On the 31st, Phihong Technology, a leading electric vehicle (EV) charging station manufacturer, held a corporate presentation where Zerova Technology’s Chairman, Lin Fei-hong, shared insights. Two years ago, Phihong’s revenue was around NT$300 million, but thanks to the significant demand for charging stations in the EV market, annual revenue has grown by 5-6 times. Lin believes the EV market is only in its early stages, with EV penetration rates in Europe still below 10%, highlighting substantial market potential. Since 2022, considered the inaugural year of the EV era, Zerova was spun off as an independent entity from Phihong’s EV energy division less than six months ago. Lin emphasized, “We (Zerova) will carve our path” as Zerova continues expanding its footprint in the electric vehicle industry.
Phihong’s outlook for 2023 focuses on its wholly-owned subsidiary Zerova, dedicated to the EV and charging station sectors. Zerova CFO Lee Yi-hao reported that shipments doubled in the latter half of 2022, with continuous profit improvements anticipated over the coming years. Zerova’s revenue contribution has increased annually, accounting for about 2.6% in 2021, rising to 13.4% in 2022, totaling around NT$1.87 billion. Compared to 2021’s revenue of just NT$320 million, this represents significant growth, with 2022 marking an operational break-even point.
Regarding Phihong and Zerova’s business strategy, Lee stated that Phihong is entering a transformation phase, aiming to continue this transition over the next 2-3 years. Phihong and Zerova will employ different strategies for traditional power and EV-related businesses. Phihong plans to reposition its business model, focusing on high-margin, low-volume, high-variety products, gradually reducing the share of consumer electronics, and optimizing its customer and product portfolio. For Zerova, Lin indicated an expansion into key markets, including the U.S., Europe, Japan, the Middle East, and Africa.
According to DIGITIMES Research, the International Energy Agency (IEA) statistics indicate that global EV sales reached 16.5 million units in 2021, up 61% from 2020. The number of public charging stations worldwide grew from 1.3 million in 2020 to 1.75 million in 2021, an increase of only 35%, reflecting the immense growth potential of the global charging station market.
In terms of product composition, the market reported that AC slow-charging stations accounted for approximately 20-25% of Zerova’s total output in 2022, while DC fast-charging stations accounted for 70-80%. AC units have a gross margin of around 20-30%, with DC units at over 30%.Furthermore, with a surge in EV orders from automakers driving rapid growth in charging stations, Zerova is set to commence Phase 2 expansion in Tainan. While current production capacity is sufficient for the next two years, Lee mentioned the possibility of a third plant based on future demand.
On the overseas front, as Zerova’s operations expand, Phihong will continue transitioning its power-related businesses over the next 2-3 years, enhancing capacity in Taiwan and Vietnam, consolidating its existing China operations, and gradually exiting the consumer power supply market. Lin Yang-hong noted plans to merge Phihong’s two factories in Dongguan, China, with part of the capacity being relocated to Vietnam to save costs and reduce management expenses.
Phihong, founded initially on consumer power products, has faced significant pricing competition from Chinese firms. Phihong stated that it will continue adjusting its product mix and client composition, moving toward a low-volume, high-variety production model focused on specialized products.
Source: Digitimes
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