Friday, April 12, 2024

CATL reportedly pushing for ‘CATL Inside’ model to regain influence in EV sector

BusinessCATL reportedly pushing for 'CATL Inside' model to regain influence in EV sector

In order to get automakers to accept the “CATL Inside” logo on their vehicles, CATL will offer some concessions like Intel did with its “Intel inside” model, according to local media.

Chinese power battery giant Contemporary Amperex Technology Co Ltd (CATL, SHE: 300750) is reportedly trying to push forward a so-called “CATL Inside” model, as the influence of battery firms in the automotive industry chain is rapidly declining.

CATL is kicking off a comprehensive strategy to reach out to ordinary consumers, marked by a push to build both offline and online communication channels, 36kr said.

The company plans to open its first offline brand display store in August, which will be located in Chengdu, Sichuan province in southwest China, the report said, citing a person familiar with the matter.

CATL will build a new energy life plaza covering an area of about 15,000 square meters, according to the report.

The purpose of the store will be to display a full range of “CATL Inside” models, which are expected to cover more than 50 models from more than 20 automakers, with more than 150 vehicles on display, the report said.

CATL will also join hands with automakers to market its “CATL Inside” models at auto shows in various cities to help expose and sell them, said a person familiar with the matter.

Apart from offline stores, CATL will also launch online communication.

CATL will start live-streaming on Douyin, a Chinese short-video platform, in April, and will interact with executives from the carmaker in these live-streams, 36kr said, citing a person familiar with the matter.

The company currently has 373,000 followers and 77 entries on Douyin.

In August 2023, CATL spent RMB tens of millions for its first offline launch event since its founding, inviting hundreds of media to attend, a rarity in the low-key battery industry, the report noted.

After the event, CATL began its outdoor advertising campaign, with displays of advertisements about CATL’s batteries being able to gain 400 kilometers of range with a 10-minute charge visible in Beijing, Shanghai, Hangzhou, and Xiaoshan.

CATL aims to cover outdoor ads in major airports across the country and all provincial and municipal high-speed rail stations, 36kr said, citing a person familiar with the matter.

The shifts come at a time when CATL’s voice has been declining rapidly over the past two years.

From 2018 to 2021, there was huge demand for CATL’s batteries from almost every carmaker in the world, and they need to figure out how to get enough supply.

However, CATL’s voice was gradually declining in 2022-2023, as smaller battery makers expand capacity and improve product quality, and as the industry started to see overcapacity.

Power battery makers are being reduced to ordinary car company supply chain companies, and CATL’s battery prices have been decreasing, the report noted.

Since 2023, CATL has been vigorously promoting Shenxing Battery to carmakers, however, some carmaker sources said they could use the battery but would not pay for its development.

Shenxing Battery is a Lithium Iron Phosphate (LFP) chemistry-based battery released by CATL on August 16, 2023, which supports ultra-fast charging.

Vehicles equipped with the battery can get 400 kilometers of range on a 10-minute charge and is the world’s first LFP battery to support 4C charging, CATL said last August.

The “CATL Inside” strategy is somewhat similar to Intel’s “Intel Inside” launched in 1991. Vendors who accepted “Intel Inside” on their products were offered rebates of up to 5 percent, which helped the slogan quickly appear on a large number of equipment vendors, the 36kr report noted.

CATL is starting down the same path, looking to have models that use its battery products emblazoned with the “CATL Inside” logo to let consumers know that the vehicles they’re buying are powered by CATL batteries, which are superior in quality and performance, according to the report.

In order for automakers to accept the “CATL Inside” logo on their vehicles, CATL will also make concessions like Intel, according to the report.

Specific terms of cooperation are still under negotiation, and it also has to do with where the logo will be printed on the car body, the report said, citing an automaker source.

For carmakers, partnering with CATL is a good option to help secure supply and boost sales, the report said, adding that some carmakers or models that don’t have an edge in the price war may consider accepting “CATL Inside.

The challenge for CATL, however, is that many automakers are looking to build their own technology profiles, with Nio (NYSE: NIO), Huawei, and Geely, for example, building battery development teams.

At the same time, it’s also questionable whether carmakers, desperate for cost control, are willing to help CATL build its brand image and then pay a sourcing premium for the latter’s brand, the report noted.

CATL’s power battery installations in China amounted to 9.82 GWh in February, placing it in first place with a 55.16 percent share, up 5.75 percentage points from January’s 49.41 percent share, according to the China Automotive Battery Innovation Alliance (CABIA).

This article was first published by Phate Zhang on CnEVPost, a website focusing on new energy vehicle news from China.

CnEVPost is a website focused on the coverage of the new energy vehicle industry in China. As with our original intent for CnTechPost, there are a lot of interesting things happening in the Chinese EV industry every day, but they are not covered by the mainstream English language media. We're here to keep track of what's happening in the Chinese EV industry and strive to be the first to publish what we see in English.