China, the world's largest electric vehicle market, is experiencing fierce competition over battery charging methods. To dramatically reduce charging times, which are the biggest barrier to electric vehicle adoption, electric vehicle corporation BYD has unveiled technology that allows for a 5-minute charge to drive 400 kilometers. Meanwhile, battery corporation CATL and electric vehicle corporation NIO have decided to expand facilities and vehicles that can exchange batteries in under 3 minutes. As both sides engage in fierce competition over industry standards, China's battery charging market is expected to develop rapidly.
According to the Chinese economic media outlet Caixin on the 20th, on the 17th, China's largest battery corporation CATL and electric vehicle company NIO (Chinese name Weilai) signed a strategic cooperation agreement to jointly establish the world's largest electric passenger vehicle battery exchange network. CATL will invest 2.5 billion yuan (about 500 billion won) in NIO Energy, a subsidiary of NIO responsible for battery charging solutions. Additionally, CATL's exchangeable electric vehicle battery product 'Choco' will be installed in NIO's low-cost compact car brand 'Firefly.' Choco is designed in the shape of a chocolate bar and will be installed in 1 to 3 units depending on the size of the electric vehicle.
CATL and NIO are actively promoting the battery exchange method to shorten electric vehicle charging times to that of refueling internal combustion engine vehicles. According to NIO, the time required for a battery exchange is just 3 minutes. NIO claims that particularly in combination with its autonomous driving system, if a vehicle is parked near an exchange station, it will autonomously enter the station, making this method more convenient than refueling. As of this day, NIO has established 3,182 battery exchange stations across China, and the total number of exchanges has surpassed 68.9 million. They plan to establish battery exchange stations in 27 provinces and 2,300 county-level cities by the end of June this year.
The trend for electric vehicle battery exchange is expanding. Earlier, CATL announced plans to cooperate with Chang'an Automobile, Guangzhou Automobile, Beijing Automotive, and Geely to jointly launch battery exchange models. Their aim is industry standardization. An automotive industry analyst noted, "Both sides (CATL and NIO) will jointly promote the national standardization of battery exchange technology and will compete for influence within the industry," he told Caixin.
In particular, the accelerated pace of CATL and NIO in the battery exchange business has been analyzed to be related to the recent announcement by BYD regarding its ultra-fast charging technology. BYD announced on the 17th that it will launch the 'Super e-platform,' which allows charging at 1,000 kW and secures a driving range of 400 kilometers with a 5-minute charge. Currently, most fast chargers output around 350 kW, and Tesla's upcoming supercharger is only 500 kW. BYD plans to apply the new charging technology to electric vehicles 'Han L' and 'Tang L,' which will be released next month in China. For this, they plan to install over 4,000 charging facilities across the country.
An industry analyst stated, "From CATL's perspective, empowering the battery exchange ecosystem serves as a defense against BYD's recent ultra-fast charging technology," and added, "The success of cooperation with NIO will determine whether the battery exchange method can become mainstream in the industry and reshape the global electric vehicle market." Chinese tech media outlet 36kr also reported that as BYD launched its disruptive ultra-fast charging technology, voices saying 'battery exchange will disappear' began to gain momentum in the industry.
BYD produces batteries in-house to equip its electric vehicles and other models. Although CATL ranked first in the global battery market outside of China as of January with a 28.5% market share, BYD's leadership in the global electric vehicle market poses a considerable threat to CATL. BYD's current global market share stands at 5.8%.
As competition intensifies between ultra-fast charging and battery exchange methods in the electric vehicle battery sector, forecasts suggest that the overall charging infrastructure will develop rapidly. The Chinese economic media outlet Financial World reported, "Thanks to continuous investment and the deployment of charging stations, the charging and exchange infrastructure firmly guarantees and provides momentum for the high-quality development of China's new energy vehicle industry," adding, "The charging and exchange infrastructure boom is reshaping the ecosystem of new energy vehicles and rewriting the global energy map."