As NEVs become a household staple, the demand for charging infrastructure will continue to grow. Between January and September this year, electric vehicle charging volumes reached 66.67 billion kWh, up 12.4% year-on-year, according to the National Energy Administration.
Public charging stations are becoming increasingly essential, particularly in urban areas where installing private chargers is often impractical due to grid constraints, lack of fixed parking spaces, or resistance from property management. This contrasts with markets such as Europe, where private chargers dominate.
Recognizing the importance of public charging infrastructure, China has introduced a series of policies to accelerate its development. For example, a 2022 State Council guideline aims to establish a high-quality charging network by 2030. More recently, the 2024–2027 "Action Plan for Building a New Power System" was introduced to further support the sector. The government is fully backing the transformation.
These policies have significantly boosted public charging infrastructure, creating opportunities for charging operators to scale and commercialize. However, with an 8:1 ratio of NEVs to public chargers as of Q3 2024, the gap between supply and demand remains a key challenge but also a major opportunity.
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