2003: Starting with Foreign Trade

Chapter 997 Bestseller, Bestseller (Seeking Monthly Tickets)
12 days, 5000 vehicles.

The Exeed S01, which was shrouded in mystery before its delivery, announced its April delivery figures on May 1st. These figures represent an annualized delivery capacity of 150,000 vehicles.

"This achievement is already among the top 10 globally. This is an absolute blockbuster. Wynn is already a very competitive company and deserves BYD's respect and attention."

On May 8, at the expansion ceremony of Fudi Battery's Shancheng factory, Chuanfu Ge (a nickname for a company representative) openly stated that the expansion of the Shancheng battery factory, which will increase the production capacity to 20GWh, is to pave the way for the supply guarantee of Han EV and DM-i models.

Despite his outward composure, the boatman couldn't hide his helplessness. The popularity of the Exeed S01 severely squeezed BYD's living space. In the mass-market new energy vehicle market, BYD, which has been deeply involved for many years, holds an absolute advantage with its plug-in hybrid technology.

However, the ultimate form of new energy vehicles is still pure electric. Whether it is plug-in hybrid or range-extended electric vehicles dominated by electric vehicles, they can only be considered a transition, which can be seen from the data.

Since 2015, the proportion of pure electric vehicles in the annual sales of new energy vehicles has remained stable at over 70%. With the decrease in battery costs and the improvement in range, the proportion of pure electric vehicles in China even exceeded 80% in 17 and 18.

BEV (pure electric vehicle) dominates the low-priced commuter car and high-end market, such as Wuling, Tesla, and Weilai, while PHEV (plug-in hybrid electric vehicle) targets family users and alleviates range anxiety.

Mainstream consumers prefer pure electric vehicles, which is one reason why BYD's sales have been unable to break through for so many years, while Wynn, which conforms to the current mainstream consumption, has been able to maintain stable growth.

In the field of hybrid power, although WIL has been investing in research and development over the years, the progress has not been significant, and it has no advantage compared with traditional car companies. However, WIL has managed to find a different path and has started to play with range-extender technology.

With its highly controversial L1, Weilai entered the hybrid market. Although it has been criticized for its large size and features, it has to be said that after several years of development, the Weilai L1 has become a near-100,000 RMB model.

In the first four months of this year, the Weilai L1 delivered more than 1.8 vehicles, with an average monthly sales volume of more than 4500 vehicles. Despite the impact of the Spring Festival, its performance has become increasingly stable.

This is a model with an average selling price of over 30 yuan. According to market assessments, the Weilai L1 alone could bring Weilai over 200 billion yuan in revenue this year.

Wei Lai has carved out a place for itself in the hybrid market in an unimaginable way.

In the pure electric vehicle sector, Weilai is the first among domestic brands. Now, with its pure electric advantage, Weilai is starting to make a push in the sub-15 yuan market with two models. The Rainbow Zhidou's performance is not amazing, but it is also decent.

For a brand that has gone through bankruptcy restructuring, and with consumers still having reservations, this performance can be considered a success.

The performance of Exeed S01 has amazed the entire market. Its popularity and production capacity have far exceeded market expectations. The only question that remains is whether Exeed S01 can keep up with the large volume of deliveries.

It's worth noting that WLA has always been known for its excellent service. Tesla's public relations crisis at the Shanghai Auto Show was driven by various factors, but essentially it was because its service couldn't keep up with the growth in delivery volume.

As a completely new team, will the Exeed S01 encounter this situation?
"BYD has its advantages, but we can't rest on our laurels. The launch of the Han EV and the expansion of the battery factory in Chongqing are some of our latest responses to market competition."

"As Mr. Tan said, we are not afraid to compete with any company. Competition will only make our market better and better. While congratulating Exeed S01 on its sales, we will also work hard to catch up."

Tesla's public relations crisis was somewhat alleviated when Tesla compromised by announcing the opening of user data and the establishment of a data center in China. And it must be said that Tesla agreed to build the data center particularly readily this time.

With the Tesla hype waning, the delivery volume of Exeed S01 became the hottest topic in the automotive market in early May. According to the delivery data provided by Exeed S01, 1.5 Exeed S01 vehicles will be delivered throughout May.

Meanwhile, starting in June, the delivery cycle for the Exeed S01 changed from four weeks to six weeks. The exact number of orders for the Exeed S01 has not been announced, but the delay in the delivery cycle also indicates the popularity of this model.

According to market expectations, the Exeed S01 is very likely to break the record of the fastest delivery of 100,000 domestic new energy vehicles.

When attending public events, Boatman inevitably gets asked how he views the performance of his competitors. Not only Boatman, but other business leaders also face the same question. It can be said that in the first week of May, the automotive industry was dominated by Exeed S01.

Even the main brand of Weilai was overshadowed.

For years, BYD has been playing the role of the pursuer, consistently lagging behind in sales. Pure electric vehicles have been BYD's Achilles' heel, while the Han EV is BYD's breakthrough product.

Judging from the sales figures, the Han EV has achieved this.

As of April this year, BYD's cumulative sales of new energy vehicles reached 80,000 units, of which the Han EV contributed 33,000 units, accounting for more than 40% of the brand's total sales.

The success of the Han EV has given BYD great confidence, and internally they have even shouted the slogan of surpassing the Weilai and becoming the number one domestic new energy brand.

From BYD's internal perspective, they do indeed have the strength in this area, with a dominant position in hybrid vehicles, continuous investment in the pure electric vehicle field, and rapid expansion of their model lineup. The Dynasty series has already covered Qin, Tang, Song, Yuan, and Han.

In addition, the newly launched ocean series has also received positive market feedback.

Of course, most importantly, through the Han series, the brand-new language design has been recognized by consumers, turning around BYD's image in the minds of consumers and re-establishing its image in the C-end market. This is BYD's biggest highlight this year.

BYD has the confidence to do so.

However, the development of Weilai is also rapid. What impressed Brother Chuanfu the most was not the sales volume. With the rapid development of new energy vehicles, as companies with the same first-mover advantage, the sales growth of both BYD and Weilai is a natural outcome.

The growth of Wei Lai made the boatman realize that BYD felt pressured by the conversion rate of its technological research and development.

The automotive industry is driven by technology. A car company can launch one or two blockbuster models by a bit of "luck". For example, the now bankrupt Zhongtai had the ability to ignite the market with its Zhongtai 2008 and Porsche Tai in a short period of time.

However, if you want to maintain the vitality of a hit product and continue to produce hit products, technological investment is essential. But technological investment is not simply about how much money you spend. If your technological direction is wrong, no matter how much money you spend, it won't help.

As a car company founded in 2008, Weilai is not young after 14 years, but it is not a long-established company either, and its technological foundation is not that deep.

In the early days of Weilai's establishment, Tan Jincheng's operating model was actually incomprehensible to many people. He did things haphazardly, either by acquiring and investing in a certain parts company, or by engaging in mergers and acquisitions at home and abroad, and occasionally by venturing into the Internet industry.

They even bought a mobile phone brand, giving the impression of not focusing on their main business.

In terms of car manufacturing, after launching the Yuechi series, for a long time it was like Geely, grabbing a series and squeezing it to death, supporting Weilai to move forward.

In his early days, Tan Jincheng gave the impression of being involved in finance, with a strong interest in mergers and acquisitions and investments. His companies went public one after another, while car manufacturing did not seem to receive much attention.

Although Tan Jincheng has repeatedly expressed his determination to build cars, his credibility remains questionable.

Now, 14 years later, Tan Jincheng has gradually clarified the operating model of the Weilai brand: with finance as the root, lithium batteries, including system OS, intelligent driving solutions, and chip manufacturing as the trunk, and industrial chain layout as the leaves, driving Weilai's vehicle manufacturing.

Some seemingly unrelated plans from more than a decade ago have gradually come into play, demonstrating the exceptional precision of Wei Lai's technological investments.

Compared to traditional automobiles, WILTE has advantages in the power battery industry and intelligent driving systems. These new technologies are important factors in attracting young users. Compared to emerging companies, WILTE also has its own industrial chain advantages.

Weilai's production capacity is far beyond what new players can match. Even Tesla, with hundreds of thousands of orders, cannot pose an absolute threat to Weilai in the short term because its order volume and production capacity conversion rate simply cannot be matched.

One very important factor behind Tesla's quick compromise this time is the production capacity issue. The planned start-up of the Berlin Gigafactory was postponed again on May 3 due to environmental approval issues, which seriously affected its future plans in the European market.

This also makes Tesla more reliant on the production capacity of the Shanghai Gigafactory, and the production capacity of the Shanghai Gigafactory is far from reaching its limit. Let's not forget that this year is still a special year.

However, Tesla is not the only company facing trouble in the European market; Wei Lai is also experiencing similar difficulties.

During the May Day holiday, Tan Jincheng personally flew to Germany. In addition to inspecting the Jincheng New Era Battery Factory in Thuringia, Tan Jincheng also intends to have his own vehicle manufacturing plant in Europe.

"These foreigners are really a headache. They're obsessed with environmental protection. I'm speechless."

"Um, boss, we can just vent to each other in private. We really need to be careful about what we say and do in public."

Yu Liguo, the head of Weilai's European region, reported the work progress to his boss who had traveled a long way, which drew a barrage of complaints from the boss. If Tesla's German factory could successfully start production, it would be absolutely beneficial to Weilai, or rather, Jinshidai.

Jinshidai has a 14GWh battery factory in Thuringia. In addition to supplying batteries to BMW and Mercedes-Benz, Tesla is a potential major customer. Once Tesla's Gigafactory in Europe is officially operational, the factory in Thuringia can expand its production accordingly.

Localized supply not only reduces costs for Tesla, but also for Jinshidai.

“I know, this is all done privately, so our plan is not to build a complete vehicle manufacturing plant in Europe. How’s the information you asked me to investigate going?” Tesla’s Gigafactory in Germany is plagued by environmental problems, with frequent shutdowns and apologies for cutting down even a couple of extra trees. The various antics during its construction have been quite an eye-opener for Tan Jincheng.

The battery factory in Thuringia has also encountered similar problems, but fortunately, we are quite familiar with this region, and having connections makes things easier.

"All things considered, Ford's plant in Salle Louis is the most suitable."

Yu Liguo is here today to report on his work, so he was naturally well-prepared. Like Tesla, Weilai also has plans to have its own vehicle manufacturing plant in Europe. If they don't build it themselves, they will just buy it directly.

"The alternative is Magna Steyr's factory in Austria, which can be operated under an OEM model."

After saying that, Yu Liguo handed over the documents he had prepared in advance. Tan Jincheng took the documents and read them carefully. After several months of investigation, Yu Liguo had identified three potential acquisition (OEM) targets.

Germany is the first choice, of course. As the most important partner in Europe and the economic center of Europe, Germany is where most of WIL's core assets in Europe are located.

The first potential target is Daimler’s idle factories in Bremen or Rastatt. During the electrification transition, some production lines in these two factories are idle. They have advantages such as high-end German manufacturing standards, well-developed infrastructure, and mature supply chains.

However, the acquisition is also the most difficult. This is a Mercedes-Benz factory, one of the symbols of old Europe. Mercedes-Benz may not be willing to sell it directly to a competitor. Even if they were, they would have to consider the attitude of the German government.

In addition, the biggest obstacle is the union. Even if Mercedes agrees with the German government, the union may still sabotage the deal.

The second option is Ford's plant in Saarlouis, Germany. At the beginning of this year, Ford announced its European contraction strategy, which will gradually shut down the production capacity of gasoline-powered vehicles. This plant produces the Focus model and is scheduled to cease production in 2022.

The highly modernized factory, with an annual production capacity of 25 vehicles, a superior geographical location, convenient logistics, reliable cost of electrification conversion, and Ford's willingness to sell are undoubtedly its biggest advantages.

As for the difficulty, it also comes from the union, but it's a little easier for Ford than for Mercedes-Benz.

The third is Magna, a contract manufacturer for niche brands. This factory in Austria manufactures for brands such as Mercedes-Benz and BMW. It has flexible production capacity and a light-asset model that does not require acquisitions or signing contract manufacturing agreements. This allows for rapid production while avoiding policy risks.

The disadvantages are also very obvious: the cost of OEM manufacturing is high, and Weilai needs to give a large amount of profit to third parties. Moreover, long-term reliance on third parties is not conducive to brand building.

In addition, Yu Liguo also prepared factory acquisition plans such as Opel. After Opel was acquired by PSA in 2017, its Eisenach factory in Germany had a serious overcapacity of 15 vehicles per year, which was relatively moderate in terms of capacity.

However, like Mercedes-Benz, PSA may not be willing to sell. In addition, compared with Mercedes-Benz and Ford's factories, this factory is relatively inferior in terms of both location and modernization.

"Ford's factory is indeed the most suitable option; as for the contract manufacturing plan, let's forget about it."

The contract manufacturing model isn't different; for example, Volvo manufactures Polestar for Geely. However, the two situations are different. Keeping the profits with Volvo while being able to quickly launch Polestar in the European market is the most advantageous for Geely.

However, Weilai does not have this advantage. Even acquiring the Opel factory would be more beneficial to its long-term strategy than contract manufacturing, unless all acquisitions are rejected.

"Given the current political environment, if we want to achieve globalization, it is necessary to have our own factory in Europe. Therefore, my opinion is still that we should directly acquire it and talk to Ford."

If the acquisition of the Ford factory is successful, it will not only serve as a springboard for Proton's globalization, but it will also help Proton enter the European market. By acting as an OEM for Proton in Europe, it can generate profits.

As for Lotus's factory in Heysel, Tan Jincheng had not considered it at all, as its production capacity was very limited and its geographical location was not good.

“Okay, then I’ll organize a team to talk to Ford.”

Ford's plant in Saarland covers an area of ​​approximately 260 million square meters and includes complete facilities such as vehicle production lines and paint shops. It currently employs about 6000 people. Based on valuation references, a similar plant is valued at approximately 3 million to 5 million euros.

Considering Ford's eagerness to exit the European gasoline vehicle market and its willingness to accept some discounts, Yu Liguo also had an assessment of the electrification transformation, which is estimated to be between 100 million and 200 million euros.

In addition to additional costs such as labor resettlement and environmental compliance, the overall production cost is estimated to be between 5 million euros and 10 billion euros.

"Things are really expensive here in Europe. Oh well, this price is reasonable."

At the current exchange rate of around 7.55, acquiring a complete factory alone would cost nearly 80 billion yuan, but compared to Tesla's self-built factory, it's incredibly cheap.

Tesla's factory in Germany was originally planned to cost 40 billion euros, but as of now, Tesla has announced that the figure is 58 billion euros, which is a serious overspending.

Tesla spent 800 million euros on environmental protection alone. Not only did it spend more money, but it was also repeatedly halted by the courts, causing serious delays in the construction period. It was as if it was being completely controlled.

Who says foreigners don't know how to be creative?

"Yes, it is indeed not cheap, but fortunately we have another best-selling model, and it is selling better and better in Europe. Having our own factory is indeed urgent."

"That's true. If we localize, we can reduce costs even further, which is how we can maintain our competitiveness."

The commissioning of Tesla's German Gigafactory is very beneficial to Jinshidai's battery supply chain system, but localization will be a major test for Weilai Auto's export business.

"Speaking of which, Starway is quite popular in Europe."

The ET5 and ES3 are WILAY's main models in Europe. These two models sell well in Europe, which has also helped WILAY gain a certain brand influence in some parts of Europe. In addition, by competing with Tesla, Tan Jincheng, the young richest man in China, has also become quite popular in Europe.

In the automotive industry, a blockbuster model is usually defined as a car model that performs exceptionally well in terms of sales volume, market popularity, user reputation, or industry influence. Its definition and threshold vary depending on the market, brand positioning, and era.

However, setting aside all other factors, the most important characteristic of a blockbuster product is undoubtedly its sales volume, and sales data is the most direct indicator.

In the realm of gasoline-powered vehicles, mainstream models priced between 10 and 30 yuan are considered best-selling if they achieve monthly sales exceeding 1.5 units, such as the Yuechi A1 and Lavida.

In the new energy vehicle sector, for models priced under 200,000 yuan, a monthly sales volume of 10,000 units would be considered a blockbuster under the market conditions of that year. For models priced between 200,000 and 400,000 yuan, a monthly sales volume of 5000 units would also be considered a blockbuster.

Of course, not all cars priced under 200,000 yuan that sell over 10,000 units are bestsellers. There's also the concept of a pseudo-bestseller, where some car companies announce orders exceeding 10,000 units, but actual deliveries are sluggish. This is pure nonsense.

In addition, there are electric vehicle models like the Aion series that rely on the B-end market, with 70% of their sales coming from ride-hailing services, resulting in low consumer acceptance. These cannot be considered blockbuster models.

True blockbuster products always come from the consumer market.

Currently, Weilai has three blockbuster models in the new energy vehicle sector: ET5, L1, and S01. The ES3 is also a near-blockbuster model. With four models targeting consumers, covering low, medium, and high-end markets, the product lineup is very reasonable.

Compared to BYD, Weilai's product portfolio is somewhat thin, but in terms of product strength, it is by no means inferior.

"That's a good thing. Who knows, there might be a way out for your career in the entertainment industry."

Seeing that the conversation had almost reached its conclusion, Yu Liguo took the opportunity to invite Tan Jincheng to his home. Having been stationed in Europe for many years, Yu Liguo was practically settled there and had even bought a house. Compared to the work style in China, the work here was relatively more relaxed and more suitable for his age group.

Tan Jincheng readily agreed: "Okay, I'll cook you a meal."

“That’s great. After living in Germany for so many years, I still miss my boss’s cooking.”

To be fair, among car company executives, Mr. Tan, who used to sell boxed lunches and work as a non-professional chef in his past life, is absolutely unmatched. Everyone who has spoken to him speaks highly of him.

"Okay, let's get some barbecue and beer. With you here, I don't have to eat their hard bread anymore."

May in Germany is a transitional period from spring to summer, and it's still quite hot in some areas. Beer, as one of Germany's signature dishes, is still quite good, and the sausages are also delicious.

It has the hearty enjoyment of eating large chunks of meat, as well as the craftsmanship of bread fermentation and sausage making, making it far superior to England across the Channel.

Of course, having some of our own barbecue this season, paired with their beer, would be even more perfect.

P.S.: Requesting monthly votes at the end of the month!
(End of this chapter)