2003: Starting with Foreign Trade

Chapter 1080 Breaking the Unspoken Rules

There are only two reasons why a niche market might reach a point where almost no manufacturers are releasing new cars.

First, this niche market has limited space and limited profits, so most manufacturers don't even look at it. Second, it's dominated by giants, which makes many manufacturers hesitate to enter.

Clearly, the A0-class car market is the last category. In terms of deliveries from January to April, Weilai alone accounted for 53.68% of the A0-class market share, while the remaining three companies, BYD, SAIC MG, and SAIC-GM-Wuling, together accounted for about 33% of the market share.

These four companies have divided up more than 86% of the market share and are so powerful that other manufacturers simply cannot compete.

Prior to 2021, the A0-class sedan market was dominated by gasoline-powered vehicles, primarily by SAIC MG, with a low proportion of new energy vehicles and a relatively limited overall market size.

However, with the successive launches of Dolphin and Star Wish, the A0-class market was also activated, and the proportion of new energy vehicles also increased rapidly. Although Dolphin was crushed by Star Wish, it has to be said that this segment market was heated up by it.

Although the dolphins were defeated, this was only a strategy against BYD.

After experiencing a chaotic period of price reductions less than two months after its launch and premature model changes, which offended a large number of new and old car owners, the Dolphin's cost-effectiveness has been recognized by the market as time goes by and consumption becomes more rational.

Currently, the Dolphin's sales are stable at around 10,000 units, so it can't be considered a failed model; the profit margin is still acceptable.

While Dolphin may not be able to dominate the market today, it is still thriving and holds the second-largest market share in the A0-class sedan segment, with an expected annual sales volume of 12 to 15 units.

For the Dolphin, BYD has changed its strategic planning. It is no longer planned as a strategic product. After reducing production capacity, it is produced as a normal product. It is also a high-volume model in BYD's product matrix and has a high status.

Just as Wuling dominated the A00-class market, once Xingyuan dominated the A0-class market, other models really didn't have many opportunities. Once a dominant advantage is established in this segment, as long as you don't do something stupid, you can almost sweep through the market.

Just like Zhidou, although it was saved by Wei Lai, it is almost impossible for it to challenge the position of Wuling Hongguang MINI EV. Similarly, with Xingyuan's current performance advantage, it is almost impossible for it to challenge its position.

It's not just BYD; Geely's A0-class sedan is the same. When they were planning internally, they also wanted to enter the market and grab a share after the Dolphin brand had hyped up the market. However, Weilai beat them to it and even achieved a dominant position.

The R&D costs invested in the planned models cannot be simply abandoned. They will still be launched. As for how much market share they can gain, that depends on the situation.

Inevitably, we'll still have to compete with gasoline-powered vehicles for market share.

Tan Jincheng's email to all employees did not generate much public attention. The launch of the SU7 will definitely require a large investment in marketing expenses. At this time, they are sprinting to increase production capacity, which is also the peak of Lei Jun's reputation. No company can take advantage of their popularity at this time, and Xiaomi will not allow this to happen.

Weilai doesn't care about trending topics anymore. As a national brand, trending topics are just icing on the cake for Weilai. Whether they are there or not makes little difference. If a leading enterprise still needs to create marketing like Xiaomi to sell its products, then it can only be said that it is not worthy of its name.

However, Tan Jincheng's email to all employees still sparked considerable discussion within the industry, demonstrating that the actions of leading companies have a significant impact on the industry.

"I have a feeling this isn't going to be anything good; this guy is probably up to something again."

Those familiar with Tan Jincheng in the industry were somewhat apprehensive after analyzing the all-staff email that was jokingly referred to online as the "Ningbo Declaration." Wei Lai hadn't made any major moves this year and had stated publicly that the focus this year was on consolidating the achievements of last year.

The models launched by Weilai this year are mostly supplementary to the product matrix, with not many mainstream models. However, no one is really at ease that Tan Jincheng won't cause trouble.

"Do you really want to do this?"

Zhou Ao was the one who asked the question. Although he hesitated for a moment, his eyes were filled with excitement. Li Xiang, who was standing next to him, had a similar expression to Zhou Ao. However, Wang Fengying and Hu Zhengnan both had wry smiles on their faces.

"This is considered breaking the industry's unspoken rules; it's like killing a thousand enemies while losing eight hundred of your own."

"It's not quite 800 damages, maybe 300 to 500."

Indeed, Tan Jincheng is trying to stir things up, or rather, he wants to accelerate the progress of certain events, such as legislation on intelligent driving. He has been advocating for such legislation for the past two years.

The advertising for intelligent assisted driving is becoming increasingly exaggerated, and various companies are also promoting their so-called competitive configurations. However, there are actually many hidden tricks involved, which are tacitly understood by everyone and can be considered one of the industry's unspoken rules.

Consumers familiar with the mobile phone industry should know that, for example, the same CPU can have several different versions. The same is true for automotive chips.

Taking NVIDIA's Orin chip as an example, there are three types, including X, Y, and N, which mainly differ in computing power. A single Orin X chip can reach 254 TOPS of computing power and is the main chip for advanced intelligent driving.

The mid-range Orin Y has a computing power of around 200 TOPS, while the lowest-end N series generally has a computing power of only 70 to 85 TOPS. For the same model, different versions of these three have a computing power difference of more than three times, which is also reflected in the cost.

Taking the SU7 as an example, among its three models, the standard version uses the Orin N series, which has a computing power of only 84 TOPS, insufficient to support advanced intelligent driving solutions, and only supports the most basic L2 level assisted driving functions.

When Tan Jincheng test drove the Orin N series, he directly chose the SU7 MAX version because he knew the difference between them. There was no need to test the so-called advanced intelligent driving features of the Orin N series.

The Orin X series is only used in high-end versions, and in marketing and promotion, the company will blur the difference and will not actively mention the specific model to give consumers a high-end feeling.

Weilai also uses the Orin N series, but in high-end models, Weilai never uses low-end chips because they simply cannot support high-level intelligent driving solutions. Although the cost will be reduced a lot, the experience will also be much worse.

Although Weilai did not actively mention it in its marketing plan, it made a key point of explanation during the user delivery stage. For example, the standard versions of Xingyuan and Xingtu models use the Orin N series, and Weilai will proactively inform users to avoid any misunderstandings about the intelligent driving solution.

"Let's just be direct. If this continues, something bad will happen sooner or later. Besides, consumers these days are not like they used to be. You can't fool them with the tricks you see on your phone anymore."

Major automakers tacitly use vague methods to promote their products, attempting to elevate their product image by omitting specific models. While this may seem deceptive, it's not entirely outrageous in terms of business practices.

If it's all during the formal delivery process or if the publicity isn't too exaggerated, he'll turn a blind eye.

Don't doubt the intuition of someone who has been in the business world for a long time and holds great power. Even without the bugs from his previous life, given Tan Jincheng's current status, the information he has access to, and his experience, he has no doubt that continuing like this will lead to big trouble.

The difference is only a matter of time, and also a matter of whether or not one cares.

"Actually, it would also benefit us to expose them. We are currently in the first tier of intelligent driving solutions. Their deceptive advertising, which targets our products, is essentially a form of harm to us."

This is breaking the industry's unspoken rules. Tan Jincheng needs to unify the internal voice. Making grand pronouncements about being afraid of trouble is useless, because it's not just him who knows that trouble will happen sooner or later; everyone else knows it too.

To persuade senior executives, you still need to use incentives.

Currently, Weilai's intelligent driving solution, like Chrysanthemum's, is divided into four versions: basic, enhanced, advanced, and flagship. To be honest, in terms of intelligent driving capabilities, Chrysanthemum's ADS solution is absolutely unparalleled in China.

This is something no one can compare to. In terms of computing power, data, and heap configuration, Weilai can rival Huawei, but in terms of full-stack self-developed solutions, Weilai really can't compete.

Chrysanthemum can truly complete everything from start to finish on its own, while Weilai's self-developed solution requires the assistance of a series of sister companies, including Orange Group and Meizu Technology, making it impossible for Weilai Auto to achieve a full-stack solution.

Both companies develop their own technologies, but one handles everything itself, even using its own chips, while the other relies on the supply chain. Their collaborative capabilities are different.

In reality, when it comes to intelligent driving solutions, there are very few companies that can truly be considered to have a full-stack self-developed solution. Even BYD's newly launched "Eye of the Gods" solution, at its most basic level, cannot be considered self-developed.

Geely is even more abstract, with a huge number of teams. The key issue is that the data between each team is not shared. For the same model, the basic version and the high-end version may be developed by two different teams, and the data is not shared, making it seem like two separate companies.

This abstract approach is unique in the world. Fortunately, Mr. Shu has realized the seriousness of the problem, and Geely's intelligent driving team is in the process of rectification.

As for the effects of the rectification, that remains to be seen. The fact that Galaxy E8 chose Weilai's intelligent driving solution can be considered one of the fallback options for Geely. If Geely's intelligent driving team fails to perform well one day, Weilai will automatically become Geely's intelligent driving supplier.

"That's certainly true. If we make these things clear, then other car companies will no longer have an advantage if they use such vague advertising to compete with us."

"There are benefits, but also pressure. If you break the industry's unspoken rules, you will be attacked."

"Hehe, then let's bring along our competitors."

"Boss, you mean Chrysanthemum and Xiaopeng?" "Yes, bring in a few more companies, since this will benefit all of us."

If only Wei Lai's family breaks the unspoken rules, the pressure will naturally be enormous. However, if the three families in the top camp break the unspoken rules at the same time, the pressure will be much less. As for how to persuade them, it is actually quite simple.

That is to persuade manufacturers with relatively good intelligent driving solutions, especially companies like Xiaopeng and Juhua, whose main selling point is intelligent driving, by promoting legislation on intelligent driving.

When companies in the market that lack sufficient technical capabilities or even basic equipment use vague advertising for marketing, it is essentially an infringement on the rights of technological leaders. Once legislation is passed, it will be impossible to continue such advertising practices.

By then, the standards for L2, L2+, and L3 will be clearly defined, and there will be no way to blur them.

“That’s one way. I’ll handle Xiaopeng’s side. As for Chrysanthemum’s side, Mr. Tan, you’ll have to take charge personally.”

Li Xiang largely agrees with this point, believing that promoting legislation is beneficial to technological leaders while preventing the phenomenon of bad money driving out good.

There are already references for legislation on intelligent driving. Germany revised its Road Traffic Act twice, in 2017 and 2021, and introduced supporting regulations for autonomous driving in 2022, becoming the world's first country to legislate for L3 and L4 autonomous vehicles.

The regulations were revised and supplemented twice, in 2019 and 2023, clarifying the standards for the legal operation of Level 3 and Level 4 autonomous vehicles. North America also has relevant laws and regulations, which are all of reference value.

In terms of the legislative system, it is actually already mature.

“Okay, I’ll contact Juhua’s side. Also, you should contact Li Bing. Their intelligent driving skills are decent. More people mean more strength.”

Since collaborating with Huawei on the promotion of the new X7, and with the launch of Xiaomi Auto, the relationship between Weilai and Huawei has improved considerably, especially in terms of their fan base, where there has been much less bickering between their respective fan groups.

“That works too. Mr. Li and his team have spent a lot of money on their self-developed system. He wouldn’t be happy if it were wiped out by Ziyan.”

If we're talking about controversy, Li Bing is definitely one of the most controversial figures in the automotive industry. There aren't many people who can spend money more extravagantly than him. However, Li Bing has indeed done some things on the path of self-development, including investing heavily in research and development of chips, large models, and so on. In terms of technological reserves, his company, Wenjie, does have something to offer.

Self-developed and character-developed—a difference of just one word—results in vastly different marketing performance and sales.

"Shouldn't you communicate with BYD and Geely?"

At this point, Wang Fengying raised a question. She didn't mention her former employer. With Lao Wei active on the internet and pursuing a personal brand strategy, she knew that Great Wall was no longer the Great Wall she knew.

Furthermore, Great Wall Motors has not made many achievements in the field of new energy vehicles. Its intelligent driving technology is still in its early stages and it lags far behind the leading companies.

After thinking for a moment, Tan Jincheng said, "Forget it, having more people is an advantage, but having too many people isn't necessarily an advantage either."

The merits of the "Eye of the Gods" still need to be proven by the market. In fact, for a long time, I didn't believe in intelligent driving solutions, which is why BYD's progress has been slow despite its early planning.

The actual controller of a company does not believe in the technology and only actively follows up after market verification. Although there is technical accumulation, it still needs time to be verified.

As for Geely, let's forget about it and wait until they finish their internal restructuring.

June.

In the sweltering summer heat, Lei Jun, the founder of Xiaomi, who just completed the delivery of 10,000 vehicles in 43 days in May and delivered 8630 vehicles throughout the month, achieving a remarkable sixth place in the delivery rankings of new energy vehicle startups, felt a slight chill.

The SU7 remains incredibly popular, with its topic still trending highly on Douyin. Lei Jun revealed that its end-to-end intelligent driving activity rate exceeds 83%, and its intelligent driving mileage exceeds 362 million kilometers. By the end of May, it will be available in ten cities with NOA (Normally Owned Assessment) and Lei Jun has set a goal of becoming number one in the industry by the end of the year.

However, in the days following his announcement of the year-end targets, educational videos about intelligent driving components and configurations, as well as calls for legislation on intelligent driving and criticisms of the current exaggerated claims in the automotive industry, quickly dominated the internet.

Propaganda is propaganda, and strength is strength. They know their own situation. If the legislation is actually completed, it will be absolutely disadvantageous for them. Once the legislation is completed, they will no longer be able to engage in ambiguous propaganda.

The popularization of science, including chips and computing power, has also indirectly affected the influence of the standard version of the SU7, because the standard version's Orin N series chip does not have advanced intelligent driving capabilities.

In terms of cost-effectiveness, the standard version, which starts at 215,900 yuan, is not as good as the high-end version of the Exeed S01 if you value the intelligent driving solution. There is a price difference of nearly 60,000 yuan between the two.

Clearly, in terms of intelligent driving solutions, the standard version is absolutely inferior to the high-end version of Exeed S01. Even in the most basic, or rather the lowest-end, free intelligent driving solutions offered by various companies, Xiaomi is still inferior to the top companies.

The top three companies have already achieved map-free NOA in all cities nationwide, and even Wenjie, which is in the second tier, has opened up in 726 cities.

Weilai, which adopts a hybrid solution combining vision and millimeter wave, and supports high-speed NOA in some models, is the company with the highest hardware penetration rate. Its hardware penetration rate has been extended to the Exeed Wish model, which has a starting price of less than 70,000 yuan, making it a true "intelligent driving equality".

Even BYD, a latecomer, has managed to achieve widespread adoption at the 100,000 RMB price point. Compared to the leading companies, Xiaomi has no advantage whatsoever.

"The direction of the propaganda is wrong."

In the dead of night in Beijing, Lei Jun kept refreshing his phone, the screen lingering on Douyin (TikTok). Thanks to the algorithm's recommendations, every few videos he would come across educational videos about hardware, videos criticizing propaganda, and videos advocating for legislation, among others.

He can immediately tell who is behind any criticism of excessive publicity.

Such widespread adoption is clearly the result of a collaboration among the leading companies. Although consumers are currently in a frenzy, and given the order-locking rules, it is unlikely to have a significant impact on its delivery volume this year.

However, they're not just building one model. They already have two models planned for release within the next year. If consumers become more rational, it will definitely have a significant impact on future sales.

It's June now, and for Xiaomi, 618 is a very important sales period. The popularity of the SU7 is not only driving sales in the automotive sector, but also across all product categories.

The ecosystem of cars and people may not be that important to other companies, but it is very important to Xiaomi, and the popularity of the SU7 is the foundation for its current success.

"It's difficult to enlighten users, but we still have to do what needs to be done."

At the same time, Tan Jincheng, who was in Ningbo, was also boasting to his old friend Zhang Xupeng that the internet trend had suddenly changed in recent days. Popular science videos about auto parts, intelligent driving solutions, and a series of actions including criticism of excessive publicity were already showing signs of competing with the popularity of the SU7.

Among these, the popular science section is mainly handled by Weilai. What Weilai needs to do is to enable consumers to have a more comprehensive understanding of the advantages and disadvantages of various intelligent driving solutions and the differences between different versions of components.

"This is difficult; some people are actually unwilling to believe these things."

Zhang Xupeng, who was also scrolling through short videos and watching the drama unfold, chuckled and said, "To enlighten users, or rather, to change their consumption habits, is incredibly difficult. It took users so many years to switch from gasoline cars to new energy vehicles."

Changing consumers' spending habits in a short period of time is not an easy task.

"Actually, it's not difficult. The current situation is different from a few years ago. Just wait and see, by the end of the year at the latest, consumers' consumption habits will change."

Tan Jincheng, on the other hand, is full of confidence. This confidence does not come from the combined strength of the four companies, but rather from his confidence in the current consumer psychology and the current consumer environment.

Consumers are always influenced by emotions to buy a product. Every year, various hot topics drive the creation of certain best-selling items. However, the number of products that can leverage these trends to create best-sellers and maintain their popularity for a long time is decreasing.

True blockbuster products are always built on product strength. Consumers are becoming more rational and have a better ability to distinguish between trending news and popular trends. After being repeatedly proven wrong, the phenomenon of blindly following the crowd is becoming less and less common.

"Are you so confident?"

Zhang Xupeng looked at his old friend with some surprise. It wasn't that he didn't believe it, but the current hype was just too high. The promotion of the intelligent driving solution that his old friend mentioned was already difficult to discern, and even many industry insiders couldn't understand how it could change by the end of the year.

"Yes, just you wait and see. We'll see by the end of the year."

(End of this chapter)