Written by Timensity
On January 28, CATL and Didi both announced that they would jointly establish a battery swap company, relying on the technical advantages and operational capabilities of both parties, to provide efficient battery swap services for many new energy vehicles from the online car-hailing scenario.
This year's battery swap industry is extremely lively. Before the official announcement of the cooperation between the two parties, NIO also reached a battery swap cooperation with Geely, so far NIO's partners have increased to four, and the other three are Changan, JAC and Chery. In 2023, BMW and Mercedes-Benz will form a joint venture to operate the supercharging network in the Chinese market.
For a long time, the efficiency of energy replenishment is an obstacle to the popularization of new energy vehicles, and the efficiency of battery replacement is higher than that of fast charging, which is theoretically the best means of energy replenishment for new energy vehicles, but it is limited by high construction costs and no unified standards, resulting in a low penetration rate. With the addition of many large manufacturers, the battery swap industry may be able to embark on a fast track of development.
There are several details of CATL's partnership with Didi that are worth noting.
First, the specifications are very high, Cheng Wei, chairman and CEO of Didi, and Zeng Yuqun, chairman and general manager of CATL, witnessed the signing.
Second, Didi's contracted entity is Xiaoju Energy, which is part of Didi's layout in the travel market, but its popularity in the market is not high. While officially announcing the cooperation, Didi also revealed several data of Xiaoju Energy: As of the end of December 2023, Xiaoju Energy's charging services have covered more than 190 cities, with a cumulative total of more than 6800 million times. This shows that Didi's business matrix built around the travel market will be a new focus for its future.
Third, both sides emphasized in their official announcements that they will lead the industry in terms of service and technical standards from the online car-hailing scenario.
Fourth, in addition to the establishment of a battery swap joint venture, the two sides will also cooperate in a wider range of new energy fields such as storage and charging.
Through the above four details, we can get a glimpse of the form and goal of the cooperation between the two sides.
First of all, it is natural to "take the online car-hailing scene as the starting point". Didi is the largest online car-hailing company in China, and has a scale advantage in online car-hailing, while the battery swap industry pays attention to economies of scale, and Didi's scale advantage is an indispensable part of battery swapping. As of November 2023, more than 3 million new energy vehicles have been registered on the Didi platform, accounting for more than 58% of the total mileage.
Secondly, before the two sides reached a cooperation, they actually had a layout in related fields, and the battery swap was just an extension.
Let's take a look at CATL first, as a leader in the power battery industry, its leading edge is shrinking. According to 2023, CATL's market share is 431%, declining for two consecutive years, and in 2021, its market share was as high as 521%, BYD, China Innovation Airlines, and EVE Lithium Energy's market share in 2023 will increase by more than 2 percentage points year-on-year. Therefore, it is not surprising that CATL will develop new businesses.
CATL's battery swap business started in the field of commercial vehicles. In July 2020, CATL released China's first commercial application scenario for battery swapping for heavy trucks. In June 2023, CATL released the brand Qiji battery swap for heavy trucks, including Qiji battery swap block, Qiji battery swap station and Qiji cloud platform.
In addition to commercial vehicles, CATL also launched Evogo, a battery swap service brand for the personal market in January 2022, which includes three major products: chocolate battery swapping blocks, quick swap stations and apps, which form Evogo's battery swap solution.
Chocolate battery swap blocks are suitable for A00, B and C class passenger cars and logistics vehicles, EVOgo can store 48 battery swap blocks in the battery swap station, the battery swap time is about 1 minute, as long as the model using chocolate battery swap blocks can use EVAGO's services.
However, CATL's battery swap business has encountered some resistance. Before cooperating with Didi, CATL had already begun to cooperate with third parties, but the OEMs it cooperated with were not very good.
Specifically, the company that has cooperated with CATL to swap batteries is DPCA, Aiways and FAW Besturn (the model is Besturn NAT), the highest sales of the three is DPCA, while it sold only 4,634 units in December last year, and Aiways has filed for bankruptcy. In other words, CATL has an advantage in batteries, but it lacks "leverage" in the terminal, and Didi is that leverage.
Looking at Didi again, it has long been looking for a second curve. For example, Didi has laid out autonomous driving and financial business, while Xiaoju Energy has Didi's layout in the energy field, which has covered Internet refueling, smart charging, enterprise services and other fields.
It can be seen that this cooperation is for both parties to take what they need, and it is also a group for warmth.
In 2024, the domestic sales of new energy vehicles are expected to reach 11.5 million, and while the main engine factory is conquering the city, the energy supplement system as a logistics is also developing rapidly, and there are naturally huge business opportunities. It is estimated that by 2025, the market size of China's electric vehicle battery swap industry is expected to reach 133.4 billion yuan.
There are two main forces in the battery swap market, namely OEMs and third-party platforms. OEMs include NIO, BAIC, etc., and third-party platforms include Aodong New Energy, State Grid, etc. At present, the largest is NIO, with a total of 3,567 battery swap stations in China by the end of 2023, of which 2,333 are in operation.
The price of NIO taking the first place is a huge amount of capital investment. According to the cost of a battery swap station revealed by Qin Lihong, president of NIO, about 3 million yuan, the investment in "building the station" alone is as high as 6.9 billion yuan.
Since it is so "expensive", why do NIO and CATL still choose to do battery replacement? This is because the battery swap mode has incomparable advantages.
At present, the main way of energy replenishment of new energy vehicles is charging, and it takes 30-40 minutes for fast charging to be fully charged, and the efficiency is not high. The efficiency of the battery swap mode can be on par with refueling, with the EVO battery swap time being about 1 minute, and the NIO third-generation battery swapping station being swapped within 5 minutes. The second is to reduce the cost of buying a car, taking NIO ES8 as an example, if you choose to separate the vehicle from electricity, you can reduce 70,000 yuan, which can lower the threshold for buying a car.
In addition, in battery swap mode, the battery is handed over to the battery operating company for management and maintenance, which can improve safety and extend the service life. Since the battery swap mode can independently adjust the battery charging time according to demand, it is conducive to reducing the pressure on the power grid.
In addition to the high cost, there is also a lack of unified industry standards, which are the main factors restricting the popularization of battery swapping.
NIO's choice is two-pronged. On the one hand, it continues to build battery swap stations, establish supply advantages, and begin to cooperate with other car companies to reduce cost pressure. On the other hand, the vehicle and electricity separation mode reduce the cost of car purchase, and at the same time lease the battery to a third party to reduce its own cost pressure.
Compared with NIO, CATL is a battery producer, so it can take advantage of production capacity to get a lower battery cost, and the problem is how to get enough demand so that the battery swap mode can work. Shen Fei, vice president of NIO, once said: As long as it can do 50-60 orders a day, the battery swap station will be able to break even. NIO currently has only 35-36 battery swaps per battery swap per day. Therefore, Didi is a patch that CATL has put on the demand side.
The problem of inconsistent standards has actually brought trouble to large manufacturers.
Geely, which recently reached a cooperation with Weilai on battery swapping, actually began to lay out battery swapping as early as 2016, which is partly responsible for Geely's Yiyi Internet, and the main body of Geely's cooperation with Weilai on battery swapping is also Yiyi Internet. At present, the models that can be serviced by the Yiyi Internet battery swap station are Geely's Cao Cao 60, Maple Leaf 80V, Maple Leaf 60S, Ruilan 9, etc. The battery swap standards of Yiyi Internet and NIO are different.
NIO uses water-cooled batteries, which need to be fixed by bolts, and Yiyi Internet uses air-cooled batteries, which need to be fixed by snaps, Cao Cao 60, Maple Leaf 80V and other models cannot be swapped in NIO battery swap stations, and NIO SE6 and ES8 cannot be swapped in Yiyi Interconnection's battery swap stations. This brings us to the question of standards, whose standards should be used as a unified standard in the cooperation between NIO and Geely?
If Geely's standards are used, Geely's high-end brands will not be able to provide convenient services in the short term, because the number of battery swap stations of Yiyi Internet is much smaller than that of Weilai, currently only 300+, and Weilai needs to change its own standards, and the early construction has become a bamboo basket for water. If NIO's standard is used, it is doubtful whether Geely will accept to give up the right to speak.
In contrast, Didi has already sold the business of making cars to Xpeng Motors, so it can ignore the issue of setting standards. However, CATL cannot ignore it, and this is especially true for other OEMs and third-party platforms. This can be said to be the most critical issue in the battery swap industry.
If the battery swap standards are different, the battery system structure of each car company is not uniform, and the battery swap station can only serve some models, which will reduce the overall efficiency of battery swapping. If the enterprise builds its own battery swap station, it will rebuild the wheel, which will not only waste resources, but also lead to insufficient density of the battery swap station, and it will be difficult for car owners to enjoy the convenience, which will restrict the promotion of the battery swap mode.
On the whole, cost, demand and standards all restrict the development and large-scale popularization of the battery swap industry, and they are also problems that need to be solved after CATL joins hands with Didi. As more and more large manufacturers join the battery swap, this will also be regarded as the number one problem, and when the standard problem is solved, the penetration rate of the battery swap mode will be further increased.