2003: Starting with Foreign Trade

Chapter 862 Weilai Mobile Phone and Range Extender

imperial capital.

Inside Horizon Robotics' headquarters building, Mr. Tan, who had just arrived in Beijing, was listening to Yu Kai's work report.

In recent years, he has been traveling to Beijing more and more frequently. In addition to building relationships, he also has a lot of business in Beijing, the most important of which is Horizon Robotics' intelligent driving system.

"Our business is not limited to automobiles; we have also made many breakthroughs in smart home appliances this year."

Currently, there are too few application scenarios for L2 intelligent driving. Therefore, the entire company has developed a three-step plan for the near, medium and long term. In the near term, we will leverage the white goods market to hone the team's capabilities and validate the products.

In the medium term, the focus is on intelligent business scenarios, while in the long term, the focus is on the automotive market. This aligns with Mr. Tan's entrepreneurial philosophy: start with relatively simple and mature industries and survive first.

Horizon Robotics' current client list includes many well-known white goods companies such as Midea, Gree, and Xiaomi, which has improved the company's financial situation to some extent.

"We are currently working with Intel to advance a driver assistance system that optimizes the detection and recognition of pedestrians, vehicles, and lane markings, and we plan to unveil it at CES in North America."

This year's CES has ended. Horizon Robotics participated with its existing technologies and received a good response, which attracted the attention of Intel. While Intel felt that investing in Horizon Robotics was too expensive, they were willing to try out specific technical cooperation.

The main focus is still on exploring FPGAs, which can relatively flexibly embed some algorithms into computing hardware and can be modified according to needs, which is quite attractive to Intel.

Back in 2015, Intel acquired Altera, the world's second-largest FPGA manufacturer, for $167 billion. The Altera division is the one that Horizon Robotics is collaborating with this time.

This is an investment opportunity brought in by Yu Kai. Horizon Robotics' ultimate goal is to design automotive chips, and cooperation with top chip manufacturers is essential.

The ability to attract Intel represents a significant expansion for Horizon Robotics in its chip design business.

"In addition, more and more car manufacturers and OEMs have been wanting to cooperate with us in depth these days, which is closely related to the 13th Five-Year Plan."

With business taking off, Boss Tan was very happy: "This is a good thing. Next year should be a breakthrough year for our business. In addition, it is a good thing that more and more host manufacturers are joining. But we also have to be discerning. There are many companies that use this as an excuse to cheat on subsidies. We don't want to get involved."

Any high-tech industry and policy plan involves substantial subsidies, and Horizon Robotics is no exception.

The previous batch of subsidies that Lifan was fined 1.14 million yuan for fraudulent activities mostly involved converting oil-powered vehicles into electric ones, and the range of these vehicles did not meet the requirements. In fact, those that were transferred from one pocket to another have not yet been investigated, so it can be said that they were let off the hook.

With the new plan now in place, subsidies for intelligent driving will certainly follow, and these OEMs who are used to making quick money will inevitably try to find loopholes in the policy again.

"Understood. Even those who want to invest financially in us now have to meet certain requirements, not to mention strategic cooperation. For most OEM manufacturers, our interactions are purely business-related."

Even Intel felt that the Series A+ funding round was too expensive, and those mid-to-lower-tier console manufacturers might not be willing to invest, or rather, they might not have the financial capacity.

"That's fine. I don't understand the technical aspects, but if you have any other questions, you can come to me for help."

Yu Kai had no sales experience; Tan Jincheng was the one who handled the business in the white goods sector. Tan Jincheng also provided a lot of advice on policy solutions and financing considerations.

Horizon Robotics is still in the exploratory stage, and its actual product, namely chip design, has not yet been developed. Therefore, it is difficult to advance the Series B financing. However, it cannot avoid financing in the next two years. Tan Jincheng's idea is to separate the financing between Series A and Series B.

We'll gradually raise funds and bring in partners. Once the first-generation automotive chip is designed, we can then start our Series B funding round.

Horizon Robotics' plan between 2016 and 2018 was to enrich its intelligent driving system. After 2018, it will shift its focus to the design and development of automotive chips, aiming to be able to use its self-developed automotive chips by 2020.

The vehicle's infotainment system is self-developed, the chips are self-designed, and the core battery is also self-developed. These alone are enough to create Weilai's cost advantage.

BYD's model has been able to achieve explosive growth in the new energy vehicle market largely due to its cost advantage. The same applies to Geely. Geely officially entered the new energy industry only last year, and its ability to catch up late and catch up is also due to the cost advantage accumulated over a long period of time.

The reason why Weilai only dares to produce SUVs in the field of gasoline vehicles is largely due to its poor technological accumulation, which makes it unable to form a comprehensive competitive advantage with existing manufacturers.

In the field of new energy vehicles, Weilai aims to establish its own cost advantage, also known as a competitive moat.

Tan Jincheng's actions are all based on building a moat around the group's business.

"Oh, right, boss, wait a minute."

The specific work details had been discussed, and Tan Jincheng didn't have time to experience it right now. The Two Sessions in the capital had already started, and he had to go to the site to listen to the meeting content. In addition, he also had to give some interviews.

"Anything else?"

"It's nothing. I have a few Xiaomi Mi 5 phones here. Mr. Lei sent someone to deliver them so you can try them out."

The Xiaomi Mi 5, released on February 24, boasts 10 cutting-edge technologies. Before the release, Lei Jun called Tan Jincheng to send him a few units. However, Tan was busy with a nationwide inspection tour and his whereabouts were uncertain, so Lei Jun asked him to send them to Horizon Robotics' headquarters instead.

"It's already the Xiaomi Mi 5."

When Yu Kai took a bag out of his office bookcase and handed it to Tan Jincheng, Tan Jincheng said with some emotion.

I pulled out a black Xiaomi Mi 5 from the bag. It felt quite high-quality. Apart from the fingerprint unlock, it was no different from smartphones from a few years later. Xiaomi's industrial design had also become quite stable.

Personally, Tan Jincheng prefers fingerprint unlocking to facial recognition.

"Yes, it's the Xiaomi Mi 5 already. I've tried this phone, and its advantages and disadvantages are quite obvious. I can only say it's average. However, considering its price of 1999 yuan, it is indeed the best value for money."

"Speaking of which, I also heard that the OEM issue for the Xiaomi 1 was something you strongly recommended, boss? Mr. Wang from BYD even praised your vision on several public occasions."

While BYD Electronics has not made any major breakthroughs in the complete vehicle business and has been suppressed by Lenovo in the new energy vehicle sector, its business has developed very rapidly and has not stagnated due to the downfall of Nokia and Motorola.

All of this is related to the advice given by Tan Jincheng back then. Due to production capacity issues, major contract manufacturers, including Foxconn and BYD, were initially unwilling to accept the Xiaomi 1.

The initial production capacity of 100,000 vehicles requires building a brand-new production line and training workers, which is clearly not cost-effective for large manufacturers. Without the support of subsequent large orders, they are indeed unwilling to take on this loss-making deal with small factories.

At that time, Xiaomi had no say in the supply chain, but Lei Jun was extremely ambitious and looked down on small supply chain companies, only looking for first-tier supply chain manufacturers.

The issue of contract manufacturing was one of the biggest problems at the time. Fortunately, BYD eventually took on the contract manufacturing for Xiaomi, and this risk brought them great profits from their contract manufacturing business.

Xiaomi's OEM business alone has generated countless profits for BYD Electronics over the years. In addition, Xiaomi's advanced supply chain management philosophy has also provided considerable inspiration to BYD Electronics' management.

"It's mainly due to Xiaomi's own strength; the price of 1999 is simply a game-changer."

Lei Jun has now personally taken over Xiaomi's supply chain system, and the entire Xiaomi industrial chain closed loop has basically been formed. The Xiaomi series priced at 1999 yuan and the Redmi series priced below 1,000 yuan have brought great brand effect to Xiaomi.

Xiaomi, including the Redmi series, will definitely raise prices in the future, but no matter what, at least for now, the price of 1999 yuan has really dealt a huge blow to the Android market.

The price of 1999 yuan is largely a reflection of Xiaomi's struggle for pricing power. Apple holds the pricing power for high-end phones, while Xiaomi currently holds the pricing power for low-end phones.

Everyone understands what it means to have pricing power in an industry.

At the launch event for the Xiaomi Mi 5, Lei Jun announced several initiatives for Xiaomi this year, including the transformation of Xiaomi Home from service stores to retail stores, making them Xiaomi's offline experience stores. This means that Xiaomi now officially has offline channels.

In addition, there are production chain plans, and Xiaomi's laptops will also be released later this year.

The real Xiaomi behemoth started this year.

"Xiaomi is getting stronger and stronger now, and their technological accumulation is also quite good. We can also strengthen our cooperation with them. The concept of smart cars is inseparable from the Internet."

Intelligent cars are currently only mentioned within the industry. The media and the secondary market mostly refer to this concept as the Internet of Things, which is somewhat general, but it also reflects the idea that cars will be connected to the Internet.

"Currently, our cooperation with Xiaomi is mostly in white goods. But since the boss has said so, I'll talk to Mr. Lei again later to see if there are any other areas for cooperation."

After saying that, Yu Kai seemed to remember something else; "Oh, right, Xiaomi designed and manufactured the phone for us, and the prototype is done too. Boss, would you like to take a look?"

Tan Jincheng immediately became interested: "Oh? The prototype is out? Then bring it over for me to see."

He didn't actually get the prototype right away. After the prototype was made, Tan Jincheng's requirement was to give it to Yu Kai as soon as possible so that Yu Kai could match it with Wei Lai's car system for better performance. He didn't understand mobile phone design, but he had seen a lot of products, including those from Apple, Xiaomi, and OPPO and Vivo over the next seven or eight years. He could pick any design that left a deep impression on him and use it as Wei Lai's flagship model.

"Yes, this was personally delivered by Mr. Lei. In his words, you really put their company's designers through a lot of trouble, but the product is indeed amazing."

"Haha, mainly because I'm not even half-baked. When mass production starts, I'll give Xiaomi's designers a little bonus."

The most memorable thing was definitely the new "Beautiful Legs 60" that he released when he was reborn. It was trending on social media when he was reborn, so it was hard not to remember it. Besides, the design of that flagship product from Chrysanthemum Factory was indeed quite good.

In addition, the main color of Meitui 60 is very similar to that of Weilai, and the brand image is also very consistent. However, Tan Jincheng doesn't understand mobile phone design at all and only remembers the general appearance, which really tormented Xiaomi's designers.

All designers fear people like Tan Jincheng the most. They have a concrete image in their mind, but they don't understand design. Trying to get the ideas out of his head is simply torture.

The NIO phone, derived from the Meitui 60, is also primarily blue. Its configuration is basically the same as the Xiaomi Mi 5. The OEM manufacturer is Luxshare Precision, one of Tan Jincheng's partners and a company in the Apple supply chain.

"Not bad, not bad. As expected of Luxshare's high-quality product, which meets the strict requirements of the supply chain."

Although Weilai's self-owned brand mobile phones only serve car brands and have no plans for large-scale promotion, and are prepared to incur losses, since they have started, they must do it well and establish a strong brand image.

It seems that Li Bing also worked in the mobile phone industry in his previous life, but his prices were criticized for ripping people off, and the quality and other aspects were also lacking.

"I'll take one back and try it out for a while, and then I'll give you some feedback."

After playing with it for a while, Tan Jincheng decided to leave. To be honest, smartphones have become so similar in daily use that there isn't much difference anymore. As long as the system is smooth, there are fewer ads, and the battery life is strong, it's basically enough.

Besides its normal functions, the Weilai phone is mainly used for in-vehicle interaction. The experience that Tan Jincheng was referring to is in-vehicle interaction, which belongs to the Weilai system.

"Okay, boss, please remember to give us more feedback."

Yu Kai admired the small business owner quite a bit for this. In his daily life, the small business owner was not extravagant. He would use this brand for all his daily necessities, as long as it was produced by his company.

From cars to clothing, he usually uses the company's products. Whenever a new product is launched, he tries it out and provides feedback. Ironically, even though he is not very technically savvy, his experience as a consumer often yields excellent opinions.

"Don't let me discourage you later."

Tan Jincheng's current car is the Weilai ES8, which is currently Weilai's most high-end model and the model with the most comprehensive application of L2 intelligent driving. However, it must be said that these days, L2 intelligent driving is more of a gimmick.

Compared to his previous life, which was full of showing off and being cool, Tan Jincheng is still far behind. However, he does have some authority to speak on the topic of intelligent driving.

"By the way, how's that range extender coming along?"

The technology of range extenders has not yet been fully mastered. In addition, the key product that Weilai is promoting this year in the field of new energy vehicles is the ES8. Tan Jincheng always drives an ES8 when he goes out in public, which is due to this consideration.

The official launch date for the WILAY ES8 range-extended large SUV is planned for the end of this year, with a planned market launch date at the end of the second half of next year. This will allow time for the WILAY ES8 to enter the market while also refining the range-extending technology to a more mature stage.

Since the Li Xiang brand is no longer around, the pioneering work of range-extended electric vehicles naturally belongs to Wei Lai. Wei Lai designated the L1 model for its range-extended electric vehicles, which is a large SUV based on the Li Xiang ONE.

We'll provide range-extended electric vehicles, refrigerators, TVs, and even large sofas. We'll ignore what our competitors say and just focus on making money.

It seems that the Li Xiang ONE delivered more than 20 units in the three years before it was discontinued. It was a very successful model with a range-extended electric vehicle that was on the market for three years. The reason for its discontinuation was not due to sales issues, but rather to make way for subsequent upgraded models.

In addition, Li Xiang's production capacity at that time was insufficient to launch three large SUVs simultaneously. Stopping the production and sales of the "experimental products" and focusing on developing new models was a necessary consideration for the company.

Take WILAY's current new energy production capacity as an example, it is currently biased towards the Aion series, after all, the Aion series is WILAY's sales leader at present.

The capacity allocation for ES6 and ES8 is mainly based on ES6, while the production capacity for ES8 depends on the order quantity, and the actual capacity that can be allocated is very limited.

"We will ensure the car's infotainment system is compatible, and we are also working on compatibility with our Weilai mobile phone system. However, boss, this car will be very controversial after it is launched."

What is a range extender? Simply put, it's a pure electric vehicle with an engine attached to its back. It consists of an engine, a battery, and a motor. The engine does not directly drive the vehicle, so a more accurate term would be range extender or generator.

Electric vehicles that burn gasoline involve an extra energy conversion step, resulting in greater waste. This technology, which even a junior high school student knows, is considered extremely outdated in the industry, drawing considerable criticism and controversy.

In industry terms, range extender technology is outdated. The fact that WILTE is going to launch range extender technology has left many manufacturers puzzled as to why WILTE, which is currently technologically advanced in pure electric vehicles, would choose such an outdated technology.

Although WILERI's range-extended electric vehicles have not yet been released, many manufacturers in the industry are already waiting to see WILERI fail.

"Haha, let them complain, just ignore them."

Before the official launch, Tan Jincheng couldn't really talk about the "it's actually good" principle. After all, no matter how much hype you make, you still have to look at the sales figures. In fact, range extenders seem to be a very outdated technology with low technical barriers, but their potential is not low at all.

Building a good range extender isn't something anyone can do; it requires a powerful range extender that excels in thermal efficiency, stability, power generation, and NVH (noise, vibration, and harshness). If it could run on 92-octane gasoline, that would be another technological breakthrough.

In addition, although the range-extended electric vehicle is equipped with a range extender, it is still a pure electric vehicle in terms of actual experience. Among all new energy vehicles, the driving experience is definitely the best for pure electric vehicles.

Furthermore, range extenders have a simple structure and low manufacturing and design costs, allowing them to be built at a lower cost. They are 100% motor driven, allowing users to enjoy the advantages of the electric motor era, such as fast acceleration and smoothness.

With the addition of interior features such as a refrigerator, color TV, and large sofa, the overall experience is excellent.

"Not many consumers truly understand technology, but they are very particular about the driving and riding experience. As long as we optimize the various aspects of the experience, we won't have to worry about selling it."

There's also a hidden consumer psychology behind this: it solves consumers' range anxiety. By carrying a generator for refueling on a pure electric vehicle, you don't have to worry about running out of power halfway through the journey, right?
Consumer psychology is sometimes just that amazing.

Yu Kai smiled. Although both companies are controlled by the same parent company, Horizon Robotics and Weilai are two completely independent companies. Horizon Robotics only assists Weilai in intelligent driving and in-vehicle infotainment experience. He has no reason to interfere with how Weilai operates.

However, given the boss's confidence, he was still somewhat curious to see how the extended-range electric vehicle would perform after its launch.

This year, the main focus is on the Welai ES8, and starting in the second half of next year, the main focus will be on the Welai L1. Pure electric and range-extended electric vehicles will be launched simultaneously. In addition, we will develop overseas markets in the gasoline vehicle market. With the global layout of the power battery business, Welai's development is getting faster and faster.

Meanwhile, the propaganda campaign against Lifan, orchestrated by Tan Jincheng, the sixth brother, also began.

On March 3, Toutiao used its unique algorithm to push out the notice from the four ministries that punished fraudulent activities related to new energy vehicle subsidies. Lifan, which was among the companies listed, was prominently featured, and a large number of articles about Lifan's quality issues also appeared.

When Zhu Pei, president of Yangzi Automobile (vice president of Weilai Group), who was on an inspection tour in Chengdu, was asked by reporters about the cooperation with Lifan again, this time he did not remain silent but gave a direct answer.

"Yangzi Motors focuses on the pickup truck business, and the Southwest region is a key area for our pickup truck market. If Yangzi Motors wants to develop, the Southwest market is a key area. Chongqing, Chengdu, and Chang'an are all key cities we are considering."

"As for cooperation with Lifan, there is no such intention at the moment. When our CEO Tan came to Chongqing before, he was just paving the way for me. Please do not mislead investors."

Zhu Pei's words were cleverly worded; they weren't exactly a denial, but they sounded like one.

He even mentioned Chang'an, which is also a key city in the automotive industry.

Affected by negative news and Zhu Pei's interview, Lifan's stock price, after rebounding slightly for three trading days in line with the broader market, plummeted by 5% on March 4, and even approached the daily limit down at one point during the day.

The rebound that lasted three trading days was wiped out in a single day. That's how volatile the secondary market is. Those who were hoping to profit from the rumors of Lifan and Weilai's cooperation were left extremely frustrated.

"Haha, see? I told you not to play these tricks. I believe Mr. Tan truly respects you, but if you think that this is enough to convince them that the other party won't resort to some business tactics, then you're really overthinking it."

Jingcai Ge pointed to the collected information and chuckled to his father. To be honest, Tan Jincheng's attitude when he came to Shancheng was really a bit confusing. He personally visited and brought gifts, and he also praised his father and Lifan to the extreme.

"I underestimated him a bit. Are all young people these days in such a hurry?"

The negotiations have only lasted a few days, so why are they resorting to underhanded tactics?

Tan Jincheng is a major shareholder of ByteDance, and it's impossible for Boss Yin, who has been in business for decades, not to see that this is Wei Lai's behind-the-scenes move.

"So what do we do?"

(End of this chapter)