2003: Starting with Foreign Trade

Chapter 994 A Great Start to 2021
Starting from the first working day on the eighth day of the first lunar month, the competition among major companies began. Xiaomi Group's stock price surged by more than 6% that day, triggered by internal rumors that Xiaomi had initiated a car manufacturing project, with Lei Jun personally leading the team.

This time, Xiaomi did not deny it publicly, since the source of the news came from within their company. In addition, a series of automotive talents joined the company, and if they denied it again, it would be too obvious.

In fact, on New Year's Day, when Xiaomi's stock price reached its highest point since its listing, its public relations head publicly denied that Xiaomi would not manufacture cars. Subsequently, a series of large and small shareholders reduced their holdings, and Xiaomi's stock price fluctuated greatly.

This tactic left people stunned, but it brought great benefits to Tan Jincheng. According to ByteDance's share reduction plan, from the announcement of the share reduction plan to the completion of the share reduction, Xiaomi's stock price rose by more than 40% overall.

The plan to reduce holdings by 30 billion shares resulted in an additional HK$100 billion in expected profits, making them one of the biggest beneficiaries. Without their hype, the actual profits from a reduction plan exceeding HK$500 billion would certainly not have been as high.

Chrysanthemum Factory has also signed a comprehensive cooperation agreement with BAIC Blue Valley, becoming its second comprehensive cooperation partner after Xiaokang Motors, and will work with BAIC to create new models and accelerate its layout in the automotive field.

Baidu and Geely announced the establishment of Extreme Auto, with both parties joining forces to focus on L4 level autonomous driving. The first car is expected to be mass-produced in 2023, which is the predecessor of Extreme Yue. In addition, there is another piece of news that surprised Tan Jincheng: Byton, which was facing bankruptcy, actually found a new major investor, namely Foxconn.

Foxconn announced its acquisition of Byton and plans to begin mass production of the M-Byte, a pure electric SUV, in 2022.

Another company, which was previously questioned as a "PPT car manufacturer," suddenly released six new models, covering sedans to MPVs, making a big splash. However, everyone knows that this is just the end of its rope.

In addition, traditional automakers have also launched new models one after another. GAC, Changan, BYD, Geely, and even Xpeng and Wenjie have released new car teasers. Xpeng has brought out the P5 this time. The major automakers are rushing to release new models, which clearly shows that they feel the pressure brought by Exeed S01.

Instead of announcing the pre-sale results of the Xingtu S01 and Rainbow Zhidou immediately, Wei Lai launched a new round of large-scale marketing campaigns on the second day after the pre-sale began.

After reviewing the supplementary plan spearheaded by Li Xiang, Tan Jincheng approved it without much hesitation.

"It's not that our grades are bad, it's that they're too good. Our boss told us not to get too cocky."

The lack of immediate release of pre-sale data has raised some questions in the market. However, according to insiders at Weilai, the pre-sale results for these two models on the first day were actually quite good. After all, the large-scale publicity and marketing campaign in the early stages, as well as the hype generated by the online and offline launch events, must have had a positive effect.

Of course, the most important thing is that this model is priced very precisely, and it boasts the best intelligent driver assistance system in its class, which is quite a gimmick.

During the pre-sale period, Exeed S01 offered a limited-time benefit: the first 10,000 pre-order customers would receive a free upgrade to NOP2.0+, a high-level intelligent driving assistance system worth 20,000 yuan. This is quite an attraction for young users who value intelligent driving experience.

The intelligent driving experience that used to cost 300,000 or even 400,000 yuan can now be experienced for less than 200,000 yuan.

NOP stands for Navigate on Pilot, which is the abbreviation for the name of WILAY's latest intelligent driving system. The earliest intelligent driving system named by WILAY was NIO Pilot, which belongs to the first stage of WILAY's intelligent driving system.

As time progressed to 2021, Weilai's investment in the intelligent driving system gradually increased, and the logic became clearer. In order to distinguish it from the initial system, some changes were made to the naming system.

Unlike the old version, the new intelligent driver assistance system has been upgraded and optimized in both hardware and software, with significant improvements in areas such as automatic parking and navigation assistance.

Through a strategy of hardware pre-installation and software iteration, WILOT is currently in the first tier of the domestic intelligent assisted driving field, with Tesla's FSD and XPILOT being its counterparts.

When it comes to intelligent driver assistance systems, everyone claims their own is the best. Before Chrysanthemum (a Chinese tech company) truly matures, there are only three companies in China worth considering when it comes to intelligent driver assistance systems. Traditional manufacturers still lag far behind in terms of intelligent technology.

As for other emerging forces, only Li Bing's Wenjie is currently doing well, with decent performance, and can be considered a second-tier force.

Baidu? Baidu doesn't even have any cars on the road for testing. No matter how good the technology is, it's useless if it can't be verified. The cooperation with Geely is also because they saw this. The so-called technological gap is actually not that big. Everyone started at about the same time.

Real development depends on how cars perform on the road; technologies that don't receive user feedback are just empty talk.

Li Bing's strategic vision is actually quite good. You can't say that the battery swapping track is completely wrong. No matter how advanced fast charging technology is, or solid-state batteries that have not yet been commercially available, it is unlikely that either of them can completely replace battery swapping.

As a way to replenish energy for electric vehicles, the biggest controversy surrounding battery swapping is that it is too expensive. If the investment were not so high, many companies would choose battery swapping technology.

In addition, Li Bing also prefers to develop his own technology in areas such as intelligent assisted driving and vehicle systems. After resolving his survival crisis last year, Li Bing has set his sights on developing his own chips.

The chip shortage persisted in the first quarter. The domestic brand most affected was Great Wall Motors. Due to the severe shortage of chip supply, Great Wall reduced production and delayed delivery of many models. In addition, the new cars they released this year were still gasoline-powered vehicles.

A compact SUV priced between 7.89 and 11.29 yuan is called "First Love." It has to be said that Great Wall's strategy in recent years has become increasingly abstract, and the name "First Love" doesn't seem to fit the SUV at all.

Moreover, since the fourth quarter of last year, there has been a clear rise in the sedan and new energy vehicle series. At this time, it would be unwise to stick to gasoline SUVs and fight tooth and nail with Yuechi. Yuechi's new car plans for this year are all hybrids.

Like Tesla, although Weilai has also promoted its intelligent driver assistance system quite a bit, it has deliberately avoided leaving consumers with a fixed impression in terms of its focus, and both sides have unanimously downplayed this point.

Tesla projects an image of technology, high-end, and simplicity, while WILRA has consistently marketed itself as safe and luxurious. Currently, in China's new energy vehicle industry, WILRA uses the most robust materials and performs the best in terms of battery safety.

As for Xiaopeng, unlike the other two companies, Xiaopeng has limited resources. Therefore, in terms of specific marketing methods, it can only focus on intelligence and seek differentiated competition. This strategy is indeed very effective, and users are very receptive to it.

The first 10,000 customers who received the limited-time benefits for the Exeed S01 sold out in less than three days. However, subsequent pre-orders remain popular because, in addition to the limited-time benefits, Exeed is offering unprecedented comprehensive discounts.

To promote this mass-market model, Weilai has spared no expense.

The target consumer group is aged 25 to 35. Customized marketing plans are difficult to implement, but also very simple: use the most attractive offers to entice them to join the group of people who are replacing or buying a new car.

"For groups with limited financial resources, in addition to emphasizing the advantages of the intelligent assisted driving system, we have precisely positioned the price and offered a series of discounts to make this model the most cost-effective, so we don't have to worry about it not selling."

Li Xiang's first supplementary marketing plan was very bold: to focus on auto finance policies.

They came up with a zero down payment and three-year interest-free policy, which was a bold move that accurately addressed users' pain points.

This is a common practice for Tesla. In a sense, Tesla's very attractive financing policies are one of the reasons for their strong sales.

The ultra-long loan terms of up to 60 months, and the 12 to 24 month zero-interest policies offered during specific periods such as vehicle upgrade promotions, are very attractive.

Some plans also support balloon loans, allowing for deferred or lump-sum payments of the final payment. These highly competitive financial policies, combined with the car's performance and strong brand appeal, have brought Tesla a large number of customers.

However, not many companies dare to play this game. First of all, there is the issue of cash flow. Most new energy vehicle models are self-operated, and the zero down payment and interest-free policies reduce a lot of cash flow for these companies.

Car companies without sufficient strength wouldn't dare to do this, and there's also the risk involved; it could significantly increase the probability of bad debts.

Weilai also tried this kind of financial policy during the initial brand promotion period, but gradually canceled it for various reasons. One reason was that the investment was too large and cash flow needed to be replenished, and the other was the risk issue.

In recent years, internet giants led by Jack Ma have vigorously promoted advance consumption. As a result, online lending has increased and currency has become digitalized, which has made consumers less aware of the value of money and more extravagant in their spending.

Imagine holding a large wad of RMB to buy a mobile phone. Is that feeling the same as scanning a QR code or your face?

Consumers don't realize they're spending money, the credit system isn't perfect, and nobody knows where the money comes from. In Tan Jincheng's view, the risks are quite high; if someone really runs away with the money, there's nothing you can do about it.

However, the situation is different now. We are in an era of consumption downgrading, and last year this situation occurred again, so consumers are much more cautious about spending money. Now, if we use this kind of financial policy, the risk is much smaller.

Regarding preferential financial policies, Li Xiang also took advantage of Wei Lai's own car rental company to launch a financing lease service in addition to direct purchase, which flexibly changed the ownership structure.

Users pay monthly rent, and upon the expiration of the lease term, they can choose to buy out the vehicle, return the vehicle, or exchange it for a new one.

The advantage of this approach is a lower down payment and it doesn't involve personal debt, making it suitable for business users or those with short-term needs. Common options include lease terms of one to three years, with monthly rent adjusted based on the down payment and lease term.

If it's a buyout, the final payment will be made based on the residual value after the contract expires, which is typically around 50% to 60%.

While offering tangible discounts, Exeed S01 has also begun to generate buzz on social media platforms such as Douyin and Bilibili. The #MyFirstSmartCar# challenge launched on Douyin has seen a rapid rise in popularity, encouraging users to share their ideal car models.

In addition, there are a series of pop-up store experiences, test drive incentives, a seven-day no-reason refund policy for online car orders, and a policy where existing users who refer friends to purchase a car receive 1000 kWh of free charging credit for both parties.

In terms of word-of-mouth marketing, Li Xiang suggested that Wei Lai create his own KOCs (Key Opinion Consumers) by increasing the sharing of daily car usage videos to expand his influence on the internet.

Li Xiang also made many additions regarding aspects such as post-delivery public opinion management and user experience, implementing the details meticulously, demonstrating considerable dedication. The marketing strategy implemented according to Li Xiang's supplementary plan, although significantly more expensive, undeniably yielded excellent results. The Exeed S01 aimed for instant success, establishing a firm foothold in the mass consumer market.

"We're attacking BYD, but BYD is attacking us in return."

Having Li Xiang involved in the operation of Xingtu S01 serves two purposes: firstly, it's a key project this year, and secondly, it allows Li Xiang to adapt to the work rhythm of Weilai. Although they share the same boss, Weilai and Lotus are essentially two completely different companies.

Although Weilai also has a lot of capital backing, it can be proudly said that it is a purely Chinese private enterprise, because all decisions are controlled by Tan Jincheng personally, unlike Lotus.

Although Lotus is not large in scale, it is a real multinational corporation with many more factors to consider. As the controlling shareholder, Tan Jincheng has veto power over major corporate decisions, but he is more of a symbol.

Another aspect is reflected in the work pace. Compared to Lotus, which operates in a niche market, Lotus places greater emphasis on efficiency and needs to respond quickly to changes in the market. In the electric sports car sector, Lotus does not have many competitors now or in the future, so its work pace is "slower".

This was especially evident at the Heysel factory; simply put, Wei Lai was more demanding, and Li Xiang needed to adapt to Wei Lai's work pace.

"Yes, to be honest, it wasn't BYD that started it."

As a key model in the Dynasty series, the Han EV, launched last July, quickly attracted market attention after going through the production ramp-up phase, thanks to its unique dragon-face aesthetics and Chinese-style luxury interior.

As a high-end model in the Dynasty series, BYD has also invested heavily in marketing this model. Whether it's the consumer market or the high-end ride-hailing market, the Han EV and ET5 have a significant overlap.

Both of these models are actually targeting potential customers of the Audi A4L and BMW 3 Series. Whoever can leave a deeper impression on consumers will be able to reap a bigger share of the profits.

The ET5 has a first-mover advantage and no production capacity issues. It is technologically advanced and stylish while maintaining a sense of stability, so its sales have always been good. However, the BYD Han series is equally impressive. This model can be said to have brought BYD to the pinnacle of its image in the minds of consumers.

Before the Han series, what image did BYD project to consumers? To be honest, it was hard to describe. Even their current best-selling Qin series didn't have much to offer in terms of design.

However, the emergence of the Han broke this preconceived notion. The market exclaimed that BYD could actually build cars, and could actually build good cars. It was only natural that a model that turned around the company's image would sell well.

Just as Wei Lai coveted the mass market, BYD was not content with only focusing on the low-to-mid-range market. The difference between the two was that one started from high to low, while the other started from low to high. Both had their eyes on their respective tracks.

The emergence of Han marks the beginning of BYD's efforts and the display of its fangs. The huge resources invested in Xingtu S01 by BYD are not only a sign of respect for its competitors but also a necessary countermeasure.

With a huge investment of resources, the number of pre-orders for the Exeed S01 has been rising steadily. Although no data has been released, internal production has begun to accelerate. Like any model, the Exeed S01 will also go through a production ramp-up phase in the early stages of its launch.

The market is both calm and blind. Once sales figures provoke consumers, it's not a good thing for the Exeed S01, which is in the production ramp-up phase. For Volkswagen models, fast delivery is key.

However, regardless of the circumstances, the number of deliveries of the Exeed S01 in its first full month (May) will definitely exceed 10,000, which meets the expectations of everyone at Weilai. As long as the service can keep up, the success of this model is basically guaranteed.

For Weilai, the Exeed S01 is the king of the pure C-end market. Tan Jincheng wants to make it the "Yuechi A1" of Weilai's new energy vehicle track, making it the sales leader. Monthly sales of over 10,000 are just the beginning.

Amidst the power struggles among automakers, March arrived before we knew it.

The first major event in March was naturally the Two Sessions. Starting from the 1st, Tan Jincheng went from Ningbo to the capital to attend the annual meeting. In recent years, going to Beijing in March has almost become a routine.

However, in the automotive industry, Huawei, a major player in the tech world, made headlines at the beginning of the month with a big announcement: the Huawei AS, a collaboration between Huawei and BAIC, featuring Huawei's HI full-stack solution, began its pre-launch campaign. This sparked a heated discussion across the internet about car manufacturers becoming contract manufacturers.

With Xiaokang in the lead and BAIC in the back, the offensive of Chrysanthemum is getting stronger and stronger. Before the cars are even produced, the stock prices have already reacted. Since November last year, Xiaokang's stock price has risen by 120%, and the newly joined BAIC Blue Valley's stock price has also risen sharply by 30%.

On the day the news was announced, BAIC BluePark's stock price immediately hit the daily limit.

"No wonder people say that the main arena for car manufacturing is never in the factory, but in the capital market. When will you officially announce that you're making cars?"

Having arrived in Beijing, one must make a visit to Xiaomi. ByteDance's advertising platform and Tan Jincheng have completed their share reduction plan. Currently, the two together hold 14.4 billion shares of Xiaomi Group, representing 5.98% of the company, changing from the second-largest shareholder to the third-largest shareholder.

Based on the closing price on February 26, the combined market value of the two holdings in Xiaomi Group is approximately RMB 306.14 billion, which is still a very large figure.

"You're criticizing others, but aren't you doing the same thing yourself? As for when we'll announce it, March, the exact date will depend on the situation."

From strategic investor to general investor, and then to financial investor, Tan Jincheng has accompanied Xiaomi through ten years. The two sides were once the closest comrades-in-arms, supporting and helping each other.

However, after the massive acquisition of Meizu, Xiaomi's car manufacturing venture, and the reduction of its shareholding, the relationship between the two sides became somewhat delicate, but Tan Jincheng's personal friendship with Lei Jun remained unchanged.

Business is business, and life is life.

"That's true. With the capital market in such a frenzy, hard work really isn't as effective as an IPO."

Today, Tan Jincheng and Lei Jun jointly participated in an interview program at Xiaomi Group's industrial park. While the reporters were still setting up the scene, the two chatted casually in the lounge.

Lei Jun was referring to Lotus's IPO, and the listing date has been set for March 5, 2021, the first Friday of March.

After nearly half a year of IPO process, Lotus, which is known as the first stock in the concept of luxury pure electric sports cars, is about to officially land on the New York Stock Exchange with "LOT". Li Xiang and the Lotus team have already flown to North America to prepare for the bell-ringing ceremony.

Lotus, which stood out in the frenzied new energy market of 2020-2021 and successfully went public, can be considered to have squeezed into the final round of new energy vehicle brands. Looking at the new energy vehicle brands, IPO and listing for financing are almost inevitable. However, companies that fail in the process of going public are basically doomed.

Due to domestic policy adjustments, data security risks, anti-monopoly measures, geopolitical tensions, and other factors, regulatory scrutiny of Chinese companies listing in the US has become increasingly stringent. As of March 1st in the first quarter, only two Chinese companies had listed on the US stock market.

Including Lotus, there were only seven companies in the entire first quarter. Besides Lotus, the more well-known ones were two internet companies, Zhihu and Waterdrop.

Zhihu, which went viral for its jokes about people in a certain country who had just gotten off a plane, finally went public after many years of operation, catching the last train of the internet boom.

Although both sides are facing increasingly stringent regulations, Lotus's listing did not encounter any major problems. Although it is controlled by Oriental Capital, the shareholding structure includes Malaysian consortia and European and American investment institutions led by Wall Street, which can be said to have brought together the interests of multiple parties.

In addition, as a global consumer product, the automotive industry does not involve any safety issues. Moreover, new energy vehicles are currently one of the hottest sectors, and everyone wants to cash out at this time.

"I would like to ask Mr. Tan why you did not attend the Lotus bell-ringing ceremony, which should have been a memorable moment."

During the annual Two Sessions, Tan Jincheng always receives interviews from all kinds of media, some professional and some non-professional, with a wide variety of questions, and sometimes even entertainment reporters.

Many people stopped on the way to the venue to ask questions and take photos with the attendees.

"The successful listing of Lotus is the result of the efforts of all Lotus employees and management, and has little to do with me, so there is no need for me to steal the limelight."

Following the IPO, Lotus' total share capital reached 11.23 billion shares. It was highly sought after by investors, and the original offering price of $20.5 was pushed up to $21.2. The market capitalization at the time of the IPO was $238.08 billion.

Based on the current real-time exchange rate of 6.6, Lotus's current valuation has reached as much as 160 billion RMB, making it another company with a market value of over 100 billion RMB.

Lotus raised $25 billion in its IPO. In Lei Jun's words, that's how many cars they would have to sell to make that much money.

Based on his diluted 45.46% stake, Tan Jincheng's holdings through ByteDance's advertising platform are worth as much as 700 billion yuan. This enormous wealth has attracted countless eyes and puts some pressure on Tan Jincheng.

However, it brings many benefits to Lotus. The online buzz surrounding Lotus has reached an unprecedented level, and no amount of marketing spending can compare to the impact of this IPO.

Against the backdrop of the bull market in the stock market in 2020, the market index rose from 2800 points in May of last year to 3700 points in February, and the wealth of the rich increased more than several times. Even though the stock market has now corrected, the new energy sector is still very hot.

"Alright, Mr. Tan is quite modest. So, could you talk about the sales figures for the Exeed S01?"

There is a lot of curiosity about the pre-orders for the Exeed S01. There are various reports that it is selling very well, but no one knows the specific numbers.

(End of this chapter)