Cheche Group's Q2 2025 Earnings Call: Contradictions Emerge on NEV Market Share, Cost Controls, and AI-Driven Revenue Forecasts

The above is the analysis of the conflicting points in this earnings call

Date of Call: August 28, 2025

Financials Results

• Revenue: RMB 1,348.7M (USD 188.3M), down 17.7% YOY

Guidance:

• FY2025 net revenue revised to RMB 3.0–3.3B (from RMB 3.6–3.8B).
• FY2025 total written premiums expected at RMB 25.5–27.0B.
• FY2025 NEV written premiums expected at RMB 7–8B.
• FY2025 adjusted operating results expected to shift from loss to profit.
• International rollout of AI insurance/fintech to begin in Q4 2025; overseas business a key growth engine starting 2026.
• Target 30–40% share of China’s NEV insurance market in 3–5 years.
• NEV mix expected to reach 50–70% of total business in 3–5 years.

Business Commentary:

* NEV Insurance Growth: - Cheche Group reported 810,000 NEV insurance policies transacted on its platform in Q2 2025, representing a 135% increase from the prior year, while total written premiums reached RMB 2.6 billion, up 150% over the same period. - Growth was driven by strong demand for NEV insurance policies and partnerships with major NEV manufacturers.

• Improved Financial Performance:
• The company's adjusted net loss for the first half of 2025 improved to RMB 10 million or USD 1.5 million, down 47% from RMB 24 million in the prior year.

• This improvement was due to increased gross margins resulting from business structure improvements and operational efficiency efforts.

• AI and Fintech Initiatives:

• Cheche Group announced plans for two transformative initiatives: an AI-driven intelligent insurance tool and a fintech solution for automakers abroad.

• These initiatives aim to strengthen the company's leadership in China and position it as a digital backbone connecting automakers, insurers, and vehicle owners globally.

• International Expansion Strategy:

• The company plans to roll out its next-generation solutions in global markets beginning in Q4 2025, with a focus on Asia Pacific, Europe, and Latin America.
• This expansion is expected to validate China's NEV digital pricing model in global markets and promote alignment in international insurance standards.

Sentiment Analysis:

• Management cut FY2025 net revenue guidance to RMB 3.0–3.3B from RMB 3.6–3.8B, but reiterated expectations to achieve adjusted operating profitability in 2025. NEV momentum was strong: 810,000 embedded NEV policies (+135.5% YOY) and RMB 2.6B premiums (+150.6% YOY), lifting gross profit (+1.7% YOY) and gross margin. Adjusted net loss improved 56.9% YOY to RMB 10.5M.

Q&A:

• Question from Unidentified Analyst (CICC): Could you discuss recent progress and the strategic roadmap for the NEV business and future innovation opportunities?
  Response: Cheche is scaling an AI-driven end-to-end NEV insurance platform with 15 OEM partners, focusing on risk control/claims automation and launching international expansion starting in Q4 2025.

• Question from Derek Greenberg (Maxim Group): What is your current NEV market share as a baseline for the 30%–40% target?
  Response: About 10% of new NEV deliveries today; management is confident in reaching 30%–40% in 3–5 years.

• Question from Derek Greenberg (Maxim Group): NEV mix is 22.5% vs 9.3% prior—where do you see mix trending?
  Response: NEV is expected to rise to 50%–70% of total business over the next 3–5 years.

• Question from Derek Greenberg (Maxim Group): Why are net revenues lighter despite strong premiums—are NEV take rates lower?
  Response: NEV take rates are lower as insurers are loss-making now, but margins are higher and take rates should improve as NEV insurance turns profitable.

• Question from Derek Greenberg (Maxim Group): How will the two new AI products roll out and which geographies are first?
  Response: In China, AI claims with a major OEM boosts accuracy ~50%; APAC rollouts (e.g., Thailand, Australia) are underway via signed local partnerships.

• Question from Mark Patrick Long (Prime Impact Capital): How are you leveraging AI/data analytics in claims and fintech?
  Response: Cheche uses vehicle data for real-time liability determination, anti-fraud, and end-to-end automated claims to resolve cases in minutes, improving insurer efficiency.

• Question from Mark Patrick Long (Prime Impact Capital): What revenue contribution do these initiatives drive in 3–5 years?
  Response: AI-driven solutions are expected to generate RMB 300–500M in revenue, largely translating to profit due to high gross margins.

• Question from Mark Patrick Long (Prime Impact Capital): Will these initiatives require significant opex increases?
  Response: No; operating expenses will be tightly controlled, enabling operating leverage and higher profitability.

• Question from Derek Greenberg (Maxim Group): What drove year-over-year declines in operating expenses?
  Response: Headcount discipline and lower share-based compensation; opex should remain relatively stable over the next 3–5 years.

• Question from Derek Greenberg (Maxim Group): What are your initiatives around autonomous driving?
  Response: Cheche is working with Huawei and XPeng on intelligent-driving protection and with the China Insurance Automotive Research Institute on NEV insurance standards.

• Question from Derek Greenberg (Maxim Group): Any notable macro/regulatory developments?
  Response: Cheche aims to export China’s NEV insurance models globally; NEV will be a key growth engine with global penetration expected to exceed 15%.