2003: Starting with Foreign Trade

Chapter 1035 Is it a loss or is it CEO Tan who suffers?
P.S.: Still asking for a guaranteed monthly vote!
The March car market belonged to BYD and Weilai. BYD ignited the entire market with its Seal, while Weilai whetted the appetite with the L9.

In addition, there was the delivery of the first model in which Chrysanthemum was truly fully involved. Yu Dazui also promoted the delivery figures on various occasions, emphasizing that this achievement far exceeded expectations, and repeatedly stated that Hongtu would become the fastest intelligent electric vehicle brand, attempting to build market confidence.

In addition, Da Zui frequently appeared in offline stores to personally explain the selling points of Hongtu to users, emphasizing Chrysanthemum's technological investment in intelligent technology, electric drive system and other aspects. During a live broadcast at a store in Shenzhen, he said that buying Hongtu is buying the Chrysanthemum experience.

Yu Dazui deliberately downplayed the Seres brand and highlighted the role of Chrysanthemum. Dazui is still very persistent in Chrysanthemum's car manufacturing, which is probably why he chose Seres. How could a large state-owned enterprise like this allow Chrysanthemum to downplay its own brand? They haven't reached the point of being unable to survive yet.

The three companies have fueled market enthusiasm, but in reality, the supply chain was not doing well in March. Tesla's decision to reinstate its discounts was actually a reluctant move.

According to past practices, Tesla should raise prices when production capacity is limited, but BYD and Weilai are also putting considerable pressure on Tesla.

In the domestic market, BYD and Wynn are, after all, fighting on their home turf. Even if affected by special events, their production capacity is much less affected than Tesla, which only has a Shanghai Gigafactory. In a sense, the special events are actually a good thing for Wynn and BYD.

Also, don't forget Geely. Geely's growth rate this year is still very strong, especially the Jike series, which has seen significant growth. This brand can be considered a success.

In fact, Tesla is relatively compliant with regulations in China and Europe, especially in the EU, where Tesla does not dare to adjust prices too frequently. However, in North America, Tesla's home turf, it can raise prices whenever it wants.

From the beginning of the year to the end of March, the prices of Tesla Model 3 and Model Y in North America increased by 2.5% and 4.8% respectively, while the price of Tesla's Full Self-Driving (FSD) rose even more dramatically, from $10,000 at the beginning of the year to $15,000, an increase of 50%.

"Sometimes I really envy Tesla. They have almost a monopoly in the North American new energy vehicle market, with no competitors."

The shutdown of Aptiv's Shanghai factory has significantly impacted WIL's production capacity. In addition, WIL also has its own battery factory in Shanghai, which, like Tesla, is on Shanghai's production whitelist. Nevertheless, the impact is still considerable.

Tesla changed from a two-shift system to a single-shift system, and the same applies to the Shanghai factory.

"Absolutely, Tesla is doing incredibly well in North America."

Wei Lai's decision to maximize ET5 production capacity and focus on the domestic market made Boatman a little nervous. Just like Tan Jincheng had done at the last press conference to gather information, he also called Tan Jincheng.

The two chatted casually, noting that the competition in the domestic car market was extremely fierce, as was the European market, while the situation in North America was completely different.

In the first quarter, Tesla sold a total of 112437 electric vehicles in North America, accounting for 72% of the entire North American market. Ford, which ranked second, delivered only 7407 vehicles. The difference is significant.

With a market share exceeding 70%, Tesla can't just raise prices whenever it wants.

"By the way, how's your lawsuit with Tesla going?"

In the European market, the antitrust lawsuit between Wright and Tesla has lasted for more than five months. To be honest, this lawsuit is nonsense, designed to slow down the progress of both parties, and in reality, it has not had much impact on either of them.

Tesla and Wei Laiye maintained a tacit understanding, not escalating the situation. They would occasionally stir things up, but in most cases, they would continue with their business as usual. However, it was indeed time to resolve the issue.

"We've already decided to reach a settlement, and it should be done around next month."

Musk's recent focus has been on acquiring Twitter. After secretly buying Twitter shares starting in January, he filed a document with the SEC on April 4, announcing that he now owns 9.2% of Twitter's shares.

With a 9.2% stake, Musk is already Twitter's largest shareholder, and Twitter's stock price surged 27% that day. On the 5th, Twitter CEO Agrawal invited Musk to join the board of directors on the condition that he would not hold more than 14.9% of the shares.

Musk rejected the offer, hinting that he might seek complete control. Less than ten days later, Musk formally proposed to acquire Twitter in an all-cash deal for $54.20 per share, totaling approximately $440 billion.

"That's true, this guy probably doesn't have the energy to fight a lawsuit with you right now."

Acquiring a highly influential global social media platform for $440 billion is an enormous undertaking, and Musk will undoubtedly focus his energy on it.

"That's right. Speaking of which, this old guy seems to be a bit mentally unstable this year."

In early 2022, Musk seemed to be in a state of high excitement. In January, he posted a picture on Twitter of himself sleeping on the floor of the Texas Gigafactory and announced that he would be working 120 hours a week.

His outrageous remarks on social media are increasing. According to Tan Jincheng's analysis, this guy has some degree of depression, which is probably caused by too much pressure.

The newly appointed old man doesn't get along with Musk, and Tesla is excluded from the BG Electric Vehicle Summit. It's terrifying that an electric vehicle company with a market share of over 70% can't get government support.

In a sense, Musk's acquisition of Twitter was also an attempt to find some protection for himself. Owning a highly influential social media platform would be a form of protection for both Tesla and Musk himself in the North American environment.

When Musk focuses his energy on other things, it's actually a good thing for competitors like them.

"By the way, when exactly will your seals be delivered?"

It has been almost a month since the Seal was launched, but BYD has not yet confirmed either the price or the delivery time. According to third-party statistics, the Seal has accumulated more than 5 orders within a month of its launch.

Based on their usual pace, BYD should be announcing the price and specific delivery time by now, which is a normal delivery schedule.

However, BYD has not taken any action so far, which is obviously abnormal. There is only one possible reason for this: BYD's delivery has encountered problems.

"Well, late August or early September, I guess."

The boatman sighed and said that although Tan Jincheng was not a professional in the automotive industry, he had been in the industry for more than ten years. He had participated in the entire process from R&D technology to the industrial chain and production. It was no exaggeration to say that he was a semi-expert.

This matter definitely couldn't be kept from them.

"Huh? So long?"

Tan Jincheng was also taken aback. It was released in March, but it took half a year to deliver. This is the production capacity of a new force. It seems that BYD's production capacity is indeed very tight.

Of course, it is also related to the current special circumstances. Although the problem occurred in Shanghai, the impact on the whole country is still very large, and people like them have been subject to certain restrictions on their actions.

Taking Shanghai as an example, it is now very difficult for him to inspect factories, and the Beijing Auto Show, which was scheduled for the end of the month, has been postponed to September.

Throughout April, large-scale offline events, forums, and conferences were either postponed or canceled altogether.

"Yeah, now I finally understand the pain Musk felt when the Model 3 was sold out."

Hybrid vehicles experienced a boom last year, with BYD being the biggest beneficiary. Today, BYD practically represents hybrid vehicles in China, with the Qin DM series and Tang DM series selling exceptionally well.

However, to a certain extent, BYD's production capacity cannot keep up. Unlike Tesla and Tesla, which invest heavily in upgrading their production lines and achieving high automation rates, BYD's production model is relatively traditional.

From the very beginning, BYD has relied on a massive workforce, using cheap labor to boost production capacity. The saying "hand-operated production lines" is not just a casual remark. After 20 years, BYD's desire to increase automation rates is not so simple.

This is why BYD keeps building factories and its workforce is growing. By the end of last year, BYD had 22 employees, and its recruitment plan for 2022 was quite ambitious.

This kind of workforce strategy is very advantageous for companies in the early stages of cheap labor, but with the changing employment environment and rising labor costs, it can cause some problems for these companies.

In the early days of Wei Lai, there were also ideas for artificial naval warfare. At one point, the recruitment scale expanded very rapidly, but it was quickly corrected. Tan Jincheng knew that this model was unsustainable.

BYD has long been criticized for its poor employee treatment, which is somewhat of a last resort. Their salary expenditure is much higher than that of most companies. At BYD's rate of expansion, their total number of employees will exceed 50 by next year.

With a total of 50 employees, this scale is still quite terrifying among private enterprises, and the social security expenditure for just one month is an astronomical figure.

“This is truly a happy trouble.”

Tan Jincheng stroked his chin and said, "BYD's production capacity is having problems, and the Seals are being delivered late. This is actually a good thing for the ET5."

With a quick glance around his eyes, Tan Jincheng laughed and said, "Uncle, you can't blame me for this."

In normal market competition, Tan Jincheng never hesitates to act decisively.

"What are you up to, kid? You're not going to pull some dirty trick again, are you?"

The boatman's heart skipped a beat; his worst fears had come true. He had made the call today to try and build rapport with Tan Jincheng and see if he could persuade the other party to "go easy on him."

With April almost over, the issue of the seals' production capacity could not be kept from Wei Lai. In fact, when Wei Lai was maximizing the production capacity of ET5, he had already guessed that Wei Lai would retaliate.

"Hehe, don't worry about that, there's definitely no underhanded tricks involved."

The implication is that Wei Lai will definitely not stop using normal market methods. With production capacity at full capacity, the Seal has given the ET5 a four-month window, which is an extremely positive development.

"But don't worry, I won't lower the price." The starting price of 21.98 yuan is already cheap enough. Even if the price of the Seal is lower than that of the ET5 after it is launched, as long as the difference is not too significant, the Weilai is qualified to be expensive. In terms of brand high-end image, the current Weilai is superior to BYD.

"That's good. As long as you don't lower the price, there's no need to lower it. In the current situation, new energy vehicles are not hard to sell, so you don't need to lower the price."

That's true. Even in March, when car manufacturers collectively raised prices, and now, the sales of new energy vehicles have not decreased. BYD Dynasty and Ocean models have all increased in price by 3000 to 6000 yuan, but orders are still increasing.

The promise from Tan Jincheng that the price wouldn't be lowered was enough to put his mind at ease. If the ET5 really did drop in price, he would have to resort to some off-the-ground tactics.

However, in terms of background, Wei Lai is not bad either, which will really be a headache.

If the ET5 is significantly reduced in price, Sequoia will be in a very awkward position. As a strategic product, Sequoia is meant to establish itself in the B-segment pure electric sedan market, and a price reduction for the ET5 would disrupt their strategic balance.

Whether to follow suit or not is a matter of debate. If we follow suit, then the strategic importance of this model is meaningless. If we don't follow suit, then sales will be ruined, and the strategic importance of this model will also be meaningless.

"Don't worry, I'm not that naive. The market is good right now, so there's no need for us to start a price war."

Price wars are everywhere, but in an upward market, initiating a price war is not beneficial to oneself. Although it may hurt competitors, it will also cause great losses to oneself. It is a case of killing a thousand enemies while losing eight hundred of one's own.

The future trend of the new energy vehicle market will definitely be dominated by a few large companies, but the existence of small and medium-sized enterprises is also needed to maintain vitality. Now that Weilai has taken its place at the main table, there is no need for it to actively start a price war.

"Speaking of which, you're quite kind-hearted, so it wasn't in vain that I swallowed my pride and made this call for you."

In public, the boatman always addressed Tan Jincheng as "President Tan," showing him respect. In private, the two had a good relationship, so they didn't care so much about how they addressed each other. This was also the case with several other close colleagues in the car industry.

"You're speaking too soon."

A few days later, the boatman realized that he had spoken too soon. Regarding the May Day promotion, Weilai did not have the large-scale promotional activities for its various models as in previous years.

However, the力度 (intensity/effort) for ET5 is relatively higher; in addition, Weilai has also developed a special plan for seal order users.

Take the seal order to ET5 and we'll return it to you on the spot, regardless of whether it's refundable or not.

"President Tan's move is really underhanded."

BYD and the Seals team must be heartbroken. The blind order amount for Seals is 2000 yuan, which is not much, but with a delivery time of several months, some users are indeed too lazy to wait any longer.

This is the pain point for most models that cannot be delivered. Among the so-called large and small orders, a portion of the orders will inevitably be lost, including those for Weilai.

The ET5, Maodou3, and Haibao are all pure electric vehicles, each with its own advantages. With full production capacity, the delivery time is at most four weeks. Instead of waiting for Haibao, it's better to spend some time waiting for a reliable ET5.

As for the Model 3, Tesla's Shanghai factory experienced a production halt of up to 22 days, the longest such halt since 2019. It is estimated that Tesla will lose 50,000 to 60,000 vehicles of production capacity.

Throughout April, Tesla delivered only 1542 vehicles in the Chinese market.

On the surface, Tesla has resumed discounts, but in reality, it's a disguised price increase. Given the production capacity and inventory of the Shanghai factory, even with the losses, it shouldn't be delivering only 1500 vehicles a month.

Tesla will continue to export more models to Europe to maximize profits.

In March, BYD and Weilai collaborated on the marketing of the Seal and ET5 models. In May, with the delivery of the Seal delayed, the ET5 set its sights on the Seal's orders.

This contrasting behavior adds a lot of fun to the car market.

"The 2000 yuan will be refunded on the spot, and ET5 is also a good choice."

The boatman was also very generous, and in an interview, he spoke very magnanimously about the special marketing plan that ET5 had developed for seal orders.

In March, Tan Jincheng personally drove a Seal car in a promotional video, which was captured by a car reviewer. The collaboration between the two companies benefited them more, as the images of Tan Jincheng driving the Seal car virtually went viral during that period.

According to statistics from BYD's data department, after Tan Jincheng cooperated with the promotion, the search volume for "Seal" on Baidu and Douyin showed an explosive growth. In terms of personal IP, the effect of Tan Jincheng's one "product promotion" even exceeded their promotion volume for half a month.

This time, Tan Jincheng let him off the hook, even though he was acting from his own self-interest.

The internet industry's favorite thing to do is to seize the market without regard for the consequences. Tan Jincheng has an internet gene in him. With Weilai's current scale, if it were to seize the market without regard for the consequences like internet companies, no car company could withstand it.

Despite the impact of special events in April, the ET5 still achieved a good result of more than 7000 units with full production capacity.

Based on Weilai's current promotional efforts and the transfer of some Seal order users, the delivery volume of ET5 in May is very likely to exceed 10,000.

Another pure electric vehicle with monthly deliveries exceeding 10,000 units demonstrates WILTE's continued strong advantage in the pure electric vehicle market, making it difficult for any domestic automaker to challenge its position in the short term.

Meanwhile, Li Xiang also brought good news to Tan Jincheng: the data after the blind pre-orders for the Weilai L9 were also quite good.

There are still many wealthy people in China.

Within 72 hours, blind orders exceeded 10,000, and the entire blind order period saw 30,000 orders, with deposits alone reaching 150 million yuan. Damn it.

Wealthy people aren't fools. As the flagship model of the L series, the L1 already sells for over 30 yuan, let alone a full-size SUV. No matter how cheap the L9 is, it can't be priced below 40 yuan.

For a car priced over 40 yuan, 3 people placed orders based on just the exterior design and some of the features.

"It really is just as Mr. Yu said."

A few days ago, the outspoken CEO publicly declared that range-extended electric vehicles are the most suitable new energy vehicles for China's conditions. This guy is really going all out to sell cars. However, the delivery of the X5 is really good. In April, it achieved a delivery volume of 3245 units, showing steady growth.

Based on this trend, with a small promotion in May, the monthly delivery volume of the X5 is very likely to exceed 5000 units.

In terms of purchasing power, chrysanthemum fans are truly unmatched; it would be a lie to say I'm not envious.

"Haha, listen to his bullshit, but range-extended electric vehicles do sell well."

Li Xiang was also in high spirits. Da Zui was the one who argued with him the most. The two were mainly active on Weibo. In April, in order to boost sales, Da Zui implied that Wei Lai's range extender technology was outdated and not as good as Ju Hua's range extender.

Li Xiang also bluntly stated on Weibo that he should first achieve monthly sales of over 10,000 units before discussing anything else. His criticism of traditional gasoline-powered cars, stating that buying a gasoline-powered car is like buying an antique car, drew criticism from major traditional car manufacturers and gasoline-powered car users.

Even BYD, which has completely stopped producing gasoline-powered cars, couldn't stand it anymore. The boatman came forward to respond that gasoline-powered cars can coexist with new energy vehicles.

He also frequently clashed with He Xiaopeng and other car companies.

"Pay less attention to him in the future, and don't bring him any traffic."

April was the blind pre-order period for L9. Even Tan Jincheng couldn't stand Da Zui's style of belittling Wei Lai. It was like blocking someone's path to wealth, so he didn't stop Li Xiang from retaliating.

"I know, I'll try to ignore him in the future."

Li Xiang nodded. The logic behind Da Zui's provocative marketing was clear: by belittling competitors and highlighting Chrysanthemum's technological advantages, he could attract media and user attention and increase the X5's popularity.

However, some of the remarks were indeed offensive.

"The best way is to ignore him, and that's not just for us."

Tan Jincheng has quite a few friends in the automotive industry. Although there are rumors that BYD is currently in a full-scale cooperation with YOYO regarding intelligent driving solutions, there is still a high probability that Tan Jincheng could persuade Brother Chuanfu to ignore Big Mouth.

It wouldn't be difficult for Tan Jincheng to persuade others like He Xiaopeng and Li Bing.

In the extended-range electric vehicle market, even though the Hongtu X5 is priced completely differently from the L1 and the newly released L9, the Weilai is still Seres' most direct competitor. Da Zui has indeed made quite a few comments about the Weilai recently.

"After the X5, there will be the X7 and X9. Chrysanthemum will definitely be aiming for the high-end market. There will be more and more competition between you in the future. Giving it screen time every time is actually helping it succeed, but there is no need for that."

"That's true. Looking at it this way, we really have a lot of competitors."

Looking around, Tesla and BYD are the main competitors of the company. Strictly speaking, China is not qualified yet, but who knows what the future holds? If the range-extended electric vehicle does well, it will definitely enter the pure electric vehicle field.

(End of this chapter)