Executive Summary / Key Takeaways

• Cheche Group Inc. is rapidly transforming into a dominant force in China's New Energy Vehicle (NEV) insurance technology sector, leveraging its AI-driven platform to capture significant market share and drive profitability.
• The company's NEV business is experiencing explosive growth, with policies and premiums increasing over 135% year-over-year in the first half of 2025, now representing 22.5% of total written premiums, and is projected to account for 50-70% of total business in 3-5 years.
• Despite a revised net revenue guidance for 2025, Cheche Group achieved a 47% improvement in adjusted net loss in H1 2025 and is on track for full-year adjusted operating profitability, driven by higher gross margins from its NEV segment and stringent cost controls.
• New AI-driven intelligent insurance tools and fintech solutions are poised for global rollout starting Q4 2025, with an expected revenue contribution of RMB 300 million to RMB 500 million over the next 3-5 years, offering high-margin growth.
• Cheche Group's strategic partnerships with NEV manufacturers and its technological leadership in data-driven risk control and claims processing are establishing a strong competitive moat, positioning it as a critical digital backbone in the evolving global intelligent mobility ecosystem.

The AI-Powered Engine of China's NEV Insurance Boom

Cheche Group Inc. (CCGWW), founded in 2014 and headquartered in Beijing, China, has strategically positioned itself at the forefront of the burgeoning New Energy Vehicle (NEV) insurance market. Initially established to provide comprehensive auto insurance transaction services through products like "Easy-Insur" and "NEV Insurance Solution," Cheche has evolved into a technology powerhouse, delivering end-to-end AI-driven digital insurance solutions for Original Equipment Manufacturers (OEMs). This focus has allowed the company to become the largest auto insurance technology platform by digital auto insurance transaction premiums, a testament to its foundational strengths and strategic foresight.

The broader industry landscape underscores Cheche's strategic pivot. 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 75% of the global share. NEVs accounted for 44% of new car sales in China during this period, and NEV insurance premiums surged by 41% to RMB 66 billion, nearly ten times the overall auto insurance industry growth of 4.5%. This robust market expansion provides a powerful tailwind for Cheche's specialized offerings.

Technological Edge: AI as the Core Differentiator

Cheche Group's core competitive advantage lies in its intelligent NEV insurance platform, which leverages advanced AI and real-world driving data to deliver superior digital insurance solutions. This technology addresses diverse needs across the insurance value chain, including pricing, risk control, underwriting, and claims processing. The tangible benefits of this AI-driven approach are already evident. In China, Cheche is collaborating with a major automaker, utilizing its AI solutions to reform claims processing, which has resulted in an approximate 50% increase in accuracy.

The company's AI tool is designed to determine real-time accident situations, aiding in liability determination and significantly enhancing anti-fraud capabilities. By integrating loss determination and claims into a single, streamlined process, Cheche aims to complete claim services in a matter of minutes, drastically improving operational efficiency for insurance companies. This efficiency translates into a stronger value proposition for partners and a competitive moat for Cheche.

Beyond its current applications, Cheche is actively investing in future-forward technologies. The company announced two new global initiatives in the first half of 2025: an AI-driven intelligent insurance tool and a fintech solution for automakers abroad. The intelligent insurance tool will further enhance liability determination and automate claims processing, while the fintech solution provides a digital toolbox to support automakers' international expansion with essential financial and insurance infrastructure. Cheche is also collaborating with Huawei and XPeng (XPEV) to develop protection based on intelligent autonomous driving scenarios, and with the China Insurance Automotive Research Institute to establish standards for NEV insurance, signaling its commitment to shaping the future of mobility insurance. These technological advancements are not merely incremental; they are foundational to Cheche's strategy, contributing to its competitive moat, driving higher gross margins, and solidifying its market positioning for long-term growth.

The NEV Flywheel: Accelerating Growth and Margin Expansion

Cheche Group's strategic focus on the NEV sector has yielded impressive results, transforming it into the company's fastest-growing and most promising core business. Over the past three years, the NEV business has maintained a remarkable compound annual growth rate (CAGR) of 140%. This momentum continued into the first half of 2025, with the number of NEV insurance policies transacted on its platform exceeding 810,000, a 135% increase from the prior year. Total written premiums from NEVs reached RMB 2.6 billion, up 150% over the same period.

This rapid expansion has significantly altered Cheche's business mix, with NEV premiums now constituting 22.5% of total written premiums, a substantial increase from 9.3% in the prior year. Management projects that the NEV business will account for over 50% to 70% of its total business within the next three to five years. The company currently holds approximately 10% of the NEV market for new car deliveries and aims to capture 30% to 40% of China's NEV market over the next three to five years, confident in its ability to sustain its high growth momentum. This NEV segment is expected to create a "flywheel effect" for the company's revenue and margin, driving sustainable growth.

Financial Performance: Profitability Amidst Strategic Transition

The first half of 2025 marked a period of strategic transition and improved financial health for Cheche Group. While net revenues decreased by 17.7% year-over-year to RMB 1,348.7 million (USD 188.3 million), this shift was primarily driven by the larger proportion of NEV premiums, which currently carry lower service fee rates in the nascent NEV insurance market. Despite this, the company's gross profit increased by 1.7% to RMB 65.8 million (USD 9.2 million), a clear reflection of improved business structure and operational efficiency leading to higher gross margins.

Crucially, Cheche Group demonstrated significant progress towards profitability. Its adjusted net loss for the first half of 2025 improved by 47% to RMB 10 million (USD 1.5 million) from RMB 24 million in the prior year, keeping the company on track to achieve full-year adjusted operating profitability in 2025. This improvement was supported by stringent cost controls, with total operating expenses decreasing by 23.9% due to reductions in staff costs, share-based compensation, and leveraging its established technology network.

The company reported RMB 167.2 million in cash, cash equivalents, and short-term investments, indicating a stable liquidity position. Management expects operating expenses to remain relatively stable over the next three to five years, further bolstering profitability and net margin.

Competitive Landscape and Global Ambition

Cheche Group maintains a strong competitive position as the largest auto insurance technology platform by digital auto insurance transaction premiums. Its rapid NEV business growth, significantly outpacing the industry, indicates a continuous gain in market share. While direct quantitative comparisons with all niche competitors are challenging to ascertain, Cheche's specialized focus on backend transaction services and SaaS offerings differentiates it from broader digital insurers like ZhongAn Online P&C Insurance (6060.HK), technology-driven brokerages like Huize Holding Ltd (HUIZ), and community-focused platforms like Waterdrop Inc (WDH).

Cheche's proprietary SaaS technology provides a competitive advantage by streamlining insurance processes and offering improved integration for partners, potentially leading to stronger customer loyalty and recurring revenue streams. This technological edge, coupled with its robust partnership network with automakers and insurers, fosters network effects that can reduce customer acquisition costs and enhance revenue stability. While competitors like ZhongAn may have broader product suites and Huize excels in direct consumer sales, Cheche's emphasis on scalable transaction platforms and technological neutrality positions it as a reliable enabler for the industry. However, Cheche's narrower market focus compared to more diversified players and its exposure to regulatory shifts in China present vulnerabilities. The company's ability to execute its global expansion strategy will be critical in mitigating these risks and capitalizing on its technological leadership.

Cheche's vision extends beyond China, with plans to roll out its next-generation AI-driven solutions in global markets starting in the fourth quarter of 2025, with overseas business projected to become a key growth engine beginning in 2026. The company has already formed partnerships with several automotive brands with an overseas focus, developing a roadmap spanning Asia Pacific, Europe, and Latin America. This expansion aims to validate China's mature NEV digital pricing models globally and promote alignment in international insurance standards. The increasing global demand for AI-driven data centers, as seen in broader infrastructure trends, could indirectly support the efficiency and scalability of insurtech solutions like Cheche's, benefiting its growth over competitors.

Outlook and Catalysts for Future Growth

Cheche Group's outlook is defined by its commitment to NEV market leadership and the commercialization of its AI-driven solutions. 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, down from a previously announced range of RMB 3.6 billion to RMB 3.8 billion. This adjustment reflects recent changes in its business structure, specifically the higher proportion of NEV premiums with lower service fee rates, indicating a strategic prioritization of higher-margin revenue streams. Despite this, Cheche affirmed its 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. Crucially, the company remains confident in achieving full-year adjusted operating profitability in 2025.

The projected revenue contribution from its AI-driven solutions and services is a significant catalyst. With China's NEV fleet expected to reach 80 million to 100 million units over the next 3 to 5 years and an estimated industry average claim rate of 30%, Cheche's claim services are anticipated to cover around 30 million NEVs. This market opportunity is projected to contribute RMB 300 million to RMB 500 million in AI-driven solutions and services revenue, which, given their very high gross margins, is expected to translate directly into profit. Management anticipates that operating expenses will remain relatively stable over the next three to five years, further enhancing profitability as revenue from these high-margin services scales.

Key risks include the current lower take rates for NEV insurance, as insurers are still experiencing losses in this nascent market. However, management believes this will improve as the market matures. Regulatory uncertainties in China and the execution risk associated with its ambitious global expansion plans also warrant close monitoring. Nevertheless, the company's strong partnerships with NEV makers, its proven technological capabilities, and its strategic focus on a rapidly expanding market position it for substantial long-term growth.

Conclusion

Cheche Group Inc. is undergoing a profound transformation, evolving from a traditional auto insurance platform into a specialized, AI-powered leader in the burgeoning New Energy Vehicle insurance sector. Its strategic pivot towards NEVs, underpinned by a robust AI-driven technology platform, is generating impressive growth in policies and premiums while simultaneously improving profitability through higher gross margins and disciplined cost management. The company's commitment to innovation, exemplified by its new AI-driven tools and global expansion initiatives, positions it as a critical digital backbone for automakers and insurers worldwide.

While a revised revenue outlook for 2025 reflects a strategic shift towards higher-quality revenue streams, the affirmation of profitability targets and the significant projected contributions from AI-driven solutions underscore a compelling investment thesis. Cheche's technological leadership and deep partnerships provide a strong competitive advantage in a rapidly expanding market. For discerning investors, Cheche Group represents a unique opportunity to participate in the intelligent mobility revolution, driven by its technological prowess and strategic vision to shape the future of insurance in the NEV era.