Rebirth 08: Rise from copycat phones

Chapter 581 Vcool Electronics Car Manufacturing
As September arrived, while the outside world was still discussing the listing of Hailan Auto Group and major mobile phone manufacturers were releasing various models of mobile phones, the situation was quite different.

Xu Shenxue then visited the automotive R&D and testing center of Vcool Electronics Group in the suburbs!

The purpose is very simple: to see the intelligent electric vehicle that Vcool Electronics has been developing for a long time!

Vcool Electronics Group has wanted to develop electric vehicles for more than a year or two; they've wanted to do it for a long time. However, in the early stages, the intelligent electric vehicle industry chain was not mature, and the technical requirements were very high, resulting in high costs for electric vehicles. Therefore, although Vcool Electronics had relevant plans, it only carried out preliminary research and development and did not actually invest a lot of resources in developing new vehicles.

However, as the domestic electric vehicle industry chain gradually matures, it has given opportunities to non-technical companies like Vcool Electronics... and they are all actively entering the smart electric vehicle industry.

Currently, it's not just Hailan Auto, BYD, and other traditional automakers making electric vehicles in China; many other companies, even real estate companies, are also getting into the electric vehicle business!

In this environment, it's not too remarkable for Weiku Electronics Group to make smart electric vehicles... Huwei and Dami next door are also doing it.

However, making electric vehicles is not easy... Although Vcool Electronics Group is also Xu Shenxue's company, they cannot directly obtain the various advanced technologies from Hailan Auto, especially autonomous driving technology, battery technology, and advanced motor technology!
Xu Shenxue has many companies under his management, but that doesn't mean all of them will cooperate fully... especially when they are involved in the same industry and there is competition.

At most, they will only provide some limited support; don't expect any other core technological advantages.

Hailan Auto also has a large number of shareholders, hundreds of thousands of employees, and a group of management and core technical personnel holding a large number of shares... It's impossible that just because Weiku Electronics Group is another company of Xu Shenxue, a major shareholder, they would directly give away all kinds of advanced technologies for free.

I wouldn't even sell it, let alone give it away!
For example, with solid-state batteries, Hailan Automotive has explicitly rejected Vcool Electronics Group and will not supply solid-state batteries for automotive power in the short term.

If Vcool Electronics is talking about solid-state battery pouches for various portable devices, then we're all in good hands. We can offer you the same treatment as Zhiyun Group... discounted prices for sister companies, priority supply, no problem.

Hailan Battery, a subsidiary of Hailan Automotive Group, is eager to expand its customer base... Not to mention selling to Weiku Electronics Group, Hailan Battery is currently in contact with most smart terminal manufacturers and portable computer manufacturers, including Apple, Samsung, Huawei, Xiaomi, OV, and Dell!

Don't expect any supply this year; production capacity is insufficient, and the orders from Zhuyun Group are too large.

However, next year, after Hailan Automotive further expands its solid-state battery pouch production capacity, it will be able to supply solid-state battery pouches to the aforementioned potential customers.

Therefore, barring any major surprises, next year a large number of flagship mobile phones, computers, tablets and other portable terminal devices from various brands will use solid-state batteries, and in a few years it may become widely adopted.

However, solid-state batteries for automotive power... it's useless no matter who comes along. Even though Weiku Electronics Group is also Xu Shenxue's company, don't expect to get solid-state batteries for automotive power...

This is a core technological advantage of Hailan Auto, and it's impossible for them to sell it to competitors of other automakers.

The same goes for autonomous driving technology; that's Hailan Auto's most prized technology, and they won't supply it to others, not even for money.

The market value of Hailan Auto is almost entirely based on solid-state batteries and autonomous driving technology... These are things that cannot be sold to external parties, let alone to competitors.

Under such circumstances, it won't be easy for Vcool Electronics Group to develop smart electric vehicles!

However, even without Hailan Auto, Vcool Electronics can still develop intelligent electric vehicles by leveraging China's top-tier electric vehicle supply chain.

A large number of traditional and emerging car manufacturers in China also cannot obtain Hailan Auto's core technology. They still rely on the domestic supply chain to develop smart electric vehicles, and many of them are doing quite well.

China's new energy vehicle industry has developed to a fairly mature stage...

Although Hailan Auto has the biggest name, there are actually a whole bunch of other new energy vehicle brands besides Hailan Auto, such as BYD, which focuses on plug-in hybrids. BYD is a typical example, and its annual production and sales volume is now over one million units. It not only sells well in the domestic market, but also performs quite well in overseas markets.

Then there are other domestic automakers that have developed various electric vehicles that are selling well, such as GAC, BAIC, Chery, and some new energy vehicle manufacturers. Some have sold hundreds of thousands of units, while others have sold tens of thousands.

Even joint venture manufacturers have achieved great success, such as the MINI, a cheap entry-level microcar with exaggerated sales, selling more than 400,000 units in a year.

Domestic automakers, whether they are traditional automakers' own brands, joint venture brands, or emerging brands, are all rapidly rising.

However, the brilliance of Hailan Auto is so dazzling that many people subconsciously overlook the fact that other car manufacturers' new energy vehicles have also sold quite a lot!

Thanks to Hailan Auto's continuous efforts in promoting the development of the industrial chain over the years, coupled with the strong domestic support for electric vehicles, China's new energy vehicle industry has experienced explosive growth for many years.

Last year, the sales volume of various new energy vehicles in China was around five million units, and the penetration rate was already quite high.

However, this number has increased significantly this year, as the sales volume of various new energy vehicles in China reached an astonishing 350 units in the first half of this year alone.

Moreover, the market continues to grow, and production capacity is also increasing.

Many analysts believe that the annual sales of new energy vehicles in China are expected to reach eight million units…

Such a huge domestic market has also fostered a highly developed and mature domestic electric vehicle supply chain, resulting in Chinese electric vehicles being extremely competitive when they go global.

Therefore, in recent years, many domestic car companies have followed in the footsteps of Hailan Auto and entered the overseas market.

Hailan Motors has made a name for itself in the field of intelligent electric vehicles overseas, establishing an excellent reputation for Chinese electric vehicles... but Hailan's cars are expensive!
Foreigners aren't all rich; the vast majority come from ordinary families, and many of them can't afford a Lavida car.

At this point, many foreign consumers who cannot afford the Hailan car will naturally turn their attention to the products of car companies such as BYD, Chery, and Geely... They have high appearance, all kinds of miscellaneous functions, and are cheap and cost-effective.

Therefore, the great success of Hailan Auto on a global scale has not only brought them tremendous brand reputation, but has also indirectly boosted the overall brand image value of Huaxia Electric Vehicles.

This is similar to how people think that German brands like BMW, Mercedes-Benz, and Audi are very good, so they assume that Volkswagen, which is also from Germany, is very good...

Everyone says Japanese cars are fuel-efficient.

American cars are known for their high fuel consumption.

In reality, different car manufacturers within the same country, and even different brands under the same car company, have vastly different performance and quality... It's impossible to give a general overall assessment.

However, most people don't differentiate them in too much detail...

In recent years, the great success of Hailan Motors, especially its focus on high-end luxury, autonomous driving, and advanced battery technology, has led many overseas consumers to believe that Chinese electric vehicles are quite good!
But honestly... it's very inappropriate to put other second- and third-tier domestic electric vehicle brands together with Hailan Auto and treat them as a whole.

Leaving aside technological advancements, let's just talk about the build quality of the vehicles...

Hailan Auto targets the high-end luxury market, with higher car prices that justify the high manufacturing costs.

However, many entry-level models are priced at just over 100,000 yuan... and the cost of the power battery takes up a large part of the price. In order to compete in the market, all sorts of random functions have to be added, such as large color TVs and large refrigerators.

This results in extremely high cost pressure for these entry-level models... Manufacturers must reduce manufacturing costs to a certain level in order to maintain a certain gross profit.

Under such circumstances, although they are all qualified products, it is impossible to provide you with the ultra-high quality standards of Hailan Auto at such a low manufacturing cost... Parts and workmanship are all about getting what you pay for.

Of course, these are all qualified products and work without problems under normal use. In addition, the great reputation of Chinese electric vehicles that Hailan Auto has built in overseas markets has also helped them, making their overseas expansion relatively smooth!

Therefore, in the past two years, especially since last year, many domestic automakers have been exporting new energy vehicles overseas. Some are purely for export, while others have set up factories in other countries. Overall, the trend of going global is quite good.

The explosive growth of the domestic market and the expansion into overseas markets have, in turn, made the domestic new energy vehicle industry chain more mature and complete.

Upstream core industries, such as various automotive-grade chips and driver assistance technologies, are being developed by Zhiyun Group.

In the field of power batteries, there is Ningdai Battery, the world's largest third-party power battery supplier, which can also provide semi-solid-state batteries with very good technology... For cheaper options, there are also lithium iron phosphate batteries.

Besides Ningdai Battery, there are many other third-party power battery manufacturers.

In the field of motors, there are even more domestic companies, including several first-tier brands and countless second- and third-tier brands. Their customers range from top international car brands to various low-speed electric vehicles.

For in-vehicle infotainment systems and intelligent cockpits, there are many domestic companies that can provide third-party solutions, including solutions from leading manufacturers as well as solutions from small workshops.

There are also a lot of suppliers that can provide body design solutions.

Various spare parts, such as ABS systems and steering systems, can be supplied by a large number of manufacturers, including top international brands as well as second- and third-tier domestic brands.

Finally, there's assisted driving... Zhiyun Group provides the complete EYEQ system solution, which can achieve L2+ level assisted driving... If you have the capability and confidence, you can also purchase PX chips and various sensors, then write your own algorithms, train models, and do it yourself. Basically, the entire electric vehicle industry chain can be found in China, and there are many suppliers, ranging from first-tier brands to fourth- and fifth-tier brands.

Even for vehicle manufacturing and registration, there are plenty of poorly managed car companies that can provide these services, and many new energy vehicle manufacturers are following this path.

So these days, let alone a large company like Vcool Electronics Group, even an ordinary company with the intention can actually produce an electric vehicle through China's well-established supply chain. Of course, whether it's well-made or not, and how much it costs, is another matter entirely.

Vcool Electronics' current car manufacturing also follows this assembly and design route... However, unlike Vcool Electronics' previous smart terminal business, which was purely OEM, this time Vcool Electronics has embarked on the path of building its own factory!
Initially, Vcool Electronics wanted to continue with the OEM model, but it quickly discovered that the OEM model was unreliable in the automotive industry because it was impossible to control the OEM factories, which meant it was impossible to control production quality, and there were too many problems.

Finally, Vcool Electronics made a bold move and directly acquired a poorly managed car company, thereby gaining access to the corresponding basic car manufacturing plant and related technical personnel. As for qualifications, that was not an issue.

Vcool Electronics Group is a large company with a market value of hundreds of billions of dollars. It is the second largest company in China's smart terminal industry. It is not short of money and has enough corporate influence. Applying for car manufacturing qualifications is not a problem for it. It was successfully approved at the beginning of this year.

After obtaining the license, they continued developing new cars while simultaneously building the factory!
Vcool Electronics has now successfully developed its first smart electric vehicle and invited Xu Shenxue to come and see it!
Xu Shenxue has always maintained a neutral stance on the matter of Weiku Electronics Group's plan to manufacture cars... His main focus in the field of intelligent electric vehicles is Hailan Auto. Even if he were to pursue a multi-brand strategy, he would do so by building sub-brands through Hailan Auto.

Therefore, Xu Shenxue wasn't particularly supportive of the management team at Vcool Electronics Group's decision to manufacture cars, but of course... he didn't oppose it either.

With the smart terminal market now entering a saturated phase, and Vcool Electronics Group experiencing sluggish growth, Bai Qiwen and other management decided to enter the smart electric vehicle industry in order to seek new growth points. Strictly speaking, this was not wrong, and could even be considered a very good strategic decision.

After all, a large number of high-tech companies are working on new energy electric vehicles, which shows how large the market potential is in this field.

Therefore, Xu Shenxue maintained a neutral stance of neither supporting nor opposing VK Electronics Group's foray into electric vehicles.

Let the management team figure it out themselves; if they do well, they'll receive stock options as incentives.

If things go wrong and even result in huge losses, I'll quit and get out...

Under these circumstances, Vcool Electronics embarked on its journey to manufacture cars, and it truly allowed them to overcome numerous difficulties along the way, ultimately producing its first intelligent electric vehicle...

It's important to understand that Vcool Electronics is genuinely building cars, unlike some so-called new energy vehicle manufacturers that come to scam investors or other ordinary companies that have switched industries and just put on a PowerPoint presentation.

They are truly doing the whole vehicle design step by step, contacting major supply chains, adapting and optimizing various parts, and then building their own electric vehicle architecture and intelligent cockpit architecture... They already have thousands of R&D personnel alone.

At the same time, they also invested a huge amount of money to build a high-standard car manufacturing plant.

It is precisely because Vcool Electronics invested a large enough amount of money to build the factory, rather than trying to get something for nothing, that they were able to successfully obtain the vehicle manufacturing license.

Their years of hard work and dedication have finally paid off.

At this moment, Bai Qiwen, the CEO of Weiku Electronics Group, introduced the four-door sedan in front of Xu Shenxue, which had a rather beautiful appearance and resembled a coupe.

"Chairman Xu, this is our first smart electric vehicle: Xiaolan 2020. It is positioned as a mid-range B-class pure electric sedan. We expect to target the market around 200,000 yuan, and at the same time we will also launch some four-wheel drive high-end models, raising the price to 300,000 yuan to enhance the brand value."

"This also aligns well with the target user group of our Vcool Electronics' Little Blue brand's high-end models, with a high degree of overlap!"

"Regarding the vehicle's exterior design, we selected this one after evaluating the designs from multiple international design teams. It features a design language that emphasizes youthfulness, fashion, and technology!"

Xu Shenxue saw the car... circled it once, then glanced at Bai Qiwen!
The 2020 Little Blue is literally described as a sedan with a coupe-like appearance!

However, whether viewed from the front, the side, or even the rear, it looks very similar to the new two-door sports car, the Aqua SEC7, released last year, except that the two doors have been replaced with four doors.

Well, this thing doesn't look like the Ocean Blue SEC7 at all, but it gives the impression that it does.

If you just changed the logo to Hailan Auto, people who didn't know better might think that Hailan Auto had launched a four-door version of the Hailan SEC7...

You're plagiarizing so blatantly, aren't you afraid Bao Yongyan will come and beat you up...?

Bai Qiwen continued, "The overall structure design of the car, especially the chassis structure design, is a structure that we developed ourselves. We have combined many excellent components from our suppliers to design and integrate our first-generation chassis structure!"

"In terms of driver assistance, in order to shorten the R&D time and reduce technical risks, we initially used the EYEQ6 system from Zhiyun Group, which provides L2+ driver assistance functions that combine vision and LiDAR!"

"The intelligent cockpit and interior design of the vehicle were developed in-house by our team. We have incorporated in-vehicle artificial intelligence under our self-deployed GTAI framework, which can recognize voice and control the vehicle."

"For many components, we use first-tier brands as much as possible, or at the very least second-tier brands. Many of these brands are also suppliers for Hailan Auto!"

"The power battery uses Ningdai Battery's semi-solid-state battery. The standard version offers a pure electric range of 700 kilometers, while the long-range version offers a pure electric range of 800 kilometers!"

As Xu Shenxue listened and observed, he had to admit that the people at Weiku Electronics had taken a very clever approach... They directly copied Hailan SEC7, yet somehow managed to leave no obvious evidence of plagiarism... It wasn't just similar in form, but in spirit. However, similarity in spirit cannot be considered evidence of plagiarism; at most, one could say it was borrowed!

However, the Hailan SEC7 is Hailan Auto's new generation of flagship two-door hardtop sports car, with prices starting at over 600,000 yuan and reaching nearly one million yuan for the high-end version.

Vcool Electronics has produced a four-door sedan that looks very similar, with a starting price of only 200,000 yuan, which will surely attract many consumers to buy it.

If you can't afford the Aqua Blue sports car, buying the low-spec version of the Blue sports car is fine too... Moreover, the 2020 Blue is a four-door, five-seater car. It is essentially a regular mid-size sedan, just with a sports coupe shell!

In terms of costs, according to Bai Qiwen's description, they have been well controlled. Based on the pre-sale price, this car should be able to achieve a gross profit of over 25%.

For a newcomer to the automotive industry, maintaining this gross profit margin is already quite good.

Of course, whether it can be sold in the future, and how much can be sold, depends on the market's acceptance!
Bai Qiwen and his team didn't intend to compete directly with Hailan Auto... In terms of pricing, their target market was other electric vehicle manufacturers and the B-segment car market of joint venture gasoline vehicles!

The main target price is around 200,000!
As for the 300,000 RMB four-wheel drive long-range high-end model, nobody expects it to sell much. It's just used to boost the brand and maintain the price system... The message is, "Our car costs 300,000 RMB, just to give consumers face!"

However, the main volume-selling model is expected to be the standard version priced at 200,000 yuan... focusing on cost-effectiveness and a youthful and stylish exterior!

The overall approach is actually very similar to that of the Vcool Electronics Little Blue MAX series models...

While Xu Shenxue was looking at new cars in the Vcool e-magazine, other high-tech companies in China were also getting into car manufacturing!

Beijing's rice industry also started its car manufacturing strategy early on, and they're really going to build cars, not just talk about it...

Besides rice, several other companies have also launched car manufacturing strategies.

Even those in real estate and the internet industry are getting into car manufacturing, either by directly entering the market or by forming joint ventures with traditional automakers—there's all sorts of options.

Moreover, the number is extremely large... Some statistics suggest that there are at least several hundred car companies in China that want to produce electric vehicles, some of which have as many as a hundred financial strengths... Of course, not many can actually produce cars in mass production, and even fewer can sell cars and achieve annual sales of over 10,000 units.

Despite the influx of various companies into the electric vehicle industry, the ones with decent sales figures are still some familiar names.

Needless to say, Hailan Auto, along with BYD, Chery, Geely, GAC, BAIC, SAIC-GM, and others, are all frequent visitors to the sales charts.

As for emerging electric vehicle manufacturers, there aren't many with decent sales figures; it's mostly just a few familiar names like XPeng and Li Auto.

As for other so-called car manufacturers, they're basically still stuck in the PowerPoint presentation stage...

As for how things will turn out in the future, that depends on future market changes.

However, one thing is certain: of the hundreds of so-called electric vehicle brands on the market, more than 90% will eventually go bankrupt, and at most only a dozen or so will become mainstream brands with decent sales.

And only about three or four of them can become top-tier brands!

The rest must die!
Because the automotive industry is also an industry with a significant head effect... The more cars sold, the bigger the brand, and then the larger the production and sales volume, the lower the cost, which in turn allows for continuous price reductions, competition on cost-effectiveness, and further squeezing the survival space of other manufacturers... This process is also accompanied by the continuous accumulation of technology and the continuous establishment of more patent walls.

This ultimately leads to a situation where the strong get stronger and the weak get weaker.

Such fierce market competition poses a tremendous challenge to Vcool Electronics Group's car manufacturing business!

(End of this chapter)