[SMM Analysis] BAIC Foton and CATL Launch Ten-Year Strategic Cooperation

On February 8, 2025, BAIC Foton, a top-tier Chinese commercial vehicle enterprise, and CATL, a global power battery giant, signed a ten-year strategic cooperation agreement in Ningde, Fujian. The two parties will engage in deep collaboration on the electrification of commercial vehicles, including technology R&D, overseas market expansion, aftermarket services, and the construction of an industrial ecosystem.

The two parties are expected to achieve breakthroughs in the field of cutting-edge technology development, covering three major technological routes: pure electric, hydrogen fuel, and hybrid. BAIC Foton has already established a full range of new energy commercial vehicle product lines (including heavy trucks, light trucks, and buses), while CATL has maintained the global number one market share in the commercial vehicle power battery sector for consecutive years. Its "Qilin" battery brand has been widely applied in logistics and public transportation. The cooperation will integrate Foton's vehicle development capabilities with CATL's battery technology advantages to accelerate the application of high-energy-density, long-driving-range batteries and explore next-generation technologies such as solid-state batteries.  
       BAIC Foton has proposed the "Overseas 30·30 Strategy," aiming to achieve overseas sales of 300,000 units by 2030, with new energy vehicles accounting for 30%. Through this cooperation, CATL is expected to strengthen its leading position in the overseas commercial vehicle battery supply chain. The two parties plan to jointly promote new energy car models in emerging markets such as Southeast Asia and South America and establish localized service systems to address the competitive pressure from European and American automakers in the electrification field.  
      The cooperation particularly emphasizes the layout of "aftermarket services for vehicles and power batteries," including innovations in business models such as battery recycling, leasing, and cascade utilization. Previously, the two parties had jointly established a new energy battery leasing company, aiming to reduce car purchase costs for users through operational leasing and promote the adoption of electric commercial vehicles in logistics, urban construction, and other scenarios.  

       Commercial vehicles account for over 50% of China's total automotive carbon emissions, yet their electrification rate is far lower than that of passenger vehicles. This cooperation is expected to reduce battery costs through economies of scale while advancing diversified technological routes such as battery swapping and hydrogen energy. For instance, BAIC Foton has achieved scenario-based breakthroughs in the battery-swapping heavy truck sector, while CATL plans to address commercial vehicle driving range anxiety further through the mass production of half-solid state batteries.  Currently, the commercial vehicle electrification market is showing a trend of deep integration between automakers and battery manufacturers. Companies like BYD and FAW Jiefang are also accelerating their layouts, while CATL faces challenges from competitors such as BYD and Farasis Energy. This cooperation may compel other enterprises to accelerate technological iterations and ecosystem collaborations, forming a "technology-scenario-service" full-chain competition.  Despite the broad prospects for cooperation, two major risks remain: first, policy barriers in overseas markets (such as the EU's carbon tariffs and localization production requirements); second, uncertainties in the commercialization process of the hydrogen fuel technology route. Additionally, fluctuations in raw material prices and an underdeveloped recycling system may impact long-term cost control.  

The cooperation between BAIC Foton and CATL holds significant importance for both parties. If they can effectively integrate resources, they will not only consolidate their market share in China but also potentially gain a competitive edge in the global wave of commercial vehicle electrification. At the same time, through vertical coordination across the industry chain, they aim to overcome multiple bottlenecks in technology, cost, and scenario application, ultimately transforming new energy commercial vehicles from an "alternative option" to a "mainstream choice."  

SMM New Energy Industry Research Department

Cong Wang 021-51666838

Xiaodan Yu 021-20707870

Rui Ma 021-51595780

Disheng Feng 021-51666714

Yujun Liu 021-20707895

Yanlin Lü 021-20707875

Zhicheng Zhou 021-51666711

Haohan Zhang 021-51666752

Zihan Wang 021-51666914

Xiaoxuan Ren 021-20707866

Yushuo Liang 021-20707892

Jie Wang 021-51595902

Yang Xu 021-51666760

Boling Chen 021-51666836