Can the growth of power battery manufacturers from land to water be quickly replicated?

The current development trend of electric ships is similar to that of electric vehicles a decade ago. Although still in the initial stage of industry development, leading companies have already set their sights on the future, proposing the goal of "aiming to sail electric ships to the open ocean within three years." This is the "maritime ambition" disclosed by CATL (300750.SZ/03750.HK) at the Shanghai Maritime Exhibition recently.

This is not surprising. As the absolute leader in battery cell supply for the global electric vehicle and energy storage sectors, CATL has been continuously releasing new signals this year—seeking "multi-domain growth," attempting to expand its technology application scenarios from land to sea, land, and air.

Su Yiyi, Co-President Assistant of CATL's Market System and General Manager of CATL Electric Ship Technology Co., Ltd. (hereinafter referred to as "CATL Electric Ship"), told The Paper (www.thepaper.cn) and other media outlets, "The shipbuilding sector is not an isolated business, but a crucial link in the 'multi-domain growth' strategy." With CATL's global power battery market share approaching 40%, the shipbuilding sector is becoming an important part of its innovative growth curve.

It is worth noting that the International Maritime Organization (IMO) has set a goal of achieving net-zero greenhouse gas emissions by around 2050. This presents an urgent need for a green transformation in the global shipping industry, while also creating significant development opportunities for related green and intelligent technologies. Shipping decarbonization is seen as the next trillion-dollar industry with a high probability of success. Furthermore, the successful application of lithium-ion batteries in the electric vehicle industry has made ship electrification one of the best technological paths to "zero emissions" in green shipping.

CATL is not the only company seeking growth in rivers, lakes, and seas. With the continuous decline in the cost of lithium iron phosphate batteries and the slowdown in the penetration rate of electric vehicles, lithium battery manufacturers with technology transfer capabilities have been actively investing in electric ships in recent years. However, with its experience supporting nearly 900 electric ships, CATL has a first-mover advantage, leaping from a single battery supplier to a provider of zero-carbon shipping system solutions.

Market opinion suggests that electric ships are currently at a critical turning point, transitioning from policy-driven to market-driven growth. The key to overcoming this turning point lies in the effective synergy and interconnection of the entire industry ecosystem, thereby propelling electric ships from the proof-of-concept stage to the mature operational stage. How can the industrial ecosystem of inland waterway shipping, a vital east-west and north-south artery, be reshaped?

Inland waterway shipping, as a crucial east-west and north-south artery, boasts comparative advantages such as large transport capacity, low cost, and green, low-carbon characteristics. However, for a long time, it has suffered from bottlenecks and bottlenecks, weak port hub radiation capacity, and low levels of transport organization. These shortcomings, coupled with the fragmentation of cargo owners, ports, refueling, and operations during the traditional fuel-powered ship era, have led to an inefficient industrial ecosystem.

In June of this year, six departments, including the Ministry of Transport, jointly issued the "Opinions on Promoting High-Quality Development of Inland Waterway Shipping," clearly focusing on improving inland waterway shipping facilities, equipment, and transport service capabilities, and promoting green, low-carbon, and intelligent innovation transformation, thus pointing the way for ecological reshaping.

From the perspective of industry chain participants, where are the opportunities for ecological reshaping? In an interview with The Paper (www.thepaper.cn), Zhuang Zhanting, Deputy General Manager of CATL Electric Ship, stated, "Moving from the era of traditional fuel-powered ships to the era of electric ships, especially with the added benefit of intelligent technology, we believe there is an opportunity, and a great deal of potential, to reshape the industrial ecosystem through technology, new concepts, and cooperation with production partners."

One of CATL's practical solutions, the "6006 Pure Electric Multipurpose Transport Vessel" (hereinafter referred to as "Jining 6006"), demonstrates that the company's reshaping is not a single-stage transformation, but rather a closed-loop integration of the entire chain from R&D and construction to operation, centered on the "ship-shore-cloud" integration.

The "Jining 6006" is built, owned, and operated by Ronghui Times Company, a joint venture between CATL and Jining Energy. This cargo ship is 67.6 meters long, 12.66 meters wide, and has a deadweight tonnage of nearly 2,000 tons. It is equipped with two box-type power supplies with a total capacity of 3919 kWh, allowing it to travel 230 km on a full charge. This is also the first domestic demonstration project for battery swapping on a cargo ship with a fully integrated and independently operated charging and swapping station.

Clearly, the challenge of "Jining 6006" is not just building a ship, but truly creating a closed-loop business model encompassing a 2,000-ton cargo ship, a port charging and swapping station, and a cloud-based operating platform, achieving integrated delivery, independent operation, and sustainable profitability. Zhuang Zhanting further stated, "It doesn't define a new standard for a single ship, but rather a new paradigm for electric vessels, moving from partial breakthroughs to 'full-area incremental growth,' meaning it can both meet zero-carbon targets and outperform traditional oil tankers in terms of TCO (Total Cost of Ownership)."

According to reports, CATL's "Ship-Shore-Cloud Zero-Carbon Shipping and Smart Port Integration Solution" can reduce the overall TCO of cargo ships by more than 33% and tugboats by more than 50% in actual operation. Zhuang Zhanting believes that "inland waterway freight is still in its early stages, but water transport is actually a lower-cost and more efficient mode of transportation, especially for bulk commodities. In the future, it can more effectively improve the overall efficiency of social logistics and reduce costs."

He also emphasized that CATL is a technology service provider, but more importantly, it plays the role of an ecosystem integrator.

On the "Jining 6006," various scattered elements were systematically connected, deeply integrating CATL's full-scenario technology capabilities in "ship-shore-cloud" integration with Jining Energy's port and logistics resources. Through an innovative "ship-station integrated" overall solution, the core bottlenecks in the range and efficiency of inland waterway vessel electrification were systematically addressed.

This is a standard template explored by CATL in inland waterway shipping, which is expected to be replicated domestically and even globally in the future.

Solving the industry's three major anxieties cannot rely on simple transplantation of land-based technologies.

Three Main Concerns for Green Navigation:

• Energy replenishment anxiety – limited range, inconvenient charging facilities, and long charging wait times restrict sailing distance and operational efficiency;
• Cost anxiety – high initial investment, concerns about battery life, and reliance on policy subsidies affect decision-making;
• Safety anxiety – questions about battery system reliability, requirements for new crew skills, and concerns about data network security – these are the cornerstones of all trust.

CATL's "ship-shore-cloud" integrated solution aims to achieve end-to-end integration from shipboard power systems and shore-based energy replenishment networks to cloud-based intelligent management using existing technologies. Within this integrated solution framework, electric ships still need corresponding solutions tailored to different application scenarios and ship types.

Currently, electric ships are mainly used in applications including ordinary cruise ships, city passenger ships, tugboats, cargo ships, and coastal government vessels. Taking cargo ships as an example, based on the current overall port facilities, CATL has proposed a new business model: battery swapping, primarily using "containerized power supplies + battery swapping," which solves the problems of long range and high turnover rate. Battery swapping, as one of the technological routes to address range anxiety in electric vehicles, is not new. CATL is currently heavily investing in building a battery swapping network in the electric vehicle sector. Zeng Yuqun publicly stated at the Chocolate Battery Swapping Ecosystem Conference last December that by 2030, battery swapping, home charging, and public charging stations will share the market equally.

What is noteworthy is the significant difference in technology and business models involved in transitioning from electric vehicles to electric ships, from the perspective of battery manufacturers. Su Yiyi frankly stated that electric ships are not simply a transplant of CATL's land-based technology; they need to directly address a series of stringent challenges on water, such as high salt spray, long sailing time, and high power requirements.

This requires completing three leaps:

1. Strengthening and adapting hardware and systems from "automotive-grade" to "marine-grade";
2. Facilitating the collaborative migration of intelligence and data ecosystems from "vehicle-road-cloud" to "ship-port-cloud";
3. Shifting the business model from "driving vehicles" to "driving industry transformation."

Regarding the first leap alone, Su Yiyi emphasized that it's not simply about directly installing automotive batteries on ships, but rather a comprehensive reconstruction for maritime adaptability. From a battery system perspective, CATL has developed China's first "dual-branch box-type power supply," essentially equipping ships with redundant "dual hearts," ensuring safety even if one circuit fails.

Furthermore, regarding the widely discussed safety concerns of marine batteries, CATL Electric Ship emphasizes that it has ranked first globally in both power batteries and energy storage for many consecutive years, establishing a complete safety system encompassing materials, cells, systems, and testing and verification. These capabilities are not simply replicated in the electric ship sector but have been systematically enhanced under even more demanding operating conditions.

CATL's foray into the shipbuilding industry began in 2017, with its first electric ship launched and operational in 2019. In November 2022, CATL's wholly-owned subsidiary, CATL Electric Ship, was officially registered in Ningde City, Fujian Province. According to reports, to date, CATL has safely delivered nearly 900 electric ships, achieving a global market share of approximately 40%, firmly holding the top position in the global electric ship battery supply market.

Although CATL is still a player in the industry, Su Yiyi said that going to the sea is an inevitable path, and domestic coastal projects are already in preparation. It is expected that electric ships will be sailed to the open ocean in three years.