Tesla Supplier CATL Sets Up Battery Swap Business Overseas

CATL is the world’s largest maker and supplier of electric vehicle batteries to the likes of Tesla and Ford.

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A senior executive told CNBC, the world’s largest electric car battery maker, that it is evaluating whether to expand its battery swap business to international markets.

CATL, or Contemporary Amperex Technology Company Limited, is a supplier to companies such as Tesla and Ford.

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In January, the Chinese battery manufacturer launched its own battery exchange business called EVOGO in China in 10 cities. The goal is to remove the need for electric cars to stop at recharging stations. Alternatively, drivers can rent battery packs from CATL and put them in the car when their other battery runs out. This takes a few minutes.

Nio, an electric vehicle startup in China, has a competing battery swap program. Nio co-founder Chen Lihong told Reuters this week that the company plans to expand that to build 1,000 battery replacement stations outside of China by 2025, most of them in Europe.

The company is also evaluating the expansion of the battery swap product in Europe, Li Xiaoning, CEO of offshore commercial applications at CATL, told CNBC in an interview Thursday.

“I would say this will start in China this year. We will check step by step the external footprint of EVOGO,” Lee said.

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“We have started evaluating potential cooperation with several partners. We need to understand the details in practice,” he added. “There are many things we keep in mind. Product technology is one thing, the other is feasibility study, regulations, local rules, and also other factors that we need to consider as well.”

If CATL expands its business overseas, it could help foreign automakers offer battery replacement services to customers without having to build expensive infrastructure themselves.

CATL faces challenges, including the high cost of raw materials such as the lithium that goes into its batteries.

But the company managed to more than double its second-quarter profit as demand for electric vehicles continued to grow.

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