Catl and Nio are Doing Battery Swapping, Teammates or Rivals?

 

NIO has brought Huawei into the "Battery Swap Alliance"!

 

On July 17, Gasgoo learned that NIO Energy and Huawei Hongmeng Intelligent Driving officially announced a charging service cooperation.

 

According to the agreement, starting from July 17, Hongmeng Intelligent Driving users can find and use NIO Energy charging piles nationwide through Hongmeng Intelligent Driving App, AITO App, and Wenjie, Zhijie, and Xiangjie car machines, and the charging experience and efficiency will be fully upgraded.

 

Gasgoo observed that since November 2023, NIO has officially announced a battery swapping cooperation with Huawei Hongmeng Intelligent Driving, Changan Automobile, Geely Automobile, Chery Automobile, JAC Group, Lotus, GAC Group, and China FAW. The scale of its battery swapping camp is growing.

 

At the same time, in addition to NIO, CATL, an equally eye-catching "giant" company in the power battery industry, is also focusing on the layout of the construction of new energy vehicle energy replenishment infrastructure.

 

One is a car company, and the other is a power battery company. What kind of subtle relationship do they have in the battery swap industry? Who will be able to hold on until the last moment when the industry dividend breaks out completely?

 

What are their "trump cards"?

 

Compared with Weilai, CATL really "openly" announced its entry into the battery swap business relatively late.

 

In 2021, CATL wholly-owned Times Electric Service Technology Co., Ltd., and released the battery swap service brand EVOGO in January 2022, officially entering the battery swap market.

 

At that time, the solution given by CATL was a modular battery with high degree of freedom and flexible matching of different endurance requirements. Because the appearance of each battery block is similar to chocolate, it is named "Chocolate Swap Battery Block".

 

After launching the battery swap brand, CATL began to promote the construction of the battery swap ecosystem, and signed the EVOGO battery swap brand cooperation framework agreement with car companies such as FAW Bestune, Dongfeng Peugeot Citroen Automobile, and Ai Chi.

 

According to public information, as of now, CATL's battery swap business covers cities including Xiamen, Quanzhou, Hefei, Guiyang, Fuzhou and other cities. The number of its battery swap stations is very limited. Among them, Xiamen, which has better operations, has only 12 battery swap stations in use.

 

In contrast, NIO's battery swap business has covered 240 prefecture-level cities across the country. In China, NIO has deployed a total of 2,443 battery swap stations, including 809 high-speed battery swap stations, 3,904 charging stations, and 22,822 charging piles. In overseas markets, NIO has deployed a total of 50 battery swap stations and 19 charging stations in five European countries, including Norway, Germany, Denmark, Sweden, and the Netherlands, and connected to more than 600,000 third-party piles.

 

Starting this year, CATL's battery swap business has truly entered the "fast lane".

 

In addition to the aforementioned participation of BAIC and GAC Aion, at the beginning of this year, CATL also established a joint venture with Didi to explore the promotion of battery swap models in the online car-hailing market.

 

It must be admitted that although it entered the market later than NIO, CATL, as a leading company in the power battery industry, still has its own unique advantages.

 

From a technical point of view, the "Chocolate Battery Swap" adopts CATL's CTP technology, with a weight energy density of more than 160Wh/kg and a volume energy density of more than 325Wh/L. A single battery can provide a range of about 200 kilometers, and one or more batteries can be selected according to actual needs, so as to achieve a higher range and adapt to 80% of the models developed on the pure electric platform that have been launched in the world and will be launched in the next three years.

 

In terms of power battery installation, according to data released by the China Automotive Industry Association, the cumulative domestic power battery installation in the first half of 2024 reached 203.3GWh, an increase of 33.7% year-on-year. During this period, CATL ranked first with an installation volume of 93.31GWh, with a market share of 46.38%. ‌

 

From the perspective of price, CATL's battery swap business adopts a rental model. The minimum monthly rent for a single battery is 399 yuan, and the battery swap fee is calculated separately, which is more cost-effective than gasoline-powered cars.

 

But for NIO, the company is also exploring its own business model.

 

It is reported that it launched the battery rental service BaaS as early as 2020, starting the car-battery separation sales model.

 

This sales model separates the car and the battery, which is equivalent to disassembling the car and selling it, selling the car to consumers, and selling the battery to an asset management company, which then rents the battery to consumers. The advantage of doing this is that it lowers the price threshold for car purchases to promote sales, and can also provide users with a better car purchase experience and improve brand reputation.

 

More importantly, NIO is committed to building a new energy vehicle ecosystem, and car sales, charging and swapping services, used cars, battery leasing, battery recycling, etc. are all important links in building a new energy vehicle ecosystem. NIO's improvement of battery rental services is one step closer to a complete new energy ecosystem.

 

Competitor? Or win-win?

 

So, are NIO and CATL, which each has its own strengths and weaknesses in the field of new energy vehicle battery replacement business, enemies or friends?

 

In Gasgoo's view, judging from the current growth trend of the new energy vehicle battery replacement market, it may be too early to judge the competitive relationship between the two companies that have taken the lead in layout.

 

But it is clear that NIO and CATL are both "taking what they need" in the layout of battery replacement business, and each has its own "business philosophy".

 

Some people say that CATL develops battery replacement business to increase power battery sales, and NIO supports the battery replacement model to improve new energy vehicles.

 

This statement may be true.

 

Judging from the installed capacity of power batteries of CATL in the past two years, although its position as the industry leader has been stable for many years, it can still be seen that Fudi Battery is "eyeing" below it. In addition, the demand for cost control by car companies is becoming stronger. While CATL is launching a "price war" for power batteries, it also needs to find multiple "growth curves" to make up for this revenue loss.

 

After all, CATL's biggest source of revenue is power battery sales. If all new energy vehicle companies choose the battery swap model (battery leasing), the number of power batteries required will inevitably increase, which is beneficial to CATL's power battery sales.

 

NIO needs no further explanation. If it wants to "survive" in the increasingly competitive new energy vehicle market, the monthly sales of more than 20,000 vehicles are obviously not enough.

 

In short, the battery swap model alleviates the charging anxiety of new energy vehicle owners and stimulates consumption by potential car buyers, which is good for NIO. At the same time, battery swap stations need to reserve more batteries, which is good for CATL. This is a business that is good for both companies.

 

In addition, it should be mentioned that at present, the markets faced by CATL and NIO in the field of new energy vehicle battery swap seem to be slightly different.

 

As mentioned above, in addition to establishing a joint venture with Didi to explore battery swap models in the online car-hailing market, it is reported that CATL has also reached a cooperation with FAW Bestune. The two parties will take the lead in promoting the battery swap model in operating scenarios such as rental and online car-hailing with the help of the Bestune NAT model.

 

In other words, CATL is more hopeful to gradually penetrate the C-end new energy vehicle replenishment market by exerting efforts in the B-end market.

 

NIO is different.

 

It is reported that NIO's battery swap network currently has two systems planned, one is a battery swap network exclusively for NIO users, which is mainly for NIO's mid-to-high-end models, and the other is a battery swap network built with partners for multi-brand sharing, which is mainly for the mass market and includes operating vehicles.

 

At present, NIO's battery swap network is still based on the first system, and the second system has just begun to be built, and it cannot yet constitute a direct competitive relationship with CATL.

 

As Tong Zongqi, deputy secretary-general of the Charging and Swapping Branch of the China Association of Automobile Manufacturers, said in an interview with relevant media: The two are not yet in a competitive relationship.

 

He pointed out that the main markets for NIO and CATL's battery swap are not the same. CATL's battery swap is currently based on online car-hailing and taxis on the To B side, which can be seen from its partner companies Didi, GAC Aion, and BAIC Group.

 

According to relevant media reports, the above-mentioned industry insiders also said that CATL is targeting the mass car market equipped with small-capacity battery packs. In terms of the investment logic of battery swapping, it is easier to achieve profitability by starting from the B-end with a higher battery swapping rate. In terms of the construction of battery swapping stations, it is also to cover the region first, and then cover the whole country from point to surface. It will not build large-scale battery swapping stations across the country at the beginning.

 

 

On the eve of dawn, who can wait for the dawn?

 

However, the problem facing the battery swapping business of new energy vehicles now is that it is not yet time to discuss "who will go and who will stay" among the players in this track, but who can persist and wait until the "prosperity" comes before the market potential has exploded on a large scale.

 

Persistence and waiting are by no means easy. Especially for Weilai.

 

Just in early July, the industry's two-party discussion on who can master the discourse power of the energy replenishment market between battery swapping and supercharging was staged again.

 

According to Gasgoo, on July 10, Weilai Vice President Shen Fei posted a Weibo saying: "Don't speak easily in areas you are not familiar with, otherwise there is a high probability that experts will become experts. This is what he repeatedly emphasized when the host of the artificial intelligence conference invited a Tsinghua professor to speak a few days ago, and I deeply agree with it."

 

Industry insiders believe that this statement is suspected to be a response to Huawei Terminal BG CTO Li Xiaolong's remarks on battery swapping. And from his relevant remarks, it can be seen that Li Xiaolong does not seem to agree with battery swapping technology.

 

As we all know, since the self-replenishing energy market has been seen to have growth potential, it has been common for the above two parties to hold different views on battery swapping and supercharging, including Tesla, BYD and Xiaopeng Motors. In the final analysis, most people in the industry criticize battery swapping because it costs too much money.

 

Take Weilai as an example. The financial report shows that in 2023, Weilai achieved a total revenue of 55.62 billion yuan, a year-on-year increase of 12.9%; the full-year net loss further expanded by 43.5% to 20.72 billion yuan.

 

According to the data disclosed by Shen Fei: "The break-even line of Weilai's battery swap station is about 50 to 60 orders a day. At present, the average daily order volume of Weilai's battery swap station is 35 to 36 orders. More car brands need to join to reduce losses."

In addition, from a technical point of view, the contradiction between supercharging and the power grid is also difficult to resolve in a short time.

 

For example, in the new energy vehicle industry today, products such as 800V supercharging models and 4C and above fast charging batteries continue to emerge, but the change of high-power current will make the fluctuation amplitude of the power grid larger and larger, and the impact on the power grid will be greater, and the load fluctuation will be more severe. This requires the configuration of energy storage or the construction of integrated photovoltaic storage and charging stations to support and balance the load fluctuation caused by supercharging models. ‌

 

In addition, it will take time to unify the standards of the battery swap industry.

 

Tong Zongqi said that unifying the battery swap industry into one standard will greatly reduce costs, but it will be difficult to achieve in reality. "In the future, there are more likely to be 2 to 3 standards, such as one standard for NIO and another for CATL. Taking smartphones as an example, there are currently two to three different standards for operating systems and charging interfaces, which can coexist."

 

The above factors are not achieved overnight, and they all require time and money to wait.

 

It is an undeniable fact that, judging from the current revenue and net profit of NIO and CATL, it seems that CATL has more capital to "wait".

 

But what we still expect to see is that NIO, which seems to be "all or nothing" and going all out, can wait for a battery replacement future that can "take the lead" despite some pessimistic voices.

 

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