"Zero-Cost" EV Charging Stations? The Hidden Traps Behind No-Barrier Offers

"In the capital market, when you can hear people on the street talking about making money from stocks, and even shoeshiners are recommending stocks, it is often the most dangerous time in the market." This is a quote from Charles Mackay in "Extraordinary Popular Delusions and the Madness of Crowds."

This passage describes that when the entry barriers of an industry begin to open up to the general public, the true period of dividends has already passed.

In recent years, driven by the "dual carbon" strategy and market demand, the penetration rate of new energy vehicles has increased year by year, leading to a surge in demand for charging stations.

The market is filled with eye-catching investment projects boasting "zero-cost construction of charging stations," and such sensational "get rich locally" gimmicks have indeed attracted wave after wave of people.

However, after the franchisee raised funds and invested them, the anticipated returns did not materialize as expected, but instead fell into a new whirlpool.

1. High demand drives the emergence of new business formats, with policy benefits and chaotic investment promotion coexisting.

"With the country's new infrastructure initiative, we missed out on gas stations—we can't afford to miss out on charging stations."

The demand for charging stations also serves as a policy indicator. In 2023, the state issued the policy guidance document titled "Guiding Opinions of the General Office of the State Council on Further Building a High-Quality Charging Infrastructure System."

The document explicitly proposes to "promote the shared transformation of private charging piles" and "explore efficient shared models for multiple vehicles per pile" to address the structural contradictions in charging infrastructure. According to the latest statistics from the China Electric Vehicle Charging Infrastructure Promotion Alliance, the current idle rate of private charging piles nationwide is as high as 76%. The "Jinbole" model can increase the average number of vehicles served per pile per day by more than three times, generating income for pile owners while easing the pressure on public charging facilities.

In the first half of 2025 (January to June) alone, the number of newly added charging infrastructure in China nearly doubled year-on-year. Specific data shows that during this period, 3.282 million new charging facilities were added, representing a year-on-year increase of 99.2%.

At the very beginning of entering the market, charging station franchises leveraged the core of scarcity marketing, portraying franchise opportunities as fleeting and hard to come by. Some even went so far as to showcase the lucrative effects of joining the franchise through personal testimonials on media platforms.

Some agents say: "With just a little over 100,000 RMB, you can buy the agency rights for a certain district or county. The company will help you choose the location, the charging pile utilization rate is as high as 70%, and installation is free of charge. There is no need for any subsequent operation or maintenance—you can just stay at home, wait for dividends, and make money effortlessly."

Mr. Zhou, a charging pile investment agent interviewed by Electric Vehicle Resources, refuted by saying, "Building charging piles is the same as building gas stations. For residential areas, you need the consent of the property management. Even after the property management agrees, approvals from the power bureau and fire department are required, various approvals. You might think it's just placing a cabinet there, but building a charging station is even more complicated, involving the planning bureau, urban construction bureau, fire department, land approval, and power bureau. Constructing a charging stations is as complex as building a gas station, with complicated procedures, and it’s not something just anyone can do."

"Those agents outside brag about things like no barriers and zero-cost franchising, but the real barriers actually appear after signing the contract and implementing it."

Firstly, the so-called "free franchise" is actually just a pretense. Although investors do not need to pay direct fees for setting up a site, they often have to bear various other costs under different names, such as equipment procurement fees, technical service fees, management fees, etc. When combined, these costs are not much less than the cost of setting up a site on their own.

Moreover, when it comes to equipment procurement, investors often have no choice, especially for franchisees who cooperate to build stations on their own sites. Contracts stipulate that equipment must be purchased from brands and at prices designated by certain suppliers. Charging piles that cost around 30,000 yuan on the market are sold to franchisees at 40,000 yuan. Not only is the equipment price usually higher than the market average, but the engineering costs are also non-transparent and are often quoted at inflated prices.

When the charging station has already been built and it becomes difficult to continue investing in the later stages, franchisees are unable to easily exit. At this point, the franchise fee turns into a fleeting admission ticket, pocketed by unscrupulous agents.

2. The Dispute Over Points is the Overlooked Truth of Profitability

The rise of charging stations is an accurate reflection of the current imbalance between vehicles and charging piles in the new energy vehicle industry, but in the multi-party scramble, there is actually a hidden law of location monopoly.

The emerging franchise model for charging stations tends to favor asset-light operations, but the core profitability issue for charging stations remains idle capacity, which is closely related to location.

Location refers to the position of the charging pile, and site selection almost determines the potential profitability of the charging station.

In major commercial areas of the city, leading companies have long completed the acquisition of premium locations. High-frequency charging areas such as commercial zones, high-end communities, and transportation hubs have been secured by giants like State Grid and Teld through long-term agreements.

The small and medium-sized franchisees often receive locations in suburban industrial areas and remote towns with low traffic, where the average daily usage rate is less than 15%, forming a stark contrast to the promised "over 70%".

The marginal locations already have limited traffic and are further pressured by fuel vehicles occupying spaces, equipment failures, and electricity price competition. EV Resources contacted a franchisee in Shenzhen and learned that a charging station with 20 charging piles was built in an urban village. Due to its proximity to residential areas, not only are fuel vehicles long-term occupying charging spots, but other charging stations are also competing for market share. The actual utilization rate is less than 30%, resulting in a monthly loss.

This also indicates that charging operators need to pay close attention to charging stations within a 5-kilometer radius. If there are already many charging stations within this range, the competition will inevitably be fierce, making it very challenging to make money in such a competitive environment.

Secondly, the attributes of the land play a decisive role in site selection. The property's ownership must be clear to avoid disputes arising from ownership issues during later operations. Additionally, the usage term of the site should not be too short; generally, a minimum of five years is required, with 8-10 years being ideal. This ensures the full lifecycle value of the power station can be maximized.

In July last year, the Nanwan Subdistrict in Longgang District, Shenzhen City, dismantled a charging station that occupied state-owned reserved land due to illegal land use, covering an area of up to 300 square meters.

Charging station operation is a battle for location resources, not a competition for equipment coverage. Once premium locations are divided up, low utilization in marginal areas is destined to become a field for exploiting franchisees.

3. The industry is highly competitive, and entering it requires caution.

In recent years, although the revenue of the charging pile industry has been increasing annually, the overall growth of the industry is gradually slowing down.

Take the example of "charging station leader" Zhidacharge Technology. Despite maintaining a leading position in the global and domestic charging station market share, relevant data indicates that Zhidacharge Technology is currently facing declining revenue, continuous profit losses, and a cash flow debt crisis.

In this situation, Zhida Technology's gross profit margin plummeted from 20.4% in 2022 to 14.9% in 2024. Although it slightly recovered to 16.5% in the first quarter of 2025, it remains significantly lower than the industry average of 25%-30%. Continuing losses, negative net operating cash flow, rising debt levels, and a debt-to-asset ratio as high as 900.3% all pose challenges to the sustainable operation of Zhida Technology. This situation also indirectly reflects that the development of the charging pile industry is not smooth sailing and might impact franchise businesses relying on similar cooperation models.

The concentration of the charging pile industry is rapidly increasing, compressing the survival space for small and medium-sized players. Data from the first half of 2025 shows that the top 15 operators in the industry, such as Teld, Star Charge, and Cloud Quick Charge, occupy 85.1% of the national public charging pile market share, with a significant head effect. Moreover, the charging networks in first-tier cities and core business districts are approaching saturation.

Small and medium-sized operators are generally facing profitability difficulties due to issues such as aging equipment, high maintenance costs, and insufficient user traffic. For instance, Monster Charging franchisees have encountered collective lawsuits in many regions due to problems such as revenue gaps after equipment installation and the brand's withdrawal from the market. Small and medium-sized franchisees, lacking technical and resource support, have become the primary bearers of pressure.

The charging industry has gradually shifted from a land-grabbing expansion model to a more intensive cultivation approach, which might also serve as a period of reevaluation for franchisees eager to enter the market.

4. Conclusion

To establish a foothold in the wave of new energy, investors must first shed any impulsiveness and anchor themselves with rational coordinates amidst the fervent market signals. It is important to understand that there is no "get-rich-quick myth," and thorough field research is essential to identify truly fertile grounds for growth.

This is not a short sprint for quick money, but a long-distance race testing vision and endurance. Any fantasies of short-term windfalls will eventually face reality amidst approval barriers, locational competition, and industry reshuffling.