Why Fitch Sees Tesla As A Major Competitor To Its Own Battery Supplier CATL

Ratings agency Fitch said on Monday Tesla Inc’s TSLA expansion of its supercharging network could imply stiff competition for its battery supplier CATL, which has been betting on its battery-swapping service.

What Happened: Elon Musk-led Tesla, Xpeng Inc XPEV and Volkswagen Group VWAGY are among automakers that could offer CATL’s battery-swapping services near-term resistance as they ramp up their supercharging networks, as per Fitch.

CATL, the world’s largest battery maker, recently launched EVOGO — a fast battery-swapping service. It also supplies batteries to Tesla and U.S.-listed Chinese electric vehicle maker Nio Inc NIO. 

“The success of CATL’s strategy depends on automakers’ willingness to switch to battery swapping. Many are instead investing in high-voltage fast-charging technology,” the analysts at Fitch said.

See Also: Tesla, Nio Battery Supplier CATL Retains Dominance Of Chinese Market In 2021 With 52% Share

Why It Matters: Battery swapping is still a niche EV energy solution compared with charging and is mostly used for fleet vehicles.

Among early adopters, Nio has been aggressively ramping up its battery-swapping service. The EV maker operates 789 of the 1,298 battery-swap stations at the end of 2021 in China, as per Fitch.

Nio aims to add 500 to 600 battery-swap stations each year.

Tesla on the other hand has been scaling up its supercharging network. The EV maker has over 30,000 superchargers globally, of which over 8,000 are in China.

Price Action: Tesla shares closed 4.93% lower at $860 a share on Friday.