CHINA REPORT
FAW Jiefang and CATL have set up a joint venture company, Jiefang (Jilin) New Energy Technology Co., Ltd., to do business in the new energy segment. The company is wholly-owned by Jiefang shidai New Energy Technology Co., Ltd., which is a joint venture between FAW and CATL with each party holding 50% of the JV’s shares.
The JV was established to sell new energy vehicles, batteries, battery parts, and electric vehicle charging equipment charging stations; Information system integration services; and Intelligent control system integration. It also will manufacture power transmission and distribution and control equipment.
In August 2022, CATL reached a strategic cooperation agreement with FAW Jiefang, proposing to invest 500 million yuan to establish a subsidiary for cooperation. CATL’s battery business mainly focuses on the passenger car market, and the cooperation between the two sides marks the beginning of CATL’s in-depth launch into the new energy commercial vehicle market.
In June, Yutong Heavy Truck signed a five-year strategic cooperation agreement with CATL. The two sides will focus on the heavy truck mainline power exchange market, with the goal of “jointly building a brand with electric vehicles”.
In August, CATL and Shaanxi Automobile Group signed a 10-year strategic cooperation agreement, where the two sides will conduct comprehensive cooperation in product research and development, technological innovation, resource allocation, market promotion, and after-sales service.
Commercial vehicles are a huge and diversified market, and the electrification of commercial vehicles is one of the important trends in the global automotive industry transformation. In recent years, the new energy commercial vehicle market has performed outstandingly, showing a good situation of both market size and development quality improvement. The industry predicts that by 2030, the penetration rate of new energy scenarios for commercial vehicles in China will reach over 30%.
Source: Sohu Read The Article
PSR Analysis: The acceleration of electrification in areas such as urban logistics and distribution, environmental sanitation, waste soil, and concrete mixing transport vehicles in China has pushed traditional commercial vehicle companies to accelerate their electrification launches.
At the same time, the acceleration of electrification by new energy companies such as Sany, XCMG, and Yutong has brought new challenges to traditional commercial vehicle enterprises.
Since 2017, the cooperation between CATL and automotive companies has increased, and we’ve seen several joint ventures set up within this group. Today, CATL holds 50% of the domestic battery market.
Currently, the cost of power batteries accounts for 40% -60% of the total cost of an automobile. Consequently, car OEMs are working hard to develop alternative solutions. They are trying to develop batteries themselves, while also actively seeking alternative battery suppliers.
A second important strategy in the development of CATL is its launching of battery replacement products as part of its expansion into the commercial vehicle market.
Compared to the passenger car market, electrification in the commercial vehicle market is low, but electrification will continue to accelerate in the future. China’s commercial vehicle companies will continue to expand electrification and this process will be accompanied by accelerated industry integration. PSR
Jack Hao is Senior Research Manager – China for Power Systems Research
