2003: Starting with Foreign Trade

Chapter 790 The First Quarter's Order Surge

P.S.: Still asking for some votes!
The process was smooth sailing, with no difficulties whatsoever; the battery joint venture with Tesla proceeded smoothly all the way.

Since this so-called joint venture does not involve setting up a factory in China, there is no need to notify the commerce ministries of both countries, making the process much simpler.

Even so, the news of a $40 billion foreign trade deal caused a huge sensation in both countries, especially domestically.

People from Anhui Province, Zhejiang Province, and several ministries contacted Tan Jincheng directly to inquire about the specific delivery process of the orders and the payment schedule. No one expected that Tan Jincheng would make such a big fuss without making a sound.

Xuanwu Battery has a good reputation in the industry, but due to limited shipments, there are not many people who truly understand Weilai Battery's technology.

With extensive media coverage, Tesla and Xuanwu batteries have become widely known, and Weilai Auto has given consumers a different experience. In the words of netizens, "I never expected Weilai Auto to be so awesome."

For a long time, Weilai has been known to consumers as a car seller. The cars are beautifully designed, made with solid materials, and have good sales. However, few people know that Weilai is also a battery supplier and has mastered the core technology of new energy vehicles.

Signing a $40 billion battery export deal in one go is an impressive feat on a global scale.

In the past few days, the entire province has been mobilized. The battery factory in Weilai has received wave after wave of inspection teams. Tan Jincheng was also forced to stay in Luzhou for many days. Factory Director Ma received even higher-level treatment in Luzhou than in the capital.

The entire city of Luzhou was immersed in a joyous atmosphere. In Zhang Xuhui's words, it wasn't even as lively as last year's Spring Festival.

According to the initial agreement signed between Weilai and Tesla, Weilai will establish a joint venture with Tesla, with Jin New Era as the main entity, to provide Tesla with power battery solutions worth a total of US$40 billion.

整个合同期从2013年10月1日开始，一直持续到2016年9月30日，为期三年。

This is the largest order ever placed by Weilai, and also the largest parts order in the new energy vehicle industry. It is of great significance to both Weilai and Tesla.

Tesla, which was already expecting to be profitable in the second quarter, surged 9.18% in the first week of trading in April, with its stock price reaching a record high of $46.68.

"To be honest, I really didn't expect lithium batteries to develop so much back then, and no one would have thought that any car company would be so bold."

That's right. When Wei Lai first placed a bulk order for engines with Mitsubishi, Nagasawa Yu was skeptical. He only dared to supply them with a few thousand units in the first batch, fearing that they wouldn't be able to sell them all.

However, Tan Jincheng wasn't worried about that. Could Tesla not afford it? No way, he had gone all in on Tesla. When it comes to the skill and courage to go all in, Musk is no less capable.

The person who said this was Wu Rong, who was promoted this year and has only been in office for a few months.

He had previously had contact with Tan Jincheng. He was initially responsible for receiving Wei Lai's investment in Luzhou. He really didn't expect that Tan Jincheng would give him such a big gift so soon after he was promoted to the rank of official.

With such a large order, Luzhou has basically completed one-third of its export target for this year, and it has also made Luzhou and itself famous throughout the country.

In a sense, he was even more eager for this order than Tan Jincheng.

"Haha, actually I didn't expect it either. Before Elon came, he talked to me about wanting to purchase a batch of batteries. I thought it was just a small part. Who would have thought he would have the idea of ​​changing suppliers?"

Wu Rong's words to Tan Jincheng meant he considered him one of his own. If such words were to get out, it would have a negative impact on him, since the new energy vehicle industry is the general direction, and his words reflected a skeptical attitude.

Indeed, this is the case. Currently, most cities have not followed suit with local subsidy policies for new energy vehicles. Lack of funds is one aspect, but a lack of confidence in their prospects is the main reason.

Building houses is very lucrative, because houses can boost GDP in a very short time.

The reason why Luzhou dares to provide such strong support is not only because of the support from the province, but also because of the real money invested by Tan Jincheng. Many companies' investments in new energy are fake, and they are trying to cheat for loans, subsidies, and land. They are just trying to find ways to cheat for subsidies.

But Tan Jincheng was truly dedicated to his work. Factory after factory, row after row of machines were brought in. The equipment had been studied by the city and was very advanced.

"We'll need Uncle Wu to keep an eye on the construction schedule for our second phase of the project. We'll try to complete it by the end of this year so we can deliver the goods sooner and receive the foreign exchange sooner, right?"

Actually, Tan Jincheng didn't need to say anything more about this. Once the orders were secured, the company would cooperate fully in both recruitment and production schedule.

Sure enough, before Tan Jincheng could finish speaking, Wu Rong repeatedly assured him that he would absolutely not delay Wei Lai's construction schedule or delivery date.

After finishing the formal contracts and packing some samples, Musk returned to the United States. He had originally planned to visit Shanghai, but there was no time to do so.

Tesla's first-quarter earnings report is about to be released, and he will need to go back and answer questions from investors.

Furthermore, upon his return, he will have to deal with Panasonic, a behemoth that remains a significant player for Tesla. In addition to being Tesla's battery supplier, Panasonic is also one of Tesla's shareholders.

In terms of capital manipulation, Musk is no longer the young entrepreneur who was ousted from the board of directors multiple times. The last time he reduced his stake in Tesla was when the company went public.

In his previous life, Tan Jincheng had read many news reports about Musk reducing his holdings in Tesla, and each time the old guy managed to sell at a high price.

Furthermore, the way he manipulated another currency was truly eye-opening; he practically became the biggest manipulator.

Before parting, Musk said he would send two Tesla experts over at the end of the month to work with Lieutenant General Wei to study Tesla’s battery standards.

Before the October orders officially take effect, Wei Lai needs to finalize Tesla's battery standards to make them compatible with their models.

"No problem, trust our professionalism. Just go back and deal with Panasonic and the shareholders."

"Haha, I believe in your skills. If you can handle such a complex requirement from BMW in a short time, then you can certainly handle our requirements as well. And you're right, I also have to deal with Tesla's shareholders."

Tan Jincheng is indeed a director of Tesla, but his voting rights have been delegated to Musk, and he has never attended any board meetings.

Not only Tesla, Tan Jincheng is also a director of Xiaomi, ByteDance and many other companies, but he doesn't usually attend board meetings unless specifically required to do so.

It's not that I absolutely need to avoid suspicion, it's just that I don't have the time.

"OK, then let's look forward to seeing each other again."

Tesla's first store in Beijing is scheduled to open on April 22. On the opening day, CEO Ma will come again to personally hand over the keys to the first batch of Tesla Model S customers in China. This is a tactic he used in the United States.

When a new car is launched, handing over the keys to the first batch of users is indeed a good strategy.

"Sure thing, remember to support me!"

"No problem, I will order a Maodou S in my own name."

"Then thank you, Tan."

Before coming here, he saw online that Tan Jincheng was very popular in China, but after arriving in person, he truly realized Tan's influence in this land. His news was everywhere on the internet.

Many ordinary people regard Tan as an idol. His influence is like that of a top star. In addition, when they go out, many people can recognize Tan.

Tesla's ability to quickly establish a brand image among consumers is largely due to its partnership with Weilai.

Replacing Panasonic was something he had been considering, but he was able to make the decision quickly not only because of Weilai's overall strength, but also because of Tan Jincheng's popularity. Maintaining a good cooperative relationship with Tan Jincheng and his Weilai Group would be helpful for their entry into China.

On the streets of Beijing and Luzhou, he could see many Weilai ES6s from time to time. In addition, there were also many taxis of Weilai's other A-class sedan, which put a lot of pressure on him.

Musk finds this incredible. Although he has been touting electric vehicles, he knows the reality: in North America, selling less than 5000 vehicles in the first quarter would be considered a success.

The sales figures for the Weilai ES6 are 2304 units. Sales data for the year has not yet been released, but judging from the number of times it has appeared on the streets of these two cities, the sales in the first quarter should be quite good.

In addition, he was very interested in data such as Weilai's inventory turnover rate and production cycle. Unfortunately, Weilai is not a listed company, so these data are not publicly available.

You're welcome, see you next time.

After seeing Musk off, Tan Jincheng also had to return to Ningbo. He had stayed in Luzhou for too long. In addition, Orange Technology and Flash Technology were also about to release their first-quarter reports, and he would also be busy with financial statement inquiries.

US stocks performed well in the first quarter of 2013, but A-shares were not so lucky. After rebounding to around 2400 points after the Lunar New Year, they entered a downward trend again.

However, the automotive sector performed quite well, with Great Wall Motors' market value breaking through the 1000 billion yuan mark at its peak. The main reason was that the performance of the SUV market far exceeded expectations, with domestic SUV models being the most outstanding.

The growth rate in January once exceeded 60%, and even in February during the Spring Festival, it increased by 11.8% year-on-year. The growth rate in March was also close to 40%.

Sales were absolutely phenomenal, with demand far exceeding supply. The Yuechi series sold 78752 units in the first quarter alone. The Yuechi A1 continued to perform exceptionally well, selling 54472 units in the first quarter, while the Yuechi A3 achieved an average monthly sales volume of over 8000 units.

The Haval H6 is also a top seller, ranking third with monthly sales of over 14,000 units. However, the Volkswagen Tiguan remains the best performer, selling 1000 more units than the Citroën A1 in the first quarter.

Throughout the first quarter, it was impossible to even crack the top ten without monthly sales of over 7000 vehicles. This performance was simply dazzling to the market. However, it wasn't just SUVs that were thriving; overall sales in the first quarter of this year increased by 17.21%. After two years of stagnation, no one expected the car market to suddenly explode this year. Insufficient production capacity was a problem for almost all automakers.

Weilai also faced the problem of insufficient production capacity. Weilai, which was already quite strict in its inventory management, experienced a shortage of goods for the first time. In popular areas, 4S stores even had no cars to sell at one point in March.

Especially during the days when news broke that Xuanwu Battery had "won glory for the country" by snatching a $40 billion order from Panasonic.

Sometimes Tan Jincheng was speechless. Many times, the Wei Lai PR team did not deliberately guide this emotion, but it just happened to happen. In fact, relations between the two countries have eased a lot this year.

"Talk to the marketing department and tell them not to let netizens stir up trouble anymore. After the boss went to Nanjing to pay respects, the relationship has improved a lot. We can't go against the public opinion."

Accompanied by Zhang Yong and Zhang Li, Tan Jincheng arrived at the newly started Chunxiao Industrial Park, where production lines were being tested at an accelerated pace in order to put the project into production as soon as possible. The Yuechi Group had sold exceptionally well this year, and Tan Jincheng did not want any unexpected incidents to occur.

Public opinion is a double-edged sword. When handled well, it can be a great marketing event for a company; when handled poorly, it can backfire and result in more harm than good.

The fact that Tesla was able to replace Panasonic as a supplier was an accident, but it's a normal business practice. Musk was the one who made the decision, and it had nothing to do with him.

However, the online atmosphere has changed somewhat, and I'm afraid someone is stirring up trouble.

"I understand. I've noticed that recently too. I'll try to get the media to focus on Tesla and Musk, which would benefit Musk."

They are all highly skilled professionals. Zhang Yong, who has been influenced by Tan Jincheng's marketing philosophy, is no longer the seemingly honest and simple tech guy. In the early days, it was fine for everyone to praise him, but recently it has been after the Boao Forum.

This is just adding to the trouble for those above. Although everyone is quite protective of Wei Lai now, we can't just do whatever we want.

"Mr. Li, when will this place be able to start production?"

Zhang Yong and Zhang Li both have the surname Zhang, so when they're together they both call each other "General Manager Zhang," making it hard to tell them apart. In a moment of impulsiveness, Tan Jincheng started calling Zhang Li "General Manager Li," and now almost all the company's senior management calls Zhang Li that.

"The commissioning can be completed by June at the latest, and production could start as early as May."

Zhang Li laughed and said that the young Zhang Li was quite handsome. After leaving Great Wall Jingmen Branch and coming to Weilai, he took over the entire production and manufacturing department of Weilai Automobile, which can be considered as a step up in his career.

Managing an entire department of a newly established car company felt completely different from working at the Jingmen branch. He also really liked the work atmosphere and energy in Wei Lai. With a young boss and a young company, everyone was still very motivated, and there wasn't much backstabbing among colleagues.

Furthermore, the treatment Tan Jincheng gave him was truly exceptional, with an annual salary in the millions, plus 15 shares of stock, of which 10 were restricted shares and the remaining 5 were stock options.

These 150,000 shares were worth more than 2.6 million yuan before the Lunar New Year. However, after the boss's operations over the past few months, the 4 billion US dollar battery order is worth 3 million yuan without any problem, and it will be worth more than 10 million yuan in the future.

In short, he seemed to be doing quite well in his job, except that his wife faced considerable pressure when he first left, but that's all in the past now.

In addition, his wife's encouragement also played a role in his joining Weilai Auto.

Tan Jincheng nodded: "That's good. Let's start production as soon as possible. Our Yuechi series has always been known for its fast delivery. It's really unexpected that we're facing a shortage of production capacity."

Zhang Yong quickly replied, "We also bear some responsibility here; we didn't pay attention to the software's backend data in a timely manner."

"Haha, no need to rush to take responsibility. I didn't mean to blame you. Didn't you see that everyone is out of stock?"

Zhang Li smiled and said, "That's true. However, I have a slightly different opinion. Although the Yuechi series is out of stock, it has indirectly boosted the sales of our other models. Even the Tank 300 has seen an increase in pre-orders."

There's a joke that a consumer had a budget of 10 yuan before buying a car, but after comparing various options, he ended up buying a BMW.

Although it may sound exaggerated, most consumers actually follow the trend when buying a car. When the model they like is out of stock for a while, they will choose other brands or other types of the same brand.

To put it bluntly, it's simply a matter of having too many choices and being overwhelmed by them.

Zhang Li is absolutely right. The first time the Yuechi series experienced a delayed delivery was due to insufficient market and internal forecasting, but it also created the illusion of supply falling short of demand, indirectly boosting sales of other models.

This situation is not unique to Weilai. During the Spring Festival, everyone's production capacity did not increase, and the inability to buy popular models led to an increase in the sales of many models that had previously sold poorly or were in stock.

The biggest beneficiaries are Chery, Geely, and BYD, all of which employ a strategy of flooding the market with a wide range of models. Many previously ignored models actually sold quite well in the first quarter.

The only product driving sales growth was the Aion S; the increase in pre-orders for the Tank 300 was negligible.

"Haha, that makes some sense, but we can't gain much advantage from this. We should increase production capacity as soon as possible, hire people as needed, and have the HR department prepare this year's recruitment plan. Also, you should mention to General Manager Yu that the planning for new energy vehicles should be accelerated."

Yu Liguo, the dean of Weilai Research Institute, also serves as the general manager of Weilai New Energy Vehicle Business Unit. He spends most of the year in Luzhou, overseeing Weilai's new energy vehicle project.

He recently went on a business trip to Europe; otherwise, Tan Jincheng wouldn't be running around so much in Luzhou.

The surge in orders for gasoline-powered vehicles in the first quarter was unexpected, but the development momentum of electric vehicles is also quite good. The number of downloads of the Kuaidi app has approached 10 million, and the number of registered drivers has reached 150,000.

Furthermore, Didi, after integrating with Alipay and receiving substantial investment, has been like a tiger unleashed from its cage. It has not only defeated the previous market leaders Yaoyao and Yidao in Beijing at an extremely fast pace, but has also been advancing into the national market like a fast train.

The most intense competition is in the Shanghai market, where three companies—Didi, Dahuangfeng, and Kuaiche—are vying for dominance. Although they haven't started a subsidy war yet, they're already fighting tooth and nail.

Offline promotions also occasionally encounter friction. Zhou Mingyu, who was previously transferred to be in charge, seems to have returned to his youth, bursting with unusual work passion.

Judging from Lin Yumin's words, Zhou Mingyu was already thinking about leaving the company. He felt that he would be happier at a startup like Kuaidi than at FlashDrive, where he was supposed to be living a retirement life.

She doesn't dare tell Tan Jincheng yet, since she went there to help out, and it would be a bit dishonest to quit after helping out.

Tan Jincheng found it amusing that someone in their forties could still be so full of passion.

However, Tan Jincheng respected his idea. Indeed, he would have more room to use his skills in the fast lane. He thought he should take a chance and go for it. After all, the fast lane was not bad, and he might even be able to get some shares.

The three ride-hailing apps supported by BAT (Baidu, Alibaba, Tencent) are making great strides, while other car rental apps such as Shenzhou Car Rental have also joined the fray. Among them, Shenzhou Car Rental is making the biggest splash, having ordered a batch of Aion S, BYD Qin, and Weilai ES6 from Weilai and BYD respectively, preparing to launch their car rental business in 60 cities across the country.

In addition, Shenzhou Car Rental is also interested in ordering a batch of Tank 300s, which is currently under negotiation. The reason why Shenzhou Car Rental is making such a big move is because they are planning an IPO.

Making a big splash before an IPO is a common tactic for internet companies.

If we're talking about who's been making the biggest splash in the car market lately, besides Tan Jincheng's $40 billion battery order, it's definitely Shenzhou Professional. They have all kinds of car models, and for high-end models, they even use the BWV 5 series.

Since January of last year, they have been doing charity work everywhere, advertising and donating money, and buying cars. When it comes to spending money, they are definitely number one.

The internet giants' massive spending has brought about significant changes. For Wei Lai, the biggest change is in the Aion S, an A-class electric vehicle. In the first quarter, 823 Aion S vehicles were sold, and at this rate, sales this year could exceed 4000 vehicles.

Of these 800-plus vehicles, excluding the 200 ordered by Shenzhou Car Rental, they were purely sold to end consumers. Through tracking, it was found that many consumers did indeed buy them for personal use while also using them as ride-hailing vehicles.

There is never a shortage of smart people. When a new market emerges, there are always a group of people with keen sense of smell who actively jump in. Whether they make a profit or a loss, this market sensitivity is commendable.

"Okay, I'll keep an eye on things before Mr. Yu gets back; by the way, boss, Didi has recently been looking to buy a batch of 300 Aion S vehicles from us, should we sell them to them?"

"Huh? Why would they be looking for us?"

This was unexpected for Tan Jincheng. Old Ma is actually quite stingy. If Didi wanted to learn from Kuaidi's bug-exploiting method, they could have bought a batch of cars instead of asking Wei for help. Couldn't BYD have done it?
Even if it's not the best option, the JAC Aiyi is fine; the Aiyi is still a Class A sedan.

Zhang Yong laughed and said, "I did find out about that. They first approached BYD, but President Wang was a little reluctant, feeling it was a bit beneath them. BYD has high expectations for Qin. As for Jiang Huai Aiyi, they looked down on them, since the level is too different."

"Haha, sell it! Why wouldn't I sell it? My Uncle Wang might not be happy about it, but I'm more than happy to."

Hehe, that's hilarious. Tan Jincheng certainly knows that Qin has a high strategic position in the BYD system. It's the first model in their Dynasty series, and its sales were quite good last year. It's understandable that Brother Chuanfu doesn't want it to become a ride-hailing car.

It's important to know that the Qin series has never been marketed as a taxi. If they were to enter the taxi and ride-hailing market, it would negatively impact their sales in the general consumer market.

After all, they all proudly display their 0-100 km/h acceleration time on their tailpipes, and they even hold challenge races.

The Qin, which directly competes with the Aion S, wants to surpass the Aion S in terms of brand depth. It's understandable that it doesn't care about the sales of 300 units. If we were in a different situation, Tan Jincheng would have done the same.

It makes no sense to sacrifice our core competencies to compete with rivals in the low-end market for sales of less than 2000 million yuan.

But is it up to them? The market will force them to accept this positioning.

As for Aion S, Tan Jincheng doesn't care at all. He'd love for all ride-hailing apps to come to him to buy it, so he can firmly hold onto his position as the king of ride-hailing.

(End of this chapter)