Rebirth 08: Rise from copycat phones

Chapter 571 Shouting for Free Trade
As we enter May, the annual launch event for Hailan Auto is about to begin.

Bao Yongyan, CEO of Hylan Auto, appeared in Spain, Europe, and subsequently participated in the production launch ceremony of Hylan Auto's Spanish factory with local officials and executives from partner companies.

"Hailan Automotive is committed to bringing better products to European consumers and leading the way into the era of intelligent mobility!"

"This factory will produce the world's most advanced smart electric vehicles, featuring a top-of-the-line Level 4 driver assistance system, state-of-the-art solid-state batteries, and all models produced will be tailored to the European market to better meet the needs of European consumers!"

"This factory has the most advanced manufacturing technology, and its initial annual production capacity can reach 150,000 vehicles. In the future, we will further expand the factory's production capacity to 200,000 vehicles per year!"

"This will be the most advanced and largest smart electric vehicle factory in Europe!"

"This will also create more than 5,000 direct jobs and drive more than 30,000 indirect jobs in the local area!"

"Hailan Automotive has always placed great importance on Europe and will bring people the most advanced high-tech intelligent electric vehicles now and in the future, creating more job opportunities!"

At the production launch ceremony, Bao Yongyan repeatedly emphasized to the local public and media the factory's advanced technology, the convenience it brings to European consumers, and the jobs it creates for the local community!
They never mention that this factory is just a pure assembly plant... Hailan Auto does not produce core components such as batteries, motors, and lidar here.

Even many core components supplied by European companies, such as steering and braking systems used in traditional vehicles, are not actually manufactured in Europe.

Although these subsystems were provided by European companies, they were actually manufactured in factories set up by European companies in China, then shipped to Spain in Europe, and finally assembled here... This was not requested by Xu Shenxue, but rather chosen by these European companies themselves.

The reason is actually quite simple: even if the core components provided by these European companies are manufactured in China and then shipped over, the cost of shipping and tariffs is still cheaper and more profitable than if they were manufactured locally in Europe.

According to a series of cooperation agreements reached between Xu Shenxue and European consortia in the automotive industry, 30% of the hardware for Hailan cars exported to Europe must be sourced from European companies.

However, these European companies directly placed these orders in factories in China for production... This has nothing to do with Xu Shenxue.

Not every conglomerate is like Xu Shenxue, considering employment and domestic demand when doing anything.

Most conglomerates are purely capitalist... as long as they make money, how they get the money is not important.

Of course, while the core components are all imported from China, other non-core components, such as the vehicle frame, are manufactured or sourced locally.

Hailan Auto's Spanish factory is the product of a collaboration and exchange of interests between Xu Shenxue and a local conglomerate!
For Hyland Automotive, the Spanish factory and the previously small-scale Hungarian factory have allowed Hyland Automotive to fully open up the EU market, without having to face additional tariffs and other punitive prohibitions, such as anti-dumping measures.

The Blue Cars produced by these two factories can then be sold freely in the EU market!
At the same time, Hailan Auto also receives a certain number of import tariff exemptions each year... This part mainly targets some high-end models that are not assembled and produced in Europe, such as Hailan SEC, Hailan MEV, Hailan SLC, etc. These high-end models have low sales volume to begin with, so it is impossible to set up a production line in Europe. They can only be sold as complete vehicles through export.

In exchange, the European consortium, mainly composed of German and French companies, secured orders for some of the spare parts for the Hailan cars produced at the two Hailan assembly plants, accounting for about 30%, and also obtained paid licenses for a large number of Hailan's electric vehicle patents... Incidentally, Hailan Auto has been involved in the electric vehicle industry for a relatively long time and has developed many exclusive patents, which are also very valuable.

To acquire these patents from Hailan Auto, one must either offer up their own high-value patents in exchange.

Alternatively, one must offer additional benefits in exchange... such as trading market access for patent licensing.

At the same time, Xu Shenxue also agreed to supply core components to European car companies, mainly batteries, primarily semi-solid-state batteries and lithium iron phosphate batteries.
The supply of automotive-grade chips mainly includes EYEQ chips, PX chips, and many other automotive-grade auxiliary chips, as well as LiDAR, automotive-grade high-definition cameras, and other components.

In Spain and Hungary, the assembly plants provided employment and tax revenue.

After exchanging numerous benefits, many obstacles to Hailan Auto's entry into the European market were removed.

Moreover, for Xu Shenxue, it was not only about opening up the European car market, but also about making his automotive industry chain more deeply integrated into the European region... Selling large quantities of advanced batteries and chips is equivalent to gaining control of the supply chain.

If anything changes in the future, we need to consider whether the supply chain will be disrupted and production will stop before the other party turns against us.

Without batteries, computing chips, and automotive-grade auxiliary chips... what's the point of producing electric vehicles? Let alone electric vehicles, without the EYEQ driver assistance system, even slightly high-end gasoline cars would have to be discontinued!
Because all the driver assistance functions used in gasoline vehicles worldwide, such as lane keeping, brake assist, adaptive cruise control, and cruise control, are all built on the EYEQ driver assistance system of Zhiyun Group!

Whether it's BMW, Mercedes-Benz, Audi, Honda, Toyota, Volkswagen, GM, Cadillac, Hyundai... they all use the EYEQ system.

The monopoly of Zhiyun Group in this field is actually higher than that in the server GPU field... At least server GPUs have AMD as a substitute, so they can grit their teeth and use it when necessary.

However, there is currently no substitute in the field of driver assistance systems!
What? You're saying there's also a PX chip platform that you can research driver assistance technology on your own? Sorry, the PX chip platform also belongs to Zhiyun Group.

The Zhiyun Group is essentially playing a game of internal conflict.

Of course, these car manufacturers and some semiconductor manufacturers are now trying to change this situation. Qualcomm is trying to make automotive-grade computing chips, and some car companies are also developing their own chips, but this will take time.

Currently, only Tesla has been relatively successful in developing its own computing chip... However, the performance of Tesla's self-developed computing chip is not as good as that of the PX chip, so Tesla uses both types of chips together.

Other manufacturers, on the other hand, haven't been able to produce it yet.

The points mentioned above don't even cover the more core, upstream aspects... such as the various minerals needed to manufacture lithium batteries, typically lithium ore!
Xu Shenxue's Liuhe Investment, with its five or six mining companies, controls over 90% of the world's lithium mining capacity, as well as other essential minerals... They can cut off your supply just like that.

Then there's the rare earth controlled domestically... or more precisely, the rare metals extracted from rare earth. Although this aspect isn't under Xu Shenxue's control, if anything happens, he can easily strangle foreign manufacturers.

However, there's no need to bring these things up now... it wouldn't be good to scare the children.

Let's continue to advocate for global free trade!
Xu Shenxue is now a staunch advocate for global free trade.

They often advocate for global free trade in public... while some people in Europe, the United States, India and other countries are deeply worried about free trade.

why?
Because Xu Shenxue's various industries are powerful enough, he is confident that he can take over the market as long as the other party dares to open it up.

However, the other party is not confident in resisting the fierce impact of Zhiyun Group and Hailan Auto's numerous top-tier products... Once opened up, it will lead to the sudden demise of many industries.

Therefore, free trade is something that constantly changes with the times.

Previously, it was Western countries that shouted for free trade; now it's China's turn to shout for free trade!

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Bao Yongyan attended the production launch ceremony of the Hailan Auto Spanish factory in Europe, and then went to the Hungarian factory for inspection.

I also attended several automotive forums, high-level meetings, gave interviews to reporters, and even appeared on local television programs.

In these public occasions, Bao Yongyan has been touting the keyword "intelligent mobility," talking about autonomous driving, solid-state batteries, and the various benefits that Hailan cars bring to Europeans!

When Bao Yongyan was in Germany, he was asked by reporters whether Hailan Auto had any plans to invest in and build a factory in Germany.

Bao Yongyan expressed his approval: Germany is a major automobile country in Europe and the world, and our Hailan Auto also wants to cultivate the market here. If there is an opportunity in the future, we will also consider investing in and building a factory in Germany.

They also cited Zhiyun Group's semiconductor factory in Germany as an example to emphasize that their boss, Xu Shenxue, is optimistic about Germany. Hailan Auto, which is also Xu Shenxue's business, is similarly optimistic about Germany.

The German semiconductor factory is the only large-scale semiconductor factory of the Zhiyun Group overseas... It is also currently the only large-scale, high-tech semiconductor factory in Europe!

Given the precedent of Zhiyun's German semiconductor factory, Bao Yongyan believes that Hailan Auto could follow suit and invest in Germany in the future.

Of course, these are all hypotheticals... No one can predict the future!
If Xu Shenxue reaches a new cooperation agreement with the German consortium in the future and makes new exchanges of benefits, then it is possible that he will invest in building a factory in Germany... but the possibility is relatively small.

Germany is such a place that manufacturing costs are so high that even German auto parts manufacturers have gone out of business. For Hailan Auto to go there is simply asking for trouble!

However, when he's out in the world, he'll naturally make promises and hype things up as much as he can... Whenever Bao Yongyan is interviewed by Indian media, he always expresses his optimism about the Indian market and says that he might invest in and build a factory in India in the future!

In reality, Highland Automotive will never invest in building a factory in India, not even an assembly plant... That place is too bizarre. Even if Highland Automotive is incredibly powerful, if they dared to go in, they would go in standing up and come out lying down.

There's no need to go looking for trouble!
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Bao Yongyan's trip to Europe was not only to oversee the start of production at the Spanish factory, but also to promote the upcoming launch of the new generation of Hailan cars.

In mid-May, Hailan Auto will hold what may be the most important press conference in automotive history: to launch a series of models equipped with solid-state batteries!

Not only Bao Yongyan, but also several other senior vice presidents of Hailan Auto have recently traveled to various overseas markets, ostensibly to inspect local factories and investigate the market, but in reality, they have been using various public occasions to continuously promote concepts such as intelligent mobility, solid-state batteries, and L4-level autonomous driving.

Even in the United States, it's no exception... The North American president of Hyland Automotive, who is in charge of the MITE brand and the Mexican factory operations, took several MITE brand models to an auto show in the United States. When interviewed by reporters, he talked extensively about concepts such as intelligent mobility, solid-state batteries, and autonomous driving.

The latter two are easy to discuss, but the concept of "intelligent mobility" is a new concept that Hailan Auto has been vigorously promoting in the past six months.

To make travel smarter and more convenient... this is specifically reflected in autonomous driving, coupled with a high degree of intelligence within the vehicle.

Some promotional videos depict a scenario where a person, after finishing get off work, arrives at the company entrance and a self-driving car automatically appears in front of them. After getting in the car, they sit down in the back seat, close their eyes, and rest. The car's intelligent assistant automatically adjusts the temperature and humidity to a suitable level, informs them, handles personal matters, and even turns on some home appliances such as air conditioners in advance.

The Hailan car automatically starts and navigates the streets and alleys before smoothly arriving at the doorstep. The oxen and horses disembark and enter the house, the Hailan car automatically closes its doors, and then proceeds to the garage next door, turning off the lights!
Driving...? That's out of the question!
According to Hailan Auto's vision for the future, people will not need to drive at all!
The intelligent mobility scenario showcased by Hailan Auto... it's not a fantasy, but a real and tangible reality.

Hailan Auto's Level 4 autonomous driving technology, combined with its integration with Zhiyun Group's smart home system, can truly deliver what's shown in the promotional video...

The concept of intelligent mobility is a key focus of Hailan Auto's marketing and promotion this year!

Therefore, in recent months, many executives of Hylan Auto have been touting this concept in public!

Intelligent mobility, solid-state batteries, and L4 autonomous driving technology are the key marketing focuses for Hailan Auto this year.

This is also a key marketing concept for the launch of Hailan Auto this year!

May 16th, Shenzhen Hailan Auto Headquarters!

A large number of people from the automotive industry, media professionals, representatives from partner companies and suppliers, as well as some Hailan Auto users and fans who won tickets in the lottery... and then there are a large number of self-media bloggers who go wherever the trend is.

They all gathered at the headquarters of Hailan Auto.

Get ready to witness the major launch event of Hailan Auto... Everyone knows that Hailan Auto will fully promote solid-state batteries this year. Although the news is old, it is still very eye-catching.

For example, information such as which models it is used in, its price, and its range are all things that many people are concerned about.

Although Aqua Auto released the Aqua SR3 last year, the world's first and currently only car equipped with a solid-state battery, the Aqua SR3 is a supercar. Theoretically, a low-end model could be bought for a little over a million yuan, but in reality, there is no low-end model; all models are sold as high-end versions. A single Aqua SR3 costs over a million yuan in China, and many countries abroad generally impose high tariffs on such luxury vehicles, making the price even higher... Very few people can afford it.

Besides, the Aqua SR3 is just a toy; it's not suitable as a business vehicle, a family car, or even a daily commuter…

This is also a common flaw in supercars: although they are expensive, the price is not the core reason for their low sales. The main reason is that they are not practical, and even their value for showing off is not that great. Only a few second- or third-generation rich kids like to drive them. Most wealthy people don't actually drive supercars...

Wealthy people prefer to buy luxury models that seem more conventional and practical, such as the Air Max SLC, Air Max SEV, Mercedes-Benz S-Class, Mercedes-Benz G-Class, BMW 7 Series, and BMW X5.
Simply put, the Aqua SR3 has nothing to do with ordinary people!

Ordinary people, and even high-income groups, who want to use electric vehicles with solid-state batteries, will have to wait for Hailan Auto to release various ordinary models before they can buy them.

And the models that Hailan Auto is going to release today belong to this category!

When a large audience gathered, Xu Shenxue arrived at the headquarters of Hailan Auto a step ahead. However, Xu Shenxue will not host the press conference himself this year, but will hand it over to Bao Yongyan.

Xu Shenxue's hosting of press conferences is also carefully planned. Apart from personally hosting the annual flagship press conference of Zhiyun Group without fail, he hosts other press conferences on a case-by-case basis.

Generally speaking, he will only personally host press conferences for major technological breakthroughs.

For example, at last year's joint launch event between Hailan Auto and Zhiyun Group Robotics, which marked the world's first release of solid-state batteries, Xu Shenxue personally presided over the event.

This year's spring launch event unveiled a new generation of virtual reality devices, including the highly influential Yun VW L1 Youth Edition... Don't be fooled by its low price and lackluster performance; it holds immense strategic importance, hence Xu Shenxue personally presided over the event.

At other times, Xu Shenxue generally doesn't personally host the launch of regular new products.

Although the launch event for Hailan Auto this year is important, Xu Shenxue personally presided over the launch of the core solid-state battery last year. This year is just about large-scale application, so Xu Shenxue is not in charge of it and has let Bao Yongyan handle it.

As evening approached, the press conference officially began!
Bao Yongyan began hosting the press conference on stage, first announcing the improved versions of various series of models under Hailan Auto.

From the Ocean Blue SLC to the Ocean Blue SEV and Ocean Blue SEC, all three luxury models utilize solid-state batteries.

Then there's the mid-range SeaBlue SLMC, SeaBlue MEV, and then the entry-level sedan SeaBlue YEV!

In addition to the usual upgrades and facelifts, these models are using solid-state batteries in their higher-spec versions.

The Aqua SLMC, after adopting solid-state batteries, has a top-of-the-line long-range four-wheel drive version with a combined range of 1,300 kilometers. Of course, the price of this version is also unusual. With the optional 4.2 driver assistance system, namely the second-generation L4 level autonomous driving system, the price reaches an astonishing 750,000 yuan.

This marks another price increase for the Aquamarine SLMC!
The main problem is that solid-state batteries are still too expensive. They cost more than twice as much as semi-solid-state batteries of the same weight!
Previously, the top-of-the-line Blue SLMC with a range of over 700 kilometers, plus L4 autonomous driving, was priced at around 550,000 yuan... Now, with the adoption of solid-state batteries, the range has increased by 1,300 kilometers, which is equivalent to an additional battery cost of over 100,000 yuan. Adding this cost together, it's more than 700,000 yuan!
In modern electric vehicles, battery costs account for more than 50% of the total cost, and in long-range solid-state battery versions, this proportion will further increase to 60% or even higher.

It depends on how many batteries you put in...

In addition to the top-of-the-line version with a range of 1,300 kilometers, the SLMC also has a more affordable solid-state battery version!
The high-end version with a range of 800 kilometers is priced at 580,000 yuan... This is in comparison to the previous semi-solid battery version with a range of over 700 kilometers.

The 600km and 500km versions, which have even lower ranges, continue to use semi-solid-state batteries!
People often say that the Ocean Blue SLMC costs 350,000 RMB to get on the road... but what they usually mean is the version with a range of just over 500 kilometers, dual-wheel drive, and standard L3 assisted driving.

You get what you pay for!
It's impossible for Hailan Auto to sell consumers a Hailan SLMC equipped with a solid-state battery, a range of over 1,000 kilometers, and four-wheel drive and L4 autonomous driving for 300,000 yuan... Hailan Auto would lose a fortune if they did that.

In addition to the Ocean Blue SLMC, the Ocean Blue MEV and Ocean Blue YEV also have solid-state battery versions, which are only available in the high-end versions.

The cheapest version is the Hailan YEV with a 700km range. This version of the Hailan YEV is equipped with a small solid-state battery, but it costs more than 400,000 yuan, which is not cheap.

As for the Ocean Blue YEV, priced at over 200,000 yuan, it will naturally continue to use semi-solid-state batteries.

After introducing the upgraded versions of these existing models on stage, Bao Yongyan also unveiled the Hailan HEV, which Hailan Auto had been preparing for two years!

The latest and final piece of the Hailan Auto family: an entry-level mid-size SUV!

According to Bao Yongyan, this SUV is the culmination of Hailan Auto's automotive technology over the past years, using a large number of advanced technologies to reduce costs and improve quality.

Well, to put it simply, it utilizes a lot of mature technologies to reduce costs.

Many of the core technologies of this car are basically copied from the Hailan YEV model. Even the parts are highly common, and the core components such as the power system are basically the same.

However, although the core technology may seem to be old, it also represents maturity and stability, and most importantly, the cost can be controlled.

Most importantly, this car is cheap!

After subsidies, the domestic price is only 270,000 yuan... making it the cheapest SUV model in Hailan's lineup.

This price is enough to make many ordinary families decide to buy it... although there was a similarly priced, or even cheaper, Aqua YEV before.

However, the Hailan YEV is a sedan, while many consumers, especially those in China, prefer SUVs, particularly those with more space and a more imposing appearance.

This is also why the Hailan HEV wasn't made into a compact SUV, but rather a larger mid-size SUV... There's no way around it, Chinese people just like larger SUVs.

Meanwhile, many overseas consumers also prefer larger SUVs, such as in the North American market, the South American market, and even people in the European market tend to like big cars.

It's just that in developed countries, large-sized vehicles are mostly mid-to-high-end models, which are more expensive and unaffordable for many people... This is even more evident in the realm of gasoline-powered vehicles.

Unlike Hailan Auto, all of their models are mid-to-large size... Even the entry-level Hailan YEV sedan is a B-segment sedan... and the current Hailan HEV is also a mid-size SUV.

On the other hand, the new brand, Ella, which focuses on the mid-to-low-end market, has produced some compact models... to reduce costs.

However, the Hyland brand and the 'Mite' brand, which is jokingly referred to as a rebadged Hyland car and focuses on the North American market, do not have compact models; they are all mid-to-large-sized models.

Hailan Auto attaches great importance to the Hailan HEV model. Although it is positioned as an entry-level mid-size SUV and is considered a low-priced model in the Hailan brand, it has great ambitions to achieve high sales volume.

Therefore, it is quite generous in many aspects. The high-end model also has a four-wheel drive system, a top speed of 250 kilometers per hour, an L3 assisted driving system, and is also equipped with a solid-state battery, with a maximum range of 700 kilometers, and the price is only 420,000 yuan.

The price-performance ratio is excellent!
What? Consumers want a range of over 1,000 kilometers and also want an SUV with Level 4 autonomous driving?

Take a look at the Hailan MEV... It perfectly meets your needs!
With a high-end solid-state battery that can achieve a range of 1,200 kilometers, a highly intelligent real-time four-wheel drive force distribution system, intelligent chassis lifting technology, and a whole host of other advanced technologies, the Hailan MEV, equipped with the top-of-the-line second-generation L4 autonomous driving system, can be had for 780,000 yuan.

A new product launch event for Hailan Auto has sparked much discussion... and among the many opinions, many ordinary people have expressed their disagreement.

Among all the models from Hailan Auto, the solid-state battery version is too expensive...

Among the many models equipped with solid-state batteries, the cheapest, the Hailan YEV, costs 400,000 yuan... while the Hailan HEV costs 420,000 yuan.

The Ocean Blue SLMC costs 560,000 yuan, while the Ocean Blue MEV costs 600,000 yuan.

Too expensive!

Ordinary families simply can't afford it!
What they really want is the entry-level Hyundai YEV model priced at 250,000 yuan, which also features a solid-state battery... Even if the range is a bit lower, 400 to 500 kilometers would be acceptable.

Hailan Auto was just bragging that solid-state batteries and semi-solid-state batteries cost about the same for the same battery capacity... I don't need more range, just give me a small solid-state battery with the same range.

This way, your costs don't increase, while we can obtain safer solid-state batteries!
Unfortunately, this is not possible at present... because Hailan Auto's solid-state battery production capacity is insufficient, and this year it can only meet the solid-state battery needs of one million vehicles at most.

To enable all models under the Hailan brand to use it, it is estimated that it will be at least next year or even the year after.

As for the ERA sub-brand, this model is unlikely to use solid-state batteries for many years to come.

The cost of building solid-state battery production capacity is too high, and it is also limited by the supply of raw materials and manufacturing equipment. According to Hailan Auto's plan, it is very difficult to expand the production capacity by one million vehicles a year, let alone more.

The production capacity of several new core raw materials, especially solid electrolytes for solid-state batteries and metallic carbon materials for anodes.

These two key materials are not determined by Hailan Auto itself, but by Fairy Mountain Holdings... they are Fairy Mountain Holdings' products.

However, it is much more difficult for Fairy Mountain Holdings to expand the production of these two new core materials than for Hailan Auto to directly manufacture batteries!

The preparation of metallic carbon materials, in particular, is one of the most advanced industrial technologies on Earth today. It requires a whole host of top-of-the-line equipment and processes, and its technical difficulty is not much easier than manufacturing semiconductor consumables for seven-nanometer or even five-nanometer processes.

This interconnected process has resulted in relatively low production capacity for solid-state batteries, making significant increases difficult.

To significantly increase production capacity, the production capacity of upstream rare metals, top-tier manufacturing equipment, and raw materials must also increase simultaneously... Even with China's strong industrial foundation, this is not something that can be accomplished in one or two years.

This is based on China's well-established industrial foundation; it would be impossible to do this in any other country.

If several of the most crucial raw materials, especially solid electrolytes and metallic carbon materials used as negative electrodes, cannot be produced, what's the point of developing solid-state batteries?

Even if they could produce these two core materials, sorry, they don't have several rare metals used in them... so it's still useless.

China controls the vast majority of rare metals extracted from rare earth elements... It's not that we have a lot of rare earth mines, but that our refining technology is so advanced that foreigners have to sell their rare earth minerals to us for refining...

Solid-state batteries are actually downstream end products in this entire industry chain... Foreign competitors focusing solely on solid-state batteries themselves are not very useful!

Even if Hailan Auto were to release its hybrid oxide polymer solid-state battery technology for free, no other country could possibly manufacture it.

They lack the ability and the foundation.

They have nothing to offer, yet they want to use Hailan Auto's hybrid oxide polymer solid-state battery. They're practically asking for trouble...

This is also a characteristic of top-tier technology products; the entry barrier is extremely high!
With the continuous advancement of technology, Fairy Mountain Holdings, Zhiyun Group, and Hailan Auto have become increasingly prominent in their respective industrial chains in terms of technological and supply chain advantages... and these advantages have not been accumulated overnight.

It was accumulated gradually over the past ten years by Xu Shenxue and his team of over a million R&D personnel!
At the same time, Xu Shenxue's success also relied on the industrial technology accumulated in China over decades and the large number of top talents cultivated by the education system... Without this industrial foundation and without millions of engineers, Xu Shenxue would have been unable to achieve his goal of having a scientific research system but lacking the necessary resources.

Success is never accidental, nor does it exist in isolation!

(End of this chapter)