1、Research on the securitization of electric vehicle charging network Duan Mengnuo State Grid Tianjin Economic Research Institute Abstract:The development of new energy vehicles is an important measure to solve the problem of environmental pollution and energy security in China.The maturity of chargin
2、g network infrastructure planning and construction is an important factor affecting the development of electric vehicle industry.The securitization of electric vehicle charging network provides a feasible financing scheme for the construction of the charging network.By injecting charging network ass
3、ets into a special purpose company established by the builder Special Purpose Vehicle(SPV),through underwriters issuing asset-backed securities in the capital market,to achieve asset securitization management,and through analyzing the risk of charging network asset securitization to build the invest
4、ment decision models,the investors can basically determine the securitization term and yield to maturity,so that to obtain low-cost liquidity funds and increase the speed of charging network construction.Keywords:electrical vehicles;charging network;asset securitization;investment decision model 0.I
5、ntroduction In recent years,the rapid development of the automobile industry and the rapid increase in the possession of fuel vehicles have posed severe challenges to Chinas environmental pollution and energy security.Electric vehicles can reduce the consumption of petroleum energy and the emission
6、of pollutants,which have received the attention of the government1.The vigorous development of electric vehicles has become an important measure to solve the problems of environmental pollution and energy security in China.However,despite the governments multi-faceted policy support,the development
7、of the electric vehicle industry is still not ideal.On one hand,due to the imperfect development of electric vehicle technology,on the other hand,the imperfect construction of the charging network infrastructure led to a serious lack of convenience for the use of electric vehicles,restricting the pr
8、omotion and application of electric vehicles2.1.Current status of electric vehicle charging network construction Under the combined effect of government policy support and the electric vehicle market prospects,the domestic charging network construction has been developed rapidly and entered a steady
9、 growth period from the introduction period,with a certain scale.The rapid development of the electric vehicle industry has attracted a number of Internet-related companies,technology companies,start-up companies,as well as social capital to intervene.It forms a system of state-owned,private,mixed o
10、wnership,which has stimulated the development of domestic charging infrastructures3.According to statistics from the China Electric Vehicle Charging Infrastructure Promotion Alliance(Charging Alliance),at the end of 2016,the construction and operation of public charging piles in China amounted to 14
11、1,000,a net increase of more than 2 times compared to 49,000 at the end of 20154.By September of 2017,the total number of construction and operation of public charging piles in China was 191,000,an increase of 44253 from the end of 2016,accounting for an increase of 35.2%.As of November 2017,the con
12、struction and operation of public charging piles totaled 205,000 in China.As of December 2017,China had built and operated a total of 214,000 public charging piles,with an average month-on-month growth rate of 4.1%and an annual growth rate of 51.8%.In terms of geography,as of December 2017,the top t
13、en publicly-charged piles within the domestic provincial administrative regions respectively were Beijing,Guangdong,Shanghai,Jiangsu,Shandong,Anhui,Hebei,Zhejiang,Tianjin,and Hubei.The number and ranking of charging piles in the provincial administrative regions and their specific details are shown
14、in figure 1.2018 China International Conference on Electricity Distribution Tianjin,17-19 Sep.2018CICED2018 Paper No.201805270000003 Page1/6 296 Figure 1:The diagram of TOP10 number of charging piles in Chinas provincial administrative areas ranks From the corporate point of view,the number of charg
15、ing piles built by TGOOD300001,State Grid,Wanbang,China Potevio,etc.ranks in the forefront of the industry,while the number of private charging piles for Star Charge,SAIC,BYD,Zhejiang Wanma,and Zhuhai Yilian are among the highest front.The top four public charging infrastructure operators account fo
16、r 86 percent of the nations total charging infrastructure.The number and proportion of charging piles operated by Chinese charging pile infrastructure enterprises in 2017 are detailed in table 1.Table 1:The number and proportion of charging piles operated by charging infrastructure enterprises in Ch
17、ina in 2017 Enterprise TGOOD 300001 State Grid Star Charge China Potevio SAIC BYD Zhejiang Wanma CSG Zhuhai Yilian Balance Power others Number(a)97559 42304 28521 14660 7025 4640 4293 2118 1915 1848 33353 Proportion(%)40.95 17.76 11.97 6.15 2.95 1.95 1.8 0.89 0.8 0.78 14 Considering the limitation o
18、f the charging time of electric vehicles,although the number of domestic charging piles has begun to take shape,the number of charging piles is still difficult to meet the large-scale use promotion of electric vehicles compared with the domestic vehicle holdings of 310 million vehicles.At the same t
19、ime,the imperfect construction of charging network infrastructure has also restricted the promotion of electric vehicles.2.Commercial model of electric vehicle charging network The model of charging network business camp is mainly composed of the government led mode,the enterprise leading mode and t
20、he government+enterprise model.The infrastructure attributes of the charging network determine the necessity of government participation,and the potential business prospects of the charging network have been paid attention to by the enterprises.However,because the development of new energy vehicle i
21、s at the initial stage,the profitability of the charging station is poor,and the profit outlook is uncertain,which weakens the enthusiasm of investment,which in turn restricts the development of new energy vehicle.The traditional way of raising funds for construction is generally to use its own fund
22、s and commercial bank loans,and the construction party has assumed greater financial pressure.In the government and social capital cooperation(PPP)model,due to the poor profitability of charging stations at the current stage,the prospects for profitability are not clear,and it is difficult to determ
23、ine the time limit for investment recovery.It is difficult to accurately calculate the time limit for authorized business operations,resulting in low enthusiasm for social capital participation5.Emerging models such as the crowd-funding model,as well as the pile networking model,little money was rai
24、sed,together with small construction scale,the uniform construction standards,it is difficult to form a complete charging network.The securitization of the charging network provides a feasible solution to solve this problem.The asset securitization is the process of decomposing and reorganizing the
25、assets risk and income factors,through the certain structural arrangement of assets that lack liquidity but can BeijingGuangdongShanghaiJiangsuShandongAnhui HebeiZhejiangTianjin HubeiDecember 2016(a)21940 21108 16444 15869 12340 6756 7307 5246 6782 4266September 2017(a)26990 26340 23516 20417 16210
26、9495 9258 7804 8626 5557December 2017(a)30363 29262 26314 22075 17557 9909 9875 9866 9788 6214Growth from the same year(%)138.39 138.63 160.02 139.11 142.28 146.67 135.14 188.07 144.32 145.66020406080100120140160180200050001000015000200002500030000350002018 China International Conference on Electric
27、ity Distribution Tianjin,17-19 Sep.2018CICED2018 Paper No.201805270000003 Page2/6 297generate cash flow,and then convert into assets that can be circulated on the financial market.Asset securitization helps to maintain and enhance the companys own borrowing capacity,reduce financing costs,improve as
28、set and liability management,and increase the return on assets.For investors,asset securitization mainly enables investors to obtain a new type of investment tool,which can bring higher investment returns,obtain greater liquidity,reduce the risk of investment,and break through investment restriction
29、s.Supported by charging network assets future earnings,credit enhancement,issuing negotiable securities on the capital market,make the enterprise get lower cost of liquidity,charging network can support enterprise into scale construction,promote the development of electric vehicles.Investors in the
30、capital market can obtain fixed income by holding securities or reinvest in the secondary market according to their risk preference,so as to maximize their own interests6-7.3.The implementation plan Charging network asset securitization Asset securitization is the process of credit rating and credit
31、 evaluation,the process of issuing asset-backed securities by reorganizing the income and risk of the assets and risk.The specific process of the rechargeable network asset securitization is shown in figure 2.Sinopec GroupGovernmentThe state gridCNPCAuto manufacturerleaderdominatorShareholdersshareh
32、oldersSPVCharge Network CompanyCredit enhancementCredit ratingSecurities issuanceasset injectionsecuritizationfunds paymentConstruction of Charging Ntwork AssetsFormation of SPV Asset ManagementOthers Figure 2:Schematic diagram of asset securitization of electric vehicle charging network 3.1 Constru
33、ction of charging network assets The construction of Chinas charging network involves the interests of the State Grid Corporation of China,automobile manufacturers,and petrochemical companies such as Petro China and Sinopec.In the process of constructing the charging network assets,the State Grid Co
34、rporation of China is in a proactive position due to its own business attributes;the petroleum petrochemical industry companies have a better distribution network within cities and between cities.If the construction of charging stations does not require large-scale land acquisition,it also has certa
35、in advantages;while the selection of vehicle power batteries and the design of charging interfaces by automobile manufacturers directly affect the efficiency of charging station operations.At the same time,the charging network has a certain infrastructure property,which is of great significance for
36、solving the problems of environmental pollution and energy security in China.Therefore,it is necessary for the government to take participate in the construction of charging networks.On the one hand,the relevant government departments have the role of coordinating and guiding the charging network pl
37、anning approval and standardization.On the other hand,the government can mediate the contradiction between the participants in charge network construction and coordinate the interests of all parties,thus making the charging network construction efficiently and orderly.The construction of the chargin
38、g network through market competition will inevitably lead to the irrationality of the construction of the charging network.Only by coordinating the interests of all parties in the society,unifying the construction standards,and making overall plans can the construction be carried out economically an
39、d rationally,and a relatively complete charging network can be formed quickly.In summary,leaded by the government and led by the State Grid Corporation of China,the State Grid Corporation of China,automobile manufacturers,oil companies and petrochemical companies and other social parties will invest
40、 in holding shares and set up a charging network company to carry charging network assets.Subsequently,under the charge of the construction of the charging network company,according to geographical location,regional charging network is divided into different geographical locations,and the regional c
41、harging network construction is carried out in batches.When the charging network construction in a 2018 China International Conference on Electricity Distribution Tianjin,17-19 Sep.2018CICED2018 Paper No.201805270000003 Page3/6 298certain area is completed and the operating conditions are met,the ch
42、arging network company can determine the target of asset securitization according to its own needs,and determine the proportion of charging network assets in the region that implements asset securitization.3.2 Formation of special purpose company(SPV)SPV is an independent agency that aims at asset s
43、ecuritization.After receiving investors investment in securities,the SPV will pay the funds to the original equity person charging network company of the regional charging network assets.After the SPV receives the investment proceeds from the purchase of securities by the investor,it pays the funds
44、to the original equity person charging network company of the regional charging network assets.After the completion of the SPV,the charging network company will inject the regional charging assets into SPV by selling or transferring.The regional charging network assets management rights and proceeds
45、 disposal rights belong to the special purpose company(SPV)to ensure that the charging network assets in the region are independent of the charging network.When the charging network company goes bankrupt,the company operates,and the charged network assets that have been injected into the SPV do not
46、participate in bankruptcy liquidation as legal assets,thereby realizing the purpose of bankruptcy and isolation of the charging network assets in securitized areas.The charging network companys own operating conditions no longer affect the operation of regional charging networks that have been subje
47、ct to asset securitization,protecting the interests of securities investors.3.3 Credit enhancement and credit evaluation Asset securitization takes the future income of assets as the guarantee for issuing securities,and whether investors investment interests can be effectively guaranteed to receive
48、the credit guarantee of securitized assets.The default,default and debt repayment risk of securitized assets constitute the credit risk and liquidity risk of securitized assets.SPV can choose credit enhancement institutions with good credit standing to reduce or eliminate the risk factors of asset s
49、ecuritization in the forms of guarantee,guarantee and insurance,so as to improve the credit rating of assets.The SPV can also use the method of overcollateralization to conduct the internal credit enhancement of assets,thus saving the expenses paid to credit enhancement institutions.After the credit
50、 enhancement,the regional charging network assets will get a higher credit rating,through an authoritative credit rating agency for credit evaluation,so that the issued securities are easily accepted by investors.3.4 Issuance of securities Regional rechargeable network assets after credit enhancemen