CATL-Didi JV targets EVs with battery swap

The electric vehicle market is experiencing a shift with the separation of vehicles and batteries becoming more prevalent. This took a major step forward with the establishment of a battery swap joint venture between battery giant CATL and domestic ride-hailing leader Didi last week.

The joint venture, with a registered capital of 330 million yuan ($45.38 million), sees CATL holding a 69.7 percent stake and Didi the remaining share. It will focus on selling battery swapping facilities, operating EV charging infrastructure, leasing batteries, providing energy storage services, and selling batteries and components.

CATL, which supplies one-third of the world's EV batteries, ventured into battery swapping three years ago with the launch of its EVOGO battery-swapping services. However, the development was hindered by nonstandardized EV batteries.

In December, CATL introduced the Chocolate Battery Swap solution, featuring two standardized battery modules suitable for various vehicles with ambitions to build 1,000 swap stations by the end of 2025, expanding to 10,000 in the mid-term and eventually 30,000.

Additionally, CATL has joined hands with automakers including Changan, GAC, BAIC, Wuling and FAW to launch 10 battery swap vehicle models, which will start rolling out by the end of this year.

According to Zeng Yuqun, founder of CATL, the market for EV power replenishment will be divided among three main methods: battery swapping, home charging and public charging.

With the advancement of CATL's collaboration with Didi, CATL's vision for its battery swapping business is gradually becoming a reality.

Experts say that standardizing batteries via ride-hailing platforms offers a new growth opportunity.

They note that battery swapping for ride-hailing vehicles is easier to standardize and promote, focusing mainly on business to business cooperation. In contrast, for private passenger cars, challenges include consumer acceptance and communication between users and companies.

By November 2023, more than 3 million NEVs were registered on the Didi platform, which ran more than 58 percent of total mileage. Given the high mileage and frequent charging needs of ride-hailing vehicles, battery swapping emerges as an optimal solution for drivers.

The partnership between CATL and Didi is expected to minimize downtime and enhance efficiency for ride-hailing drivers, potentially reshaping the car-hailing market, experts say.

In addition to its ride-hailing business, as of December 2024, Didi's Xiaoju Charging platform has deployed more than 60,000 supercharging piles across more than 3,300 charging stations nationwide.

This platform has served more than 23 million NEV owners, delivering approximately 24.5 billion kilowatt-hours of electricity, and covers more than 240 cities across China, showing that Didi has accumulated substantial experience and infrastructure in the charging ecosystem.

The current battery swap market is mainly led by Chinese EV startup Nio, which sells battery-swapping models and has set up around 3,100 such stations nationwide.

The company has also reached agreements with automakers including Changan, Geely and Chery on battery swapping, but there has been no substantial progress in these partnerships.

With NEVs sales continuing to grow in recent years, securities are optimistic about the battery swapping sector. CITIC Securities forecasts that there will be 22,000 battery swapping stations in China by 2027, with 14,000 for passenger vehicles and 8,000 for commercial vehicles.

Kaiyuan Securities predicts that the market size of China's battery swapping industry chain is expected to reach 133.4 billion yuan by 2025. Meanwhile, Oriental Securities forecasts that domestic battery-swapping EV models are expected to reach 30 percent of total EV models by 2025.