CATL Targets Another Billion-Dollar Market
Operational costs are reduced by 30%.
This is a calculation shared by Gao Huan, CTO of the Commercial Vehicle Business Unit of Contemporary Amperex Technology Co., Limited (CATL), at the launch event of the heavy commercial vehicle series battery on November 25th.
Unlike passenger vehicles, commercial vehicles are for B2B scenarios with high price sensitivity. CATL has used this series of battery products on the Yulong Copper Mine's wide-body mining trucks, which do not need to be charged for a week, thereby saving 30% of operational costs.
In July last year, CATL launched its first commercial vehicle battery brand - Tianxing. To date, CATL has successively introduced Tianxing L-Super Charging Edition, Long Endurance Edition, and Tianxing B-Bus Edition in the logistics and public transportation sectors. With the launch of four versions of batteries for heavy trucks, CATL has completed the last piece of the puzzle for commercial vehicle batteries.
As a relatively hidden market in the new energy vehicle market, the electrification of commercial vehicles started early but lagged far behind passenger vehicles for a long time. Especially in the heavy truck market, with its relatively small scale and high entry barriers, it has not been a focus of new energy attention.
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CATL's choice to enter the market now has a tempting reason behind it: According to data from Soochow Securities, domestic new energy heavy truck sales reached 34,000 units in 2023, a year-on-year increase of 36%, with the electrification rate rising to 5.6%. It is expected that the sales of electric heavy trucks in 2024 will reach 74,000 units, a year-on-year increase of 116%, and the penetration rate will rise to 8%-9%.
New Trend in the Billion-Dollar Market
According to power types, new energy heavy trucks can be divided into three types: pure electric, fuel cell, and hybrid. In terms of sales, pure electric heavy trucks undoubtedly hold a monopoly position.
According to terminal registration data, from January to May 2024, the cumulative sales of new energy heavy trucks reached 20,740 units, with pure electric heavy trucks accounting for 94.74%.
Although pure electric heavy trucks are rapidly penetrating, in terms of application scenarios, compared to diesel and natural gas vehicles, the application scenarios of electric heavy trucks are still relatively narrow.
The application scenarios for heavy trucks are divided into tractors (express logistics, trunk line transportation, daily necessities, coal transportation, etc.), dump trucks (urban waste, mining dump, highway dump, etc.), cargo trucks (green passage, refrigeration, daily use, etc.), and special vehicles (concrete mixers, pump trucks, sedan transporters, dangerous goods transport vehicles, etc.).
According to a report from Soochow Securities, in 2023, the sales of electric tractors reached 19,000 units, accounting for more than 50%.
If electric heavy trucks are to usher in a boom, their application scenarios need to be expanded to compete with traditional fuel vehicles in the market, rather than being confined to a corner.
Once the application scenarios of electric heavy trucks become broader and more complex, the demand for high-capacity electric heavy trucks will also increase. After all, under the same scenario and permitted conditions, high-capacity pure electric heavy trucks have more energy storage and longer driving ranges, which can reduce the frequency of recharging during the operation of electric heavy trucks.
Previously, the mainstream energy capacity of electric heavy trucks was 282kwh and 350kwh, with a driving range of 200km-300km. Limited by driving range and public facilities, they were mainly suitable for closed parks and urban logistics and other low-speed scenarios.
According to the latest terminal registration information, from January to May this year, the sales proportion of charging heavy trucks with an energy capacity of more than 400kwh accounted for 55%, higher than the proportion from January to April this year (52.8%).
This requires the improvement of key technical indicators such as battery energy density and reducing the threshold for users to purchase high-capacity electric heavy trucks.
Four Versions, Each with a Focus
Targeting different application scenarios and needs of heavy trucks, CATL has launched four versions: Super Charging Edition, Long Life Edition, Long Endurance Edition, and High Strength Edition. The focus of each battery can be clearly seen from the names of different versions.
The Super Charging Edition battery focuses on recharging speed, with a peak 4C supercharging capability, recharging 70% in 15 minutes. A core part of the operating cost of heavy trucks is labor wages, and operational efficiency is an important factor in the profitability of heavy trucks. In short-distance scenarios such as mining transportation and waste soil mixing, using the Super Charging Edition battery can significantly reduce the charging time of electric heavy trucks.
Gao Huan took a dump truck with a one-way transportation of 30km as an example. A vehicle with a 1C standard charging battery can run an average of 5 trips per day, but a vehicle using the Tianxing heavy commercial vehicle Super Charging Edition can run 1-2 more trips.
The Long Life Edition battery is suitable for high-energy consumption scenarios such as heavy load and medium to long-distance transportation, which require frequent charging and discharging, putting pressure on battery decay.
This battery has a lifespan of 15 years and 3 million kilometers, and also supports the battery swapping mode. Gao Huan called it "chargeable, swappable, upgradable, rentable, salable, and repurchaseable" at the scene.
In June last year, CATL launched a heavy truck chassis battery swapping solution - Qiji Swapping, which consists of three parts: Qiji swapping blocks, Qiji swapping stations, and Qiji cloud platform. In August last year, CATL's first highway heavy truck battery swapping special line - "Ningde Xiamen Line" was officially opened to traffic.
The third Long Endurance Edition battery has a large capacity of 1000 degrees, with a range of 800 kilometers, suitable for express delivery and fast transportation tasks across provinces.
At present, the driving range of electric heavy trucks is mostly around 200km. Considering the round trip, it is expected to mainly cover scenarios within a radius of 100km. If you want to increase the range, you need to increase the energy capacity, but generally, increasing the energy capacity will increase the corresponding self-weight loss cost, thereby weakening the economic advantage of electric heavy trucks. However, the Long Endurance Edition battery of Tianxing has increased the energy density to 220Wh/kg while adopting a full chassis layout design, expanding the cargo space and increasing user profits.
Taking a heavy truck with an annual operating mileage of 250,000km as an example, the annual fuel cost of a traditional fuel vehicle is 500,000 yuan, while the annual electricity cost of a heavy truck using CATL's Long Endurance Edition is only 200,000 yuan.
The High Strength Edition battery is specifically developed for construction machinery, which can achieve 500,000 kilometers of driving under mining truck conditions without leakage of liquid, electricity, or gas. At the same time, the High Strength Edition has also developed the "Taishan Architecture," which increases the battery volume utilization rate by 40% and reaches the IP68 waterproof standard, which can directly withstand water washing and flushing.
It has been applied to more than 20 models of construction machinery manufacturers including Tongli Heavy Industry, LiuGong Machinery, XCMG, Boliden, Xiangtan Heavy Industry, Northern Shares, Hongda Era, and Linyi Heavy Machinery.
According to terminal sales data and new car announcement data statistics, in September 2024, the battery installation volume of pure electric (including battery swapping) heavy trucks reached 2515MWh. Among them, CATL accounted for 67.67% of the market share with a battery installation volume of 1702MWh. EVE Energy followed with a battery installation volume of 279.1MWh, accounting for 11.1% of the market share. Ruipu Lanjun and BYD ranked third and fourth with battery installation volumes of 194.5MWh and 151.9MWh, respectively.
In addition, companies such as Sany Hongxiang, Aerospace Lithium Electricity, and Guoxuan High-Tech also hold a certain market share, but there is a certain gap in quantity compared to the top three.
At present, the competitive pattern of the electric heavy truck market has not been stable, and the differences in key indicators such as energy consumption and failure rate among various companies will gradually emerge. At the same time, the diversification strategy of car companies in battery supply will continue, and it is clear that the competition in the heavy truck battery market is becoming increasingly fierce.