CATL Signs Partnership Agreement with Automaker BAIC Group
On March 13, Chinese battery giant CATL signed a strategic partnership agreement with state-owned automobile manufacturer BAIC Group. As part of the agreement, CATL will have a significant role in the development and production of BAIC vehicles, and will supply them with high-quality batteries and related services.
As per CATL’s most recent financial report, the company’s income for 2022 amounted to 328.6 billion yuan ($47 billion) and its net profit was 30.7 billion yuan ($4.46 billion). In the fourth quarter of the previous year alone, the company’s net profit reached an impressive 13.1 billion yuan ($1.9 billion). Over the past five years, CATL’s average gross profit margin for battery systems was 26%, with a peak of 35%. Moreover, CATL currently holds a cash reserve of 157.6 billion yuan ($22 billion).
Robin Zeng, the chairman of CATL, is an ambitious leader who espouses a philosophy of humility. He once stated that CATL’s mission is to create a platform for car manufacturers to “dance”, with CATL serving in the background while various other players take the lead. Despite this seemingly modest approach, CATL has quietly built an empire of its own, establishing itself as a dominant force in the battery industry.
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The partnership between BAIC Group and CATL can be traced back to 2010. In the past 13 years, the two companies have continuously deepened their collaboration in various areas such as supply, technology development, battery standards and specifications development, and after-sales service.
BAIC, which was previously focused on producing fuel-powered cars, has been making strides to transform itself into an electric vehicle manufacturer. Its holding company, Beijing Electric Vehicle Co., Ltd., has been collaborating with various technology companies to incorporate advanced features like auxiliary driving and cockpit detection into its vehicles. BAIC’s partnership with Huawei is particularly noteworthy. In 2018, the two companies established the “1873 Davidson Innovation Lab”, and together they launched the HI version of ARCFOX Alpha S last year.
As part of its strategic plan, BAIC Group aims to leverage technology platforms such as big data, blockchain, information security, and artificial intelligence to drive its development and growth. By 2025, the company intends to fully integrate these technologies into its operations to enhance efficiency, improve product quality, and optimize its supply chain. The use of these advanced technologies will enable BAIC to remain competitive in the rapidly evolving automotive industry and meet the evolving needs of its customers.