2003: Starting with Foreign Trade

Chapter 979 Starway's Positioning and Vehicle Design

A very obvious trend is that Woolai is currently doing a pretty thorough job of reducing costs, and this cost reduction is not in the cars themselves.

In terms of marketing, Xingtu, which has been established for nearly a year, has had almost no exposure except for a press conference held at the beginning of its establishment.

In recent years, Weilai has been holding fewer and fewer press conferences. For example, the annual Weilai Night has not been held for two years, so it's almost as if it has been canceled.

When it comes to new car launches, Wei Lai has become stingy, with many model redesigns not even having a launch event.

This is completely different from those car companies that hold several launch events for a single car model. Of course, Wei Lai has done this before.

It's understandable for startups to generate buzz in order to boost sales; it's an essential step in brand development.

Weilai already has its own brand influence, so there is no need for such extravagant marketing methods anymore.

Exeed doesn't have much large-scale advertising, but that doesn't mean Weilai doesn't value Exeed. On the contrary, they attach great importance to it, and a lot of resources have been invested in the design of their first model.

"In terms of brand and sales matrix, we have now done a good job. Now it depends on the efficiency of your research institute."

Yuechi is now an independent brand, and its product line is still mainly SUVs and pickup trucks. The product line is relatively thin, but as a sub-brand, this is not a problem.

Although Aion is not an independent entity, it mainly focuses on the B2B market. The Aion series, which has seen rapid sales growth this year, is actually quite similar to a sub-brand.

Brands that primarily focus on ride-hailing services will inevitably face limitations and will have to continue to cultivate the B2B market in the future.

Fortunately, the ride-hailing market will have a few more years of good times ahead. As for how the Aion series will transform this year, we'll talk about that later.

Models like the BYD Qin are also used for ride-hailing services, and there are other BYD models, including high-end ride-hailing vehicles.

This is also one possible approach.

Regarding Weilai's product line matrix, Tan Jincheng's consideration is a full range of products from low-end to high-end.

"Zhidou Auto is responsible for Weilai's product line in the price range below 10 yuan, while Weilai is responsible for the mid-to-high-end market above 20 yuan."

"Exeed is positioned in the 10 to 20 yuan price range, which is also the most competitive market. We must make our first model an instant hit."

"In terms of design, we have two versions: one is pure electric and the other is a range-extended version."

Hu Zhengnan's report surprised Tan Jincheng: "Oh, Xingtu is also preparing to launch range-extended electric vehicles?"

The research and development work of Exeed is still being handled by the research institute. The previous plan was to develop a pure electric vehicle, but today Hu Zhengnan said that they will start developing a range-extended electric vehicle.

Range extenders weren't very popular in the first two years, but their popularity this year is ridiculously high. After several years of market promotion and pre-launch hype, the sales volume of the Weilai L1 has been rising steadily this year.

Since May, the monthly sales of the Weilai L1 have remained above 4000 units. In June, the Weilai L1 sold 4646 units, becoming the best-selling new energy SUV of the month.

From June until August, Weilai L1 maintained its champion position.

Based on current order volume, the sales volume of the Weilai L1 in September is expected to reach more than 6000 units, making it the first mid-to-large-sized new energy SUV under the Weilai brand to achieve sales of over 6000 units.

Although the company is pushing the ET5, the L1 has taken the lead in the new energy vehicle market and become another blockbuster model under the Weilai brand.

In the mid-to-large SUV market, the Weilai L1 has surpassed luxury brands such as the Lexus RX and BMW X5, ranking second in sales.

The rise in sales has also been accompanied by huge controversy. In the past few years, range extenders have been controversial, but because there was no benchmark model, the controversy was only internal.

However, as L1 became a blockbuster model and there were no comparable models on the market, L1 range extenders became the target of criticism.

The better it sells, the more attacks it receives, such as the 1.5T three-cylinder engine and the poor quality of the engine developed by Wei.

They've relentlessly attacked us, claiming range-extended electric vehicles are outdated technology and transitional products, and that Weilai's L1 development is nothing short of exploitative.

To be honest, range-extended electric vehicles do have many technical pain points, such as noise and vibration from the range extender, questionable fuel economy, and battery costs and safety, etc.

These issues are currently unavoidable. For example, when the L1 is in a low-battery state, the noise from the range extender when it starts reaches 65 to 70 decibels, and the vibration is noticeable, affecting the driving experience.

Furthermore, even when the battery is depleted, the fuel consumption is about 8 to 9 liters per 100 kilometers, which is better than that of gasoline SUVs of the same period.

However, it doesn't have a significant advantage in terms of fuel consumption, and it's lower than traditional gasoline vehicles in high-speed conditions, making its disadvantages quite obvious.

Besides these, in terms of battery cost and safety, range-extended electric vehicles mainly rely on large-capacity batteries, which account for a relatively high proportion of the cost.

Furthermore, the immaturity of early battery thermal management technology led to issues such as reduced range in winter. The Weilai L1 is currently the model with the most severe range reduction among all Weilai's products.

In addition, the three-cylinder engine is the most controversial. It has always been considered a technologically outdated product, and the L1 is equipped with a self-developed three-cylinder engine.

In addition, the lack of competitors and comparable models seems like a good thing, but because of this, some consumers also have doubts about the reliability and resale value of L1.

The resale value of a car is something that all car manufacturers and consumers need to consider.

However, regardless of whether it's a disadvantage deliberately publicized by competitors, a real disadvantage, or a concern of consumers, the Weilai L1 is genuinely selling well, and that's a fact.

"Yes, the sales of the Weilai L1 have far exceeded our expectations. This model may be our first new energy vehicle with annual sales of 10 units."

"Therefore, in the design of Exeed, we decided to add range-extended electric vehicle models."

After taking a sip of coffee, Tan Jincheng smiled and said, "Aren't you worried it's just a transitional technology?"

Hu Zhengnan was a little embarrassed and gave an awkward smile: "I'm not worried."

When L1 was first launched, Hu Zhengnan, as a traditional automotive professional, actually shared the same ideas as others in the industry, and more or less looked down on range-extended electric vehicles.

This was the opinion of most of the technical staff at the research institute at that time. The fact that L1 was able to be approved was due to Tan Jincheng's strong advocacy.

By the way, at that time, only Li Xiang was completely able to accept Tan Jincheng's plan.

In the eyes of high-end technical talents, it's somewhat shameful to still be using three-cylinder engines in this day and age.

"Products that sell well on the market are not necessarily good products. Look at the top-selling items on Pinduoduo. You can place a few orders and see what they are like."

"Range-extended electric vehicles do have many weaknesses, but is that the main point? No; every product has its advantages and disadvantages. Pure electric vehicles have their problems, plug-in hybrids have their problems, and gasoline vehicles have their problems."

"What we need to do is not to make a bad product, but to sell our product by solving users' pain points."

"As I always say, product design must be user-centric. Technology is our foundation, but the key is whether the house is beautiful."

For the same price, a better foundation, and a more attractive interior and exterior design are what consumers really want.

Leveraging its first-mover advantage and policy benefits, and based on technological iterations, the Weilai L1 successfully addressed users' pain points.

"Yes, we've done that research too. Thinking about it from a reverse perspective, those disadvantages that the industry criticizes us for might actually be advantages in the eyes of users."

Compared to pure electric vehicles, range extenders solve current range anxiety and are suitable for users who have difficulty charging.

Compared to gasoline vehicles, range-extended electric vehicles have lower operating costs, more advanced technology, and in some cities, they can also enjoy policies that exempt them from driving restrictions.

Compared to plug-in hybrid vehicles, range-extended electric vehicles have a simpler structure, no gearbox, a lower failure rate, and a driving experience closer to that of pure electric vehicles.

The Weilai L1 supports a pure electric priority mode, which better suits users' pursuit of the quality of electric vehicles, not to mention refrigerators, color TVs, and large sofas.

Despite the heavy criticism, the fact that a car in the 30 RMB price range can offer the quality of a luxury interior is enough to confuse any quality-conscious customer.

“It’s also possible for Starway to launch range-extended electric vehicles; in principle, I don’t object to it.”

As a company, we should fully develop and maximize the potential of our best-selling products. Currently, in the field of range-extended electric vehicles, Weilai's first-mover advantage is still very obvious.

"Overall, the core competitiveness of range-extended electric vehicles can be considered as a user experience without any shortcomings. In the future, we will continue to develop new technologies."

"As for whether it is a transitional technology or outdated, that is not important."

The future trend of range-extended electric vehicles can be considered from the aspects of technological upgrades and scenario expansion, to launch models with longer pure electric range.

In terms of range extenders, breakthroughs have been made in thermal efficiency, and NVH has been optimized through acoustic encapsulation, active noise reduction, and other technologies.

"Exeed is going to launch a range-extended electric vehicle, which can be understood as a smaller L1 model. This way, we can attract more users in terms of both experience and price."

At this point, Tan Jincheng couldn't help but think of Yu Dazui. The models that Juhua collaborated with Xiaokang on in the early stages were pure electric vehicles, which were also SUVs.

However, in terms of sales, the results were dismal. At the earlier launch event, Da Zui also made remarks that looked down on range-extended electric vehicles.

However, after seeing the booming sales of range-extended electric vehicles, they quickly changed their minds, launched range-extended electric vehicle models, and rapidly increased sales.

Unlike Great Wall Motors, which has always prided itself on its technology, the new president of Great Wall Motors made it clear at the pre-sale launch of the Wey brand this year that Great Wall Motors would never make range-extended electric vehicles.

In addition, their chief growth officer has repeatedly expressed negative views on range-extended hybrid vehicles. If we were to say which domestic brand currently has the most objections to range-extended vehicles, it would definitely be Great Wall Motors.

Regarding joint venture brands, Volkswagen's CEO and executives have also expressed negative opinions about range-extended electric vehicles on multiple public occasions.

"I understand. That's what we considered when we decided to launch the range-extended version." "Alright, then you guys can do it. Now take me to the research institute to see what stage your design for the Starway is at."

Ultimately, the design of the vehicle is the most crucial factor, and Exeed's first model is priced between 10 and 15 yuan.

This price range is also the most competitive, and it's much harder to become an instant hit than with previous models like the ES6 and ES8.

"Let's go, we've already made preparations over there."

The design of new energy vehicles is faster than that of traditional vehicles. Exeed needs to launch its first model next year. Now that half the time has passed, although it has experienced a special period, the progress is still good.

"Not bad. Selling this model for under 15 yuan should be acceptable to the market."

According to internal standards, the first Exeed model, internally codenamed S01, is priced above 15 yuan.

According to Tan Jincheng's idea, the initial price at the time of listing should ideally be between 11.98 yuan and 15.98 yuan.

If the market response is positive, this pricing can enjoy some early market benefits, and when a large number of strong competing products are launched, there will be room for price reductions and promotions.

Furthermore, this price is comparable to BYD's Qin series.

"The design concept of S01 comes from Smart Design AI Quantitative Aesthetics, which integrates intelligent technology with aesthetic design, making the Starway a futuristic yet fashionable product."

"This also aligns with Exeed's brand strength."

After seeing the renderings, Tan Jincheng was quite satisfied. The S01 is positioned as an A-class intelligent hatchback coupe, which is also a compact car.

With the Exeed S01, Weilai now has two main sedan models in the sedan market: an A-class and a B-class sedan.

With the addition of Zhidou Auto, Weilai can gain a certain advantage in the 5 to 20 yuan price range through a complete product line.

There are no prototypes of the range-extended electric vehicle yet, but there are prototypes of the pure electric vehicle. Although they are rather rough, we can already see the specific reference configuration of the Exeed S01.

In terms of appearance, with a length of 4780mm, a wheelbase of 2815mm, and a body length of 1896mm, it looks compact yet imposing.

"Boss, take a look. We're planning to make the trunk bigger. This way, in addition to attracting younger users, we can also attract more families."

What about safety features?

"In terms of safety configuration, our technical standard is to use our own blade battery. According to the current national standard, many of our indicators far exceed the national standard."

"For the body-in-white, we use a combination of high-strength steel and aluminum alloy, with aluminum alloy accounting for 73% of the total. It also features six airbags and 12 active safety features."

"As for the chassis and powertrain configuration, we use a front MacPherson strut and rear torsion beam suspension, and the tuning level is acceptable."

"What about the weight?"

"The weight is roughly between 1600KG and 1700KG. While ensuring safety and performance, we will focus on lightweighting."

Mr. Tan is no longer the same Mr. Tan he once was. He may not be an expert on automotive technical standards, but he can be considered a semi-expert.

From exterior design to interior design, to safety features, and so on, the questions asked are all core issues related to automobiles.

Lightweighting of automobiles has always been a major problem that Weilai has been trying to solve, and the acquisition of Lotus was to supplement its technology in this area.

车辆重量每减少10%，电耗（油耗）可降低5%至8%，例如1.5吨的电动车比2吨车型，百公里电耗可能低1.5-2KWh，续航提升约为10%至15%。

Lightweighting can reduce battery capacity requirements and avoid the vicious cycle of increasing weight. For example, if the vehicle body is reduced by 200kg through lightweighting, the original range may not need to be increased by adding a battery, thus reducing battery cost and weight.

In addition, lightweight design can also improve power and handling performance. It's very simple to understand: light vehicles are definitely easier to handle than heavy vehicles.

However, there are many issues to be addressed in order to optimize for lightweight design, the first of which is to balance safety performance.

It is necessary to balance the relationship between safety and cost, and avoid the problem of a fragile vehicle body caused by excessive weight reduction.

To achieve a balance between these two aspects, we need to increase investment in technology to avoid excessive costs in the pursuit of a safety balance.

"The S01 is our attempt at lightweighting and is also the key to integrating Lotus technology, so everyone attaches great importance to it."

Overall, the S01 achieves a curb weight of 1.6 to 1.7 tons while ensuring safety through a body made of 73% high-strength steel and aluminum alloy, and a low center of gravity design, thus balancing lightweight design with performance.

Hu Zhengnan and the engineers explained the design concept and advantages of the Exeed S01 to Tan Jincheng step by step.

Creating a new car model isn't difficult for Weilai right now. For example, like Volkswagen, they could simply stretch or flatten a Weilai brand car, and that would be a new model.

However, doing so is meaningless, as Weilai is not a century-old company like Volkswagen with very mature technology and resources.

Volkswagen has higher brand recognition and a strong reputation, so even if the design is ugly, it won't necessarily result in a complete loss.

No, it won't work. Wei Lai needs to accumulate experience and enrich his technical reserves by working on different car models.

A car model can fail; for example, the ET7 is currently discontinued.

It didn't sell many units and didn't make much of a splash in the market. Strictly speaking, it was a failed model.

However, it was precisely because of ET7 that ET5 was developed, as ET7 provided ET5 with a wealth of experience.

The Starway S01 aimed for instant success, but failure is not unacceptable.

What Tan Jincheng could not accept was the failure to learn from the failure.

"I think it's good. Let's speed up the research and development and testing. If possible, I hope to launch it as early as possible, in time for next year's peak sales season of September and October."

In September, the domestic auto market showed a clear recovery trend, with both production and sales data hitting new highs for the year, and the passenger vehicle market also began to warm up.

It's conceivable that next year's peak sales season of September and October will be better than this year's. If pre-sales can officially begin during next year's peak season, Xingtu's chances of success will be even higher.

Hu Zhengnan smiled at the engineers and said, "Brothers, the boss has given us a task. Listen up, don't blame me for forcing you to work overtime."

As originally planned, Exeed's first model was to be officially launched at the end of next year, with sales starting around New Year's Day 2022.

However, market changes are beyond human control, and the entire company needs to formulate new strategies based on these changes.

For example, Exeed can be unveiled ahead of schedule, and if the market environment is not good, the release of new models can be postponed. It is impossible to remain unchanged.

"Everyone has worked hard. Overtime is indeed a troublesome thing, but if we can achieve an early listing, I will recommend everyone for credit."

The shortage of components, exemplified by the chip shortage, is becoming increasingly severe. For many small manufacturers, it's not just a matter of raising prices; they simply can't buy them at all.

However, the impact on companies within the Weilai system is minimal. Based on the current situation, Weilai's advantage in parts supply can be maintained until around June next year.

In addition to the V-shaped rebound in sales, there is another issue affecting the security of the supply chain.

That's across the Pacific Ocean, and there's going to be a new leader again. Tan Jincheng knows all too well who the new leader is.

Although he knew that replacing him with an older man wouldn't significantly improve the relationship between the two sides, at least initially, there was an expectation of easing tensions.

Even if there is only one expectation, or an expectation that is deliberately created, large enterprises will react quickly and adjust their strategies.

In fact, after major suppliers issued warnings in July, large automakers that had previously misjudged the situation began to quickly change their strategies.

BYD Semiconductor has been working overtime for the past few months, recruiting everywhere. The BYD Semiconductor branch in Ningbo has offered very good conditions in order to expedite the fulfillment of orders as much as possible.

"Although it's a bit unfair to make everyone work overtime, I still hope that we can maximize the benefits of the advantages we've accumulated over the past two years."

"So, everyone, please work hard. Also, a new batch of interns will be arriving soon. We'll have HR assign some to your project team so they can help out."

At this critical moment, Weilai's talent strategy of collaborating with universities, enterprises, and research institutions came into play.

The new interns may not be able to contribute immediately, but they have prior experience from holiday internships, so they can easily assist with tasks.

Sure enough, after Tan Jincheng said that, the engineers in the Exeed S01 project team looked much better.

The automotive industry is becoming increasingly competitive, and this has already begun at Weilai Auto. Tan Jincheng doesn't like this competitive environment, but there's nothing he can do about it.

If you want to sell cars all over the world, you can't avoid the necessary taxes.

"Okay, that's about it. You guys get back to work. Remember to be careful when you're working overtime."

As they were chatting, Tan Jincheng's private cell phone rang. It was Li Xiang calling. He hadn't been notified in advance, and no one knew what Li Xiang wanted to say.

"Let's go back to the district. Li Xiang called, I don't know what it's about."

"Hmm? I won't go, I'm a bit busy here."

Hu Zhengnan was also a little confused. In the normal work process, when the leaders of these departments and branches had work-related matters to report, they would usually contact Zhao Xinyi first, and Zhao Xinyi would coordinate the schedule.

(End of this chapter)