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CATL is Promoting a New Business Model in the New Energy Auto Industry
COVID-19 and China
Autos. Image Credit: afif kusuma / Unsplash

CATL has announced a collaboration with NIO (蔚来汽车), Guotai Juan Securities (国泰君安证券) and Hubei Science Technology Investment Group (湖北省科技投资集团) to set up a new firm named Hubei Weineng (湖北蔚能), promoting a new business model involving the separation between the car design and electricity (车电分离) in the new energy auto industry. Based on this new model, they also aim to promote the BaaS (电池租用服务) function.

As CATL has said, the mode of separating car and electricity is beneficial to building up an ecosystem, lowering the purchasing costs and providing more convenient financial services. In order to promote the new business model, the firm isCis putting 3.3 billion towards R&D, setting up an innovation lab named 21C. This investment will help to improve the firm’s R&D expense ratio from the first quarter of 2020, which was negatively affected by COVID-19.

The new energy auto industry is largely encouraged by China’s new policies supporting the real economy through finance. Hence, Hubei Weineng will likely develop faster in the future, as the ratio of separating cars and electricity will gradually increase. According to Guotai Juan Securities, the sales volume of new energy cars will increase to 25% in 2025, reaching 6 million. Moreover, the charging pile market will surpass one hundred million from 2020 to 2025.

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