Chinese battery giant CATL and FAW Jiefang, the commercial vehicle division of FAW Group, formed a joint venture on August 18 aimed at exploring the new energy commercial vehicle market.
The business of the new Hebei-based JV – dubbed “Jiefang Shidai New Energy Technology Co., Ltd.” – will include new energy commercial vehicle sales, carbon credit trading, vehicle leasing, and exploration of body and battery separation business model, with the aim of creating a new energy truck ecological chain to help with urban electrification.
FAW Jiefang, established on January 18, 2003, is a manufacturer of medium, heavy and light trucks and buses with an annual production capacity of 343,000 vehicles. In 2021, the company sold nearly 440,000 vehicles, including 373,400 medium and heavy-duty trucks.
Hu Hanjie, Chairman of Faw Jiefang, gave a detailed introduction of the new JV, announcing that both parties will spend 500 million yuan ($73.4 million) to provide customers with three major services.
The first pertains to a “body and battery separation” business model. Through the operation scheme of “purchasing battery-free chassis and rented batteries,” customers can greatly reduce upfront investment. At the same time, combined with customer operation scenarios, both sides will provide customized battery swapping station construction and operation services. The second one is vehicle leasing and capacity undertaking services to greatly reduce customer asset occupation and optimize operation mode. The third one is to provide used car and battery recycling services.
As early as 2018, FAW Jiefang and CATL began to cooperate in the development of heavy truck models, and their supply in fields such as urban construction, residue, dumping, public transportation and other fields. In January this year, they signed a five-year agreement to strengthen their close cooperation in the supply of power batteries.
CATL’s installed power battery bases in China totaled 11.41 GWh in July, continuing to rank first with a 47.19% share, according to data released by the China Automotive Battery Innovation Alliance on August 11.