2003: Starting with Foreign Trade

Chapter 1021 From Automaker to Energy Service Provider

"Yes, there is such a plan, and Xiaopeng can be given priority if he wants to connect."

The charging pile opening plan of Weilai has actually been piloted, but not in China, but in Europe. The opening policies for charging piles in Europe and the United States are somewhat different from those in China.

While Europe currently has no strict regulations, it does have some requirements regarding the compatibility of newly built supercharging stations, while North America also has requirements for charging stations that are eligible for subsidies.

In November, WILAY launched a pilot program in the Netherlands, opening 10 supercharging stations to non-WILAY electric vehicles. Users need to download the WILAY APP and pay a fee every day. Starting from the Netherlands, the program will gradually cover the four Nordic countries, France, Germany and other European countries.

As for North America, Weilai does not have its own complete vehicle business, and therefore has not ventured into the charging pile business.

In China, a pilot program for opening up charging stations will begin in 2022. Besides Tesla taking the lead, other companies like Tesla and BYD also have plans to open up charging stations, which is an inevitable trend.

The underlying strategic motivation, besides avoiding potential future policy issues, is also to increase revenue. Weilai's charging business has a gross profit margin of over 30%, which is much more profitable than selling cars. Revenue is expected to double after the business is launched.

Rather than waiting for policies to force them to open up, like Tesla is doing now, it's better to proactively plan ahead. This way, they can do better and it will be easier to promote their products and services.

For Wei Lai, opening up charging stations is generally more beneficial than harmful.

First and foremost, it can mitigate policy risks, which is the most important factor. Without policies, there would be no such thing as a tram. Secondly, it can increase income. These two points are the most important for trams, as a lot of the money they make actually comes from inconspicuous places.

For example, charging is definitely one of the most profitable businesses in the electric vehicle sector. This also includes Li Bing's battery swapping, public charging piles, and mobile charging services. In addition to battery swapping and battery leasing businesses, Weilai has ventured into all three core businesses except for public charging piles.

This brings us to Lifan Motors. Although Lifan Motors is not very good at making cars, it has done quite well in the charging pile business. In addition to continuously building its own supercharging stations, the fastest expansion of its charging business was completed during the first transaction with Lifan.

Today, Weilai Charging's business belongs to Weilai Technology.

Besides the charging business, the revenue from the automotive hardware modification, parts, battery optimization and recycling, software and data services, derivative services and peripheral ecosystems is also very considerable.

Of course, the most profitable business segments at present are still charging operation, battery recycling and software subscription. For companies with the capacity, it is the best time to expand into integrated photovoltaic, energy storage and charging, battery cascade utilization, autonomous driving subscription and other businesses.

Meanwhile, some shrewd individual entrepreneurs have already started businesses such as cooperative operation of charging stations, portable charging equipment, and electric vehicle repair.

As the saying goes, the most money is often made in the places that are not visible. In the early stages of the electric vehicle boom, niche markets were the business segments that could generate quick profits.

In addition to these, another potential benefit is that it can attract non-Weilai car owners. After experiencing the supercharging speed, they may become Weilai users. By linking payments through the Weilai APP and accumulating user data, Weilai can achieve ecosystem synergy and gain a better understanding of the charging habits and vehicle models of users of other models.

"President Tan is truly bold, daring to make such a decision at a time like this."

He Xiaopeng sighed. Weilai's initiative to open its charging stations to other car companies and provide charging services seems to benefit Weilai a lot, but it is also beneficial to other car companies.

Currently, Tesla and WTI have the most charging station deployments globally, and only these two companies have the capability to open up their charging stations. Compared to Tesla's cautious approach, WTI is taking the initiative to be a pioneer.

Everything has two sides; if something brings benefits, there will definitely be drawbacks.

To achieve openness, Weilai must first address technical compatibility. The inability of non-Weilai vehicles to charge at full power will result in power limitations. Additionally, there is protocol incompatibility, just like with mobile phone charging cables; not one cable can charge all mobile phones.

In reality, the competitive barriers have weakened the differentiation advantage. WILRA's self-built supercharging network is one of WILRA's selling points. Once it is opened up, its technological leadership will be diluted. Furthermore, the user experience will be diluted and the risk of queuing for charging will be increased.

Due to battery management limitations, the charging speed of non-Wulai vehicles will definitely be slower, which will certainly have a certain impact on the user experience, causing dissatisfaction among car owners, and also increasing the waiting time for Wulai car owners.

The decline in brand exclusivity and the fact that supercharging stations were once exclusive benefits for Weilai car owners will inevitably be affected once they are opened up to the public. This could very likely lead to the loss of Weilai's high-end users, and each of these points represents a potential risk.

"There are definitely risks, but opening up will be very beneficial to us and the entire automotive industry, so we should still do it."

For small and medium-sized enterprises like Xiaopeng Motors, opening up their charging stations to their car owners at this moment can alleviate their anxiety about charging as quickly as possible.

Without the need to build their own supercharging stations, they can simply focus on selling cars, which reduces their R&D and infrastructure costs and improves the user experience. Weilai's charging technology has a good reputation in the industry.

Of course, there are also downsides, namely, increased dependence on WIL, the control of charging costs and user data, the dominance of technical standards by WIL, and a decrease in the value of self-built charging stations.

However, these are things that they cannot refuse, and users cannot refuse either. If Wei Lai unilaterally opens up the charging pile business, even if they want to resist, users cannot refuse such a good thing.

Unless they can quickly build more supercharging stations than Wei Lai, but that is clearly impossible.

By opening up its charging stations, Weilai is transforming itself from a car manufacturer into an energy service provider. The status of the Weilai app will also rise further, playing a role similar to Apple's App Store.

In addition, there is another benefit: paying for charging fees through the Weilai APP not only allows for the collection of more user data, but also helps promote its own Orange Payment.

OrangePay has been developing for many years, but it hasn't achieved the large-scale promotion of Alipay and Tenpay. Unfortunately, Orange Group doesn't have the inherent advantages of companies like Alipay or Tencent, so its market share is inevitably limited.

However, they have accumulated a user base over the years, and this time, with the opening of the Captain's charging station, they are able to attract another user and increase their market share.

"Xiaopeng Motors will definitely cooperate actively. We will send people to contact Weilai Technology and strive to be among the first to connect to Weilai charging stations."

He Xiaopeng is ambitious, but he can also recognize reality. Since he has already boarded the ship of Weilai, given his limited strength, he might as well stick with the big boss. Xiaopeng Auto has developed well this year, but it also has many problems.

Right now, sales volume is their primary goal. Selling 100,000 vehicles a year is just the survival line for a car company. There is still a long way to go before they can achieve profitability. Selling cars is the most crucial thing. As for the rest, we can talk about it later.

Furthermore, the threat that Wei Lai poses to other car companies by possessing this charging data is not as great as imagined. It's not core data, and there are many public charging stations in China that have been leaked quite a bit.

"Thank you, Mr. He. Our plan is to start the pilot program in the first quarter of next year."

At the Guangzhou Auto Show, all the major automakers put on a show, and as an industry leader, Weilai was naturally not going to remain silent. Its previously released autonomous driving technology, battery technology, and concept cars took turns to appear, showcasing its advantages and attracting consumers.

However, for the industry, the biggest move by Weilai was not these superficial marketing tactics, but the statement made by Weilai's chairman during the Guangzhou Auto Show that Weilai would open its charging business to other car companies in April 2022.

Tan Jincheng announced that a pilot program for charging non-local vehicles will be launched in 10 cities, including Beijing and Shanghai. The first batch of 12 supercharging stations will be opened, and the pilot program is planned to be expanded to about 50 supercharging stations nationwide by December 2022.

"If everything goes according to plan, by the end of 2022, the total number of supercharging stations we have opened will account for about 5% of the domestic supercharging capacity. We will announce the specific opening process later."

"One point to note is the vehicle compatibility requirements. For open vehicles, a GB/T national standard interface is required, or it can be compatible via an adapter. Due to current technological limitations, there will be certain limitations on charging power."

The power of a car charger can usually reach 250KW, while the charging power at a charging station is usually limited to 60 to 120KW. There are indeed technical limitations, but they are more or less just an excuse.

Everyone knows this unspokenly: if you're not a car owner from Weilai, you definitely won't be able to enjoy the same services.

"In 2023, we plan to open 15% of our supercharging stations to make it more convenient for electric vehicle owners and allow them to recharge without any worries."

A single stone stirs up a thunderclap.

Wei Lai's decision has changed the industry landscape, and the capital market was the first to react. On the night Tan Jincheng announced the opening of charging piles, US-listed new energy vehicle companies all experienced varying degrees of decline.

Tesla and Wenjie were the most affected by this decision. Tesla fell by more than 4% that day, while Wenjie plummeted by more than 11%. These two companies were the automakers most affected by this decision.

In particular, Wenjie believes that Li Bing's battery swapping model is, in a sense, an attempt to become one of the two giants in the electric vehicle industry. Li Bing has also promoted his model in public on more than one occasion, using the term "charging" to refer to his electric vehicle.

Linking the terms "charging" and "refueling" together can gain user understanding regarding energy replenishment, but all of this is predicated on the inconvenience of energy replenishment for small and medium-sized car manufacturers.

"Wei Lai's move can be said to have killed Li Bing. His battery swapping model has been dealt a heavy blow. No wonder Wei Lai started to reduce his holdings of Wenjie's stock. If we're talking about ruthlessness, President Tan is the most ruthless." "There are no true friends in the business world. This guy was still calling me 'Brother Bing' at the dinner table just a couple of days ago."

"Haha, I can only say that President Tan is becoming more and more mature, which is a good thing for us."

Shen Nanpeng, who had just met with Tan Jincheng two days ago, saw the news at the airport. As a globally renowned investor, he understood all too well the significance behind Wei's visit and admired Tan Jincheng even more.

The increasingly mature Tan Jincheng, who can distinguish between personal relationships and business competition, is only beneficial to Shen Nanpeng himself and partners like Hongshan.

The battery swapping model is inherently controversial, and Li Bing is indeed controversial, but the fact that he was able to promote such a controversial model is enough to prove his ability. However, this ability is only possible when there are few external factors.

Electric vehicles produced by various small and medium-sized car companies used to be very popular, but they quickly declined, mainly due to inadequate service, including charging services. This was the biggest driving force behind their promotion.

However, if Weilai opens up its charging stations, other car companies will have one less major concern, and customers who have purchased their vehicles will have fewer worries. Just look at Xiaopeng Motors, the first company to announce its response. Other car companies with charging businesses were affected and their stock prices fell, while Xiaopeng Motors' stock price rose against the trend in the US stock market.

Indeed, after Tan Jincheng announced the opening of charging stations and He Xiaopeng responded on social media, the number of potential customers and inquiries about purchasing the car increased slightly in the first ten cities where charging stations were opened.

"Right now, other companies have no choice but to follow suit."

Wei Lai's decision is likely to trigger a chain reaction in the industry. It is a revolution in charging, and companies such as BYD, Tesla, and other small and medium-sized vehicles must choose the right time to open some charging stations.

Otherwise, they will be criticized by the public as closed and selfish. Some charging operators are also under considerable pressure, as they must accelerate integration to avoid being marginalized by car companies' networks.

On December 1st, Weilai officially announced the specific locations of supercharging stations in 10 major cities where charging piles will be available, as well as the opening rules and fees.

The first batch of compatible models includes popular models such as Tesla, BYD Han EV, Xiaopeng P7, BMW iX3, and Volvo XC40, as well as second-tier emerging brand models such as Nezha S and Leapmotor C11.

The open rules and fee usage process have also been announced. Simply download the Weilai APP, register an account and bind your vehicle, select charging for non-Weilai vehicles, and scan the code to start the charging station.

The pricing is based on electricity cost plus service fee, approximately 1.5 to 2.5 yuan per kilowatt-hour, which is 20% to 30% higher than that of Weilai Car Charger. This is understandable, as it is acceptable to choose a more expensive competitor if there are no supercharging stations in your area.

At the same time, the higher price is also a way for Weilai to give its competitors some time window. Apart from these, Weilai has no other restrictions, no membership is required, it is pay-per-use, and there are no subscription discounts, etc.

For car owners, it's just a matter of downloading an app and linking a bank card. The pay-per-use method is reasonable, without any complicated charging models, which is consistent with Wei Lai's usual style.

This initiative was welcomed by some non-Weilai car owners, but it sparked considerable controversy among Weilai car owners, especially those in the first ten cities where the initiative was launched.

In response to the controversy surrounding his users, Tan Jincheng also publicly addressed the issue on Weibo, offering a solution to appease them.

The app's real-time queuing system, with its visualized waiting time and push notifications of nearby alternative stations, allows users to plan their time more effectively.

In response to the potential increase in queuing time, Weilai's compensation method for its users is to provide a free 50km supercharge credit for queuing times exceeding 15 minutes, which can be used next time.

In its emergency response plan, Weilai also has a program to compensate car owners with vouchers for charging failures caused by incompatibility issues with non-Weilai vehicles. In addition, there are membership programs and exclusive benefits for its own car owners.

Weilai is well-prepared to open up its charging station business.

Wei Lai's intentions are clear, and other companies will not sit idly by. Wei Lai just announced that the first batch of pilot models includes the entire Tesla series, and Tesla owners received OTA upgrade information in a very short time.

Tesla did not specify the purpose of this upgrade, only referring to it as an optimization of the charging system. However, the technicians at Weilai discovered that Tesla was using an OTA (Over-The-Air) update to prevent Tesla vehicles from using non-Tesla charging stations.

"Haha, that's normal. It would be abnormal if a Tesla didn't respond."

When the technical department was reporting, Tan Jincheng laughed and said that such cases were not uncommon. Apple had previously restricted the functions of third-party accessories, and this was actually the best way for other car companies to retaliate.

If everyone did what Tesla did, then the so-called open charging stations would become a joke. However, doing so would also offend car owners, and only powerful companies like Tesla and Apple would dare to do this.

Tesla has not made any statement regarding OTA upgrades for domestic users, only quietly removing Tesla from the first batch of vehicle announcements. However, this change did not escape the notice of netizens.

Suddenly, rumors began to circulate.

"Domestic markets are not our main battlefield; our main battlefield is Europe. I would like to remind Mr. Yu to pay attention to public opinion in Europe."

If it were the North American market, Tan Jincheng would naturally not dare to be the first to try something new. In China, however, policies, public opinion, and media are all on Wei Lai's side, so Tesla's little tricks don't need to be taken seriously.

However, Tesla doesn't really need external charging stations. Tesla already has a large number of charging stations, and their Supercharging technology is world-leading, so the impact on Tesla owners is relatively small.

Domestically, Tesla has a clear advantage, while North America is dominated by Tesla. The main battleground for both companies is in Europe. Whether it's the power battery factory, the acquisition of Ford's factory, or the construction of the distribution network, all are aimed at the upcoming competition.

The same applies to battery swapping.

Although Tesla is not as strong as before after the public opinion storm in April, Musk is still Musk, and the essence of Tesla will not change.

In the European market, tech media and Tesla KOLs quickly began to hype up the issue, using video analysis from a large number of Tesla-friendly media outlets and their own KOLs to focus their attacks on the compatibility problem.

Tesla's official forum also unusually pinned a topic titled "Why Open Charging is a Step Back for the Industry." The post appears to have been made by a Tesla user, but it was actually pushed by Tesla's supporters.

"Hilarious. Tesla itself was also planning to open up its charging infrastructure to grab market share, but now Wei Lai has beaten them to it, so they're resorting to this tactic."

From the perspective of non-Tesla users, Tesla's move is somewhat amusing. Open charging is a topic of discussion in several major new energy vehicle sales regions, and policies are also leaning towards this direction.

"Let's guide it towards resource integration and avoiding waste, linking it with environmental protection."

In the mobile phone industry, the standards for charging accessories have been debated for many years. Although they are not yet fully unified, there has been a lot of progress compared to the past. Europe's correct concept of environmental protection is timely, and there is absolutely no problem in guiding it in this direction.

In terms of economies of scale, apart from North America, Tesla and Wray are neck and neck. Tesla is also preparing to announce its pilot program in the four Nordic countries at a suitable time. Wray's move to take the lead has indeed caught Tesla off guard.

It all boils down to a battle of standards. Once the Wynn standard is promoted, it will pose a great threat to Tesla's charging business. Wynn's plan has also sparked a lot of discussion in Europe.

However, behind the discussion lies the helplessness of Europe's old industries. In the era of rapid development of new energy vehicles, these were the projects that they proposed and promoted first, but they did not develop as they expected.

Despite Europe's advanced automotive industry, subsidies comparable to those in China, and stringent environmental regulations, no influential new energy vehicle has emerged.

While the world is discussing Tesla and Musk, Wei Lai and Tan Jincheng, Maodou 3, Maodou Y, ET5 and Exeed S01, it is the continuous underperformance of BBA in the new energy transformation and the decline of old European industries.

Both sides went all out in guiding public opinion, and neither could gain a temporary advantage. Tesla's quiet OTA updates also sparked huge controversy in China. Compared to Europe, this place is a battleground for public opinion.

Since the protests in April, Tesla has suffered a significant impact on both sales and reputation. The matter is still controversial, and Tesla's actions, which were already at a disadvantage in terms of public opinion, are seen as a sign that it can't afford to play games.

"American companies are all the same. First it was Apple, then it was Tesla. They all use the same tricks."

The de-enchantment of joint venture brands is accelerating further with Tesla's quiet OTA updates. It is said that when the top two fight, the third one suffers. Now, in the battle between Tesla and Tesla, the first to suffer is the leading brand of traditional gasoline vehicles.

In November, sales of traditional gasoline vehicles declined by 15%, with joint venture brands experiencing an overall sales decline of 23% and Japanese brands a 24% decline. Mitsubishi Motors, once a leader in the industry, sold only 3000 vehicles in November, a 50% drop in sales.

It was at this time that Yutaka Nagasawa, president of Mitsubishi's ZG region, approached Tan Jincheng.

(End of this chapter)