Executive Summary / Key Takeaways

• Cheche Group (NASDAQ:CCG) is rapidly transforming into a specialized, AI-driven leader in China's booming New Energy Vehicle (NEV) insurance market, demonstrating exceptional growth that significantly outpaces the broader industry.
• The company's strategic pivot to NEV insurance, underpinned by advanced AI-driven tools for claims processing and risk management, is enhancing operational efficiency and driving a shift towards higher gross margins, despite lower service fee rates in the nascent NEV insurance sector.
• CCG achieved a 47% improvement in adjusted net loss for the first half of 2025, reaching RMB 10 million (USD 1.5 million), and is on track to achieve full-year adjusted operating profitability in 2025.
• With ambitious targets to capture 30% to 40% of China's NEV market and a projected RMB 300 million to RMB 500 million in revenue from AI-driven solutions over the next 3 to 5 years, Cheche is poised for substantial future growth and profitability.
• The company is initiating a global expansion in Q4 2025, leveraging its mature NEV digital pricing models and fintech solutions to serve international automakers, positioning overseas business as a key growth engine from 2026.

The Electrified Road Ahead: Cheche Group's Strategic Evolution in China's NEV Boom

Founded in 2014 and headquartered in Beijing, Cheche Group Inc. has established itself as a prominent auto insurance technology platform in China. The company's journey began by offering digital insurance transaction services, including its Easy-Insur platform for a range of auto and non-auto insurance products, and the specialized NEV Insurance Solution designed to support New Energy Vehicle manufacturers with comprehensive digital insurance services. This foundational experience has uniquely positioned Cheche to capitalize on one of the most significant shifts in the global automotive industry: the rapid electrification of vehicles.

China's NEV market is scaling at an unprecedented pace, fueling immense demand for innovative insurance solutions. In the first half of 2025, global NEV sales reached 9.1 million units, with China contributing an impressive 6.9 million units, representing a substantial 75% global share. NEVs accounted for 44% of new car sales in China during this period, and the demand for NEV insurance is scaling rapidly. While overall auto insurance premiums grew 4.5% year-over-year to RMB 440 billion, NEV insurance premiums surged by 41% to RMB 66 billion, nearly ten times the overall industry growth. This robust expansion of the NEV ecosystem provides a strong tailwind for Cheche Group's strategic focus and validates its deep investments in this sector.

Cheche's overarching strategy is centered on becoming the digital backbone connecting automakers, insurers, and vehicle owners globally, with a particular emphasis on the intelligent and connected NEV segment. The company is actively deepening partnerships with both traditional and NEV automakers, providing customized systems and embedded insurance products. These collaborations offer rich data, valuable insights, and direct customer access, enabling Cheche to continually enhance its solutions and broaden its reach.

Technological Edge: Fueling Efficiency and Expanding the Moat

At the heart of Cheche Group's competitive advantage lies its differentiated, AI-driven technology. The company's core technological offerings include an AI-driven intelligent insurance tool and a fintech solution designed for automakers abroad, alongside an anti-fraud claims system tailored for intelligent driving scenarios.

The AI-driven intelligent insurance tool leverages real-world driving data to enhance liability determination, automate claims processing, and improve efficiency for insurers. This technology allows for real-time accident situation analysis, aiding in the accurate determination of responsibility when an accident occurs. Furthermore, by analyzing vehicle driving data, the system significantly improves accuracy and streamlines claims automation, enabling the integration of loss determination and claims processing into a single, swift procedure that can be completed in minutes. This capability can increase claims processing accuracy by approximately 50% for cooperating automakers.

Cheche's research and development initiatives are strategically aligned with the future of mobility. The company is actively collaborating with technology giants like Huawei and NEV manufacturers such as XPeng (XPEV) to develop specialized protection solutions based on intelligent autonomous driving scenarios. In the fourth quarter of 2025, Cheche is also partnering with the China Insurance Automotive Research Institute to establish standards for NEV insurance, addressing a critical need in this evolving market.

For investors, these technological advancements are paramount. They contribute significantly to Cheche's competitive moat by offering superior efficiency and accuracy in a complex and data-rich environment. The high gross margin associated with these AI-driven products is expected to significantly improve the company's financial and operational structure. This technological leadership positions Cheche not only for sustained growth in China but also as a key enabler for the global transition to intelligent and connected mobility.

Strategic Partnerships and Market Dominance in NEV

Cheche Group's strategic emphasis on the NEV sector is yielding substantial operational achievements. In the first half of 2025, the number of NEV insurance policies transacted on its platform exceeded 810,000, marking a robust 135% increase from the prior year. Total written premiums for NEVs reached RMB 2.6 billion, up an impressive 150% over the same period. Over the past three years, the NEV business has maintained a compound annual growth rate (CAGR) of 140%, significantly outpaces the overall industry's 40% growth rate. This rapid expansion has seen NEV premiums grow to constitute 22.5% of Cheche's total written premiums, a notable increase from 9.3% in the prior year.

The company has solidified its position through strategic alliances, currently partnering with 15 major NEV manufacturers. Recent expansions include a deepened partnership with Volkswagen Anhui (VWAGY) to deliver end-to-end risk management for NEVs, and an enhanced collaboration with NIO Inc. (NIO) to refine insurance services across NIO's multi-brand portfolio. Additionally, Cheche has partnered with Jetour Auto, an automotive brand under Chery Holding Group. These partnerships are crucial for Cheche's ambition to serve 30% to 40% of China's NEV market over the next three to five years, building on its current approximate 10% share of new NEV deliveries.

Financial Performance: A Profitable Transformation Underway

The first half of 2025 marked a period of strategic positioning and improved financial health for Cheche Group. The company reported an adjusted net loss of RMB 10 million (USD 1.5 million), a significant 47% improvement from RMB 24 million in the prior year. This progress keeps Cheche on track to achieve full-year adjusted operating profitability in 2025.

Despite a 17.7% year-over-year decrease in net revenues to RMB 1,348.7 million (USD 188.3 million), primarily driven by a larger proportion of NEV premiums with lower service fee rates, the company's gross profit increased by 1.7% to RMB 65.8 million (USD 9.2 million). This seemingly counterintuitive trend is a clear reflection of the effectiveness of Cheche's improved business structure and operational efficiency, as the NEV business, while having lower take rates, enjoys a much higher gross margin than traditional car insurance. This shift indicates an improvement in the quality of revenue and overall profitability.

Operational expenses also saw significant reductions. Selling and marketing expenses decreased by 10.6% to RMB 37.3 million (USD 5.2 million), largely due to lower staff costs and share-based compensation. General and administrative expenses declined even more sharply, by 39.7% to RMB 37.3 million (USD 5.2 million). Overall, total operating expenses decreased by 23.9% to RMB 92.8 million (USD 13 million). These cost controls, coupled with the higher gross margins from the NEV segment, are pivotal to Cheche's path to profitability. The company's liquidity position, with RMB 167.2 million (USD 23.3 million) in cash, cash equivalents, and short-term investments in the prior year period, provides a foundation for its strategic investments.

Competitive Landscape: Outpacing Rivals with Specialization

Cheche Group holds a strong position as the largest auto insurance technology platform by digital auto insurance transaction premiums in China, with its growth continuing to set the pace for the industry. The company's specialized focus on auto insurance, particularly NEVs, provides a distinct competitive edge against both traditional insurers and broader insurtech players.

Compared to direct competitors like ZhongAn Online P&C Insurance (ZA), Huize Holding Limited (HUIZ), and Waterdrop Inc. (WDH), Cheche's platform offers notably more integrated services for auto policy management, potentially leading to greater efficiency in claims processing. While ZhongAn boasts a broader product range and established ecosystem, offering stronger customer loyalty through diversified services, Cheche's targeted approach to auto insurance provides potentially simpler user experiences for auto-specific customers. Cheche's NEV business growth, with a 140% CAGR over the past three years, significantly outpaces the industry's 40% growth rate, indicating substantial market share gains. This specialized expertise and rapid growth allow Cheche to differentiate itself from Huize, which has a broader but less focused approach, and Waterdrop, which excels in user acquisition across wider insurance categories but may lack the deep auto-specific optimization of Cheche.

Cheche's competitive advantages, or moats, are primarily its proprietary digital platform for auto insurance and its robust partnerships within the automotive ecosystem. The digital platform enables streamlined policy management, translating to enhanced customer loyalty and potentially superior margins through efficient operations. This efficiency helps Cheche counter the broader service offerings of competitors by providing greater effectiveness in auto claims, thereby improving its pricing power and financial health.

However, Cheche faces vulnerabilities, including a heavy reliance on the auto insurance sector and potential regulatory dependencies. This focus could lead to revenue volatility if auto demand fluctuates. Despite these challenges, the high barriers to entry in the insurtech industry, such as regulatory approvals and significant technology investments, help Cheche defend its position against new entrants.

Outlook & Growth Catalysts: Global Ambitions and Profitability

Cheche Group's forward-looking strategy is characterized by ambitious growth targets and a clear roadmap to enhanced profitability. For the full year 2025, the company has revised its net revenue guidance to an approximate range of RMB 3 billion to RMB 3.3 billion, reflecting the ongoing shift in business structure towards higher-margin NEV premiums. Importantly, Cheche affirms expectations for total written premiums placed ranging from RMB 25.5 billion to RMB 27 billion, and NEV written premiums placed ranging from RMB 7 billion to RMB 8 billion. The company also reiterates its expectation for adjusted operating results to shift from a loss to a profit for the full year 2025.

A significant growth catalyst is the projected revenue contribution from Cheche's AI-driven solutions and services, expected to be between RMB 300 million and RMB 500 million over the next three to five years. This projection is underpinned by the anticipated growth of China's NEV fleet to 80 million to 100 million units within the same timeframe. Based on an estimated industry average claim rate of 30%, Cheche's claim services are expected to cover around 30 million NEVs, with the high gross margin of these AI-driven products translating directly into profit.

Beyond China, Cheche Group is preparing for a strategic global expansion. The company plans to roll out its next-generation solutions in international markets starting in the fourth quarter of 2025, with overseas business expected to serve as a key growth engine beginning in 2026. Cheche has already forged partnerships with several automotive brands that have a strong overseas focus, developing a comprehensive global roadmap spanning the Asia Pacific region, Europe, and Latin America. This expansion aims to validate and refine China's mature NEV digital pricing models in global markets, promote alignment in international insurance standards, and empower the ecosystem-wide globalization of China's automotive industry. Management is confident in maintaining operating expenses under control, expecting them to remain relatively stable over the next three to five years, which will further amplify the impact of revenue growth on net margins.

Conclusion

Cheche Group is executing a compelling transformation, evolving into a highly specialized and technologically advanced leader in the New Energy Vehicle insurance sector. Its strategic focus on NEVs, coupled with significant investments in AI-driven solutions, has not only fueled exceptional growth rates but also fundamentally improved its business structure and profitability profile. The company's ability to leverage its proprietary digital platform and deep partnerships to capture a growing share of the rapidly expanding NEV market, while simultaneously controlling operational costs, positions it for sustained financial improvement.

With a clear path to full-year adjusted operating profitability in 2025 and ambitious plans for global expansion, Cheche Group is poised to capitalize on the worldwide transition to intelligent and connected mobility. The projected revenue contributions from its high-margin AI solutions and the strategic validation of its NEV digital pricing models in international markets underscore a robust long-term growth trajectory. While reliance on the auto insurance sector presents a concentrated risk, Cheche's technological leadership and strong competitive positioning in a high-growth niche suggest a compelling investment thesis for discerning investors seeking exposure to the future of automotive insurance.