CATL's battery swap business will first be available for operational vehicles used and will gradually penetrate into vehicles for general consumers in the future, CICC said.

Chinese power battery giant CATL announced today that it will launch EVOGO, a brand for battery swap services, but did not provide any details. Now a local media report is giving us a glimpse of where the business may be headed.

China Securities Journal cited industry sources as saying that Contemporary Amperex Technology Co Ltd (CATL)'s battery swap service will be available to all vehicle companies.

The report cited CICC, a top Chinese investment bank, as saying that the business will first be geared toward operational vehicles, namely cabs, and will gradually penetrate to vehicles for general consumers in the future.

In September 2021, China FAW's brand Bestune launched a joint project with the city of Liaoyuan in northeastern China's Jilin province to promote battery swap-enabled NEVs, delivering 500 Bestune NATs (Next Automatic Taxis) to the city.

CICC believes that the battery swap-enabled version of the Bestune NAT will be the first vehicle to be supported by the CATL (SHE: 300750) battery swap system based on a standardized battery box for operation, according to China Securities Journal.

Following the Bestune NAT, more automakers are expected to launch models using this standardized battery to meet the pace of some regions for battery swap business rollouts, according to CICC.

CATL said on its official WeChat account earlier today that it will hold a launch event to unveil its battery swap brand called EVOGO.

The launch will take place on Tuesday, January 18 at 3:30 p.m. Beijing Time, according to the company, which did not disclose any more information.

This is not the first time CATL has shown support for the battery swap model.

In August 2020, Nio launched its BaaS (Battery as a Service) battery rental business, and Mirattery, a joint venture between CATL, Nio, Guotai Junan and Hubei Science Technology Investment, is the manager of these battery assets.

On August 20, 2021, CATL established a subsidiary, Shidai Electric Service Technology Co Ltd in Xiamen, Fujian province as the operating entity for the battery swap business, and on December 20, Shidai established a regional company in Jilin to operate the battery swap business.

Late last month, CnEVPost noted that CATL signed a cooperation agreement with Guizhou province in southwestern China on December 24 to jointly build a battery swap network.

CICC believes that CATL's battery swap business is expected to expand at an accelerated pace in multiple regions, following Jilin and Guizhou, and is expected to take the lead in Fujian, Jiangsu and Sichuan, and spread rapidly across the country.

CATL has an absolute dominant position in the Chinese power battery market, and did so for the full year 2021.

The company's power battery installed base in China for the full year 2021 is 80.51 GWh, accounting for 52.1 percent market share, according to data released by the China Automotive Battery Innovation Alliance on January 12.

It's worth noting that it doesn't seem easy to get other carmakers to accept its battery standards, although CATL's move is a bold and applaud-worthy one.

CATL's customer Nio is now one of the most aggressive companies in China in building its battery swap station network, with 791 battery swap stations in the country as of January 15.

Nio has been emphasizing for the past year or two that its battery swap system is open to other companies, as long as they are willing to accept its chassis design specifications. To date, however, no carmaker has confirmed that it will use the system, although it is a possibility in the future.