Cheche Group's Strategic Partnership with FAW Bestune and the Future of Digital Auto Insurance in China

The digitization of post-sale vehicle services in China is undergoing a seismic shift, driven by the rapid adoption of new energy vehicles (NEVs) and the integration of advanced technologies like 5G, AI, and Vehicle-to-Everything (V2X) systems. At the forefront of this transformation is Cheche Group, a digital insurance platform that has positioned itself as a disruptor through strategic partnerships and AI-driven innovation. Its collaboration with FAW Bestune-a leading NEV manufacturer-exemplifies how the company is redefining the auto insurance value chain, leveraging digital workflows to streamline vehicle delivery and insurance services. This analysis evaluates Cheche's disruptive potential in the context of China's evolving automotive and insurance ecosystems.

A Digital Workflow Revolution

Cheche's partnership with FAW Bestune has introduced a fully digital one-stop vehicle delivery service, integrating insurance solutions with the Chinese government's 12123 traffic management platform. This collaboration allows new car buyers to purchase insurance and apply for temporary license plates online, eliminating the need for in-person visits to government offices or insurers according to Cheche Group. By embedding this service into FAW Bestune's platform, Cheche has created a seamless digital workflow that reduces friction in the vehicle delivery process, enhancing user experience and operational efficiency.

The significance of this initiative lies in its alignment with broader trends in China's auto insurance market. Traditional insurers have struggled to adapt to the unique risks posed by NEVs, including higher repair costs and battery replacement expenses. For instance, the average insurance premium for EVs in China was 81% higher than for internal combustion engine vehicles in 2023, yet many insurers still reported combined ratios above 100%, indicating underwriting losses. Cheche's digital-first approach, however, enables dynamic risk modeling and real-time data integration, addressing these challenges through AI-driven tools.

NEV-Centric Growth and AI-Driven Innovation

Cheche's focus on NEVs is paying off. In the first half of 2025, the company processed 810,000 NEV insurance policies, a 135.5% year-over-year increase, with written premiums reaching RMB2.6 billion (US$361.3 million), up 150.6% YoY. NEV-related premiums now account for 22.5% of Cheche's total written premiums, up from 9.3% in the prior year, reflecting its growing market share in a segment projected to expand rapidly. China's NEV fleet is expected to reach 80–100 million units by 2030, with a 30% claim rate, creating a substantial opportunity for Cheche's AI-driven solutions.

The company's technological edge stems from its AI-Driven Intelligent Insurance Tool and anti-fraud claims system, which leverage vehicle telemetry data to improve liability determination and streamline claims processing. These tools are critical in addressing the complexities of NEV insurance, where traditional risk models falter. For example, Cheche's AI algorithms can analyze driving behavior, battery health, and collision data to offer personalized premiums and reduce fraudulent claims-a capability that traditional insurers lack.

Disrupting Traditional Insurers

Cheche's strategies contrast sharply with the challenges faced by traditional insurers. Legacy players are constrained by outdated pricing models and limited data integration, leading to chronic underwriting losses in the NEV segment. Meanwhile, Cheche's digital infrastructure allows it to bypass these inefficiencies, offering cost-effective solutions that align with the needs of automakers and consumers. Its partnership with FAW Bestune, for instance, not only enhances customer convenience but also strengthens its position as a trusted enabler in the automotive-insurance ecosystem.

The broader market is also shifting toward digital channels. Mobile transactions now account for over 62% of new policy purchases in China, a trend Cheche has capitalized on through its user-friendly platforms. By 2030, the motor insurance market in China is projected to grow to USD 171.25 billion, with the vehicle insurance box market-a subset of digital solutions-expected to expand at a 13.28% CAGR according to market research. Cheche's early mover advantage in these segments positions it to capture significant market share.

Global Ambitions and Long-Term Viability

Cheche's disruptive potential extends beyond China. The company has outlined an international expansion roadmap targeting Asia-Pacific, Europe, and Latin America, aiming to commercialize its NEV pricing models and AI tools globally. This strategy aligns with the globalization of China's automotive industry, as NEV manufacturers seek to enter international markets. Cheche's Fintech Solution for Automakers Abroad, for example, is designed to support automakers in aligning with global insurance standards, further solidifying its role as a bridge between Chinese innovation and international markets.

Financially, Cheche has shown signs of improving profitability. Its adjusted net loss narrowed by 56.9% in H1 2025, despite lower fee rates from NEV partnerships. The company also plans to achieve full-year adjusted operating profitability in 2025, driven by cost discipline and revenue diversification according to financial results. These metrics suggest that Cheche's disruptive strategies are not only scalable but also economically viable.

Conclusion

Cheche Group's partnership with FAW Bestune and its AI-driven innovations underscore its role as a disruptor in the digitization of post-sale vehicle services. By addressing the unique challenges of NEV insurance and streamlining digital workflows, the company is reshaping the automotive-insurance landscape in China. Its ability to leverage technology, strategic alliances, and global expansion plans positions it as a key player in a market poised for exponential growth. For investors, Cheche represents a compelling opportunity to capitalize on the convergence of automotive innovation and digital insurance-a sector where traditional players are struggling to keep pace.