Rebirth 08: Rise from copycat phones

Chapter 619 The Father of the Global Automotive Industry

Time passed quickly, and May arrived. The launch event for Hailan Auto was held as scheduled.

At this year's Hailan Auto launch event, Hailan Auto upgraded some of its existing models, but the overall changes were not significant... The main change is that the Hailan SLMC series and Hailan MEV series will now use solid-state batteries.

Meanwhile, the Hailan YEV and Hailan HEV, two entry-level models, have adopted solid-state batteries in their high-end models in the 300,000 RMB price range, in addition to the flagship models in the 400,000 RMB price range.

The standard model, priced around 250,000, still uses semi-solid-state batteries... Unfortunately, the current production capacity of solid-state batteries is still insufficient, making it impossible for the entry-level, high-volume models of these two series to adopt solid-state batteries on a large scale.

The entire range of vehicles under the Aqua brand will use solid-state batteries, which is expected to be implemented next year.

The Poseidon solid-state battery system developed by Poseidon Battery, a subsidiary of Poseidon Automotive Group, uses brand-new positive and negative electrode materials and a variety of new manufacturing processes, resulting in significant differences in its large-scale mass production compared to traditional lithium battery production.

The large-scale production of novel anode materials is quite complicated, making it difficult to ramp up production capacity.

Multiple technical challenges have made it difficult for Hailan Automotive Group to ramp up production capacity, despite investing significant resources in the mass production of solid-state batteries.

The construction of large-scale production bases takes time, as does the design and manufacture of a large number of new production equipment, the testing of new processes, and the training of engineers and workers.

Everything takes time!
Currently, Hailan Auto's automotive power battery production capacity is 250 GWh. Simply assuming an average battery usage of 100 kWh per vehicle, this can meet the needs of 2.5 million Hailan electric vehicles.

Of course, this average of 100 kWh is just a simplified and crude statement. In reality, the usage of solid-state batteries in Hailan Auto's electric vehicles varies considerably.

Those top-of-the-line models with a range of 1,300 to 1,400 kilometers are equipped with solid-state batteries with a capacity of over 200 kilowatt-hours.

The high-end solid-state version of the Hailan YEV has a range of only 630 kilometers, and its solid-state battery capacity is only 70 kilowatt-hours.

It is worth noting that the electric vehicles under Hailan Auto have larger battery capacities than those of other brands.

For example, even though they are both sedan models with the same 600-kilometer range, other brands' battery capacities are only 50-60 kilowatt-hours, while Hailan cars generally have 70 kilowatt-hours or even more.

This is because the driver assistance system and intelligent vehicle system of Hailan cars contain a large number of chips, sensors and other devices that consume a lot of power.

Furthermore, Hailan Auto prioritizes comfort and other features!

All of Hailan Auto's intelligent technologies and even its improved comfort are built on greater power consumption.

Therefore, Hailan Auto's cars have always had larger battery capacities than other brands' models.

If we consider both high-end and low-end models together and then calculate the average data, the current solid-state battery models of Hailan Auto are equipped with an average of about 100 kWh of battery per vehicle... Hailan Battery's current production capacity of 250 gigawatt-hours can meet the production needs of about 2.5 million vehicles.

But this is far from enough.

According to Hailan Auto's plan, five large-scale solid-state battery manufacturing bases will be completed and put into production in the coming year.

By next summer, their solid-state battery production capacity will increase to 400 gigawatt-hours per year, enough to meet the solid-state battery needs of at least four million vehicles under the Hailan brand...

In actual use, it can meet the needs of more vehicles, because in addition to pure electric models, the Hailan brand also sells range-extended models, which account for a certain percentage of sales. And the range-extended models use even less solid-state battery.

Meanwhile, three more solid-state battery production bases are expected to be completed and put into operation in the second half of next year, which are expected to provide at least 80 gigawatt-hours of capacity...

Adding them all up, that's 480 gigawatt-hours of solid-state battery production capacity, enough to meet the production needs of the entire Hailan brand, and even have some surplus capacity to supply the Mite and Ella brands. At the same time, we've also started supplying external customers on a small scale.

Currently, Hailan Automotive Group has been negotiating with several domestic and foreign automotive groups. What are they negotiating?
The discussion naturally turns to the supply of solid-state batteries...

However, such a large-scale strategic procurement plan cannot be negotiated in a short period of time, especially negotiations with major overseas automotive giants, which often involve a series of other exchanges of interests.

Hailan Auto's solid-state batteries will be exported, that's a certainty. However, given the limited initial production capacity, deciding who to sell the solid-state batteries to first is a delicate matter...

Of course, none of the above will affect the continued strong sales of Hailan cars this year!
Hailan Auto's traditional advantage lies in its unparalleled autonomous driving technology, which has no real competitors.

Now, the significant advantages of solid-state batteries have allowed Hailan Auto to further solidify its technological and market advantages.

Leveraging these two core advantages, coupled with Hailan Auto's consistent penchant for incorporating so-called futuristic elements, comfort, and riding experience, it has always pursued a high-end approach.

As a result, Aveo continued to dominate the high-end passenger car market in many regions around the world, becoming the world's best-selling luxury car brand, surpassing traditional luxury car brands such as BMW, Mercedes-Benz, Audi, Cadillac, Volvo, and Lincoln in terms of sales.

This year is no exception!

This year's product launch seemed rather conventional, but sales have been incredibly strong! ...Especially the high-end version of the Ocean Blue YEV, which uses solid-state batteries.

For just 300,000 yuan, you can drive home a Blue YEV equipped with a solid-state battery and L3-level assisted driving!

The entry-level price of solid-state battery vehicles has dropped from 400,000 yuan last year to 300,000 yuan this year, which has undoubtedly attracted more people to purchase them.

This can be seen from the pre-sale data on the evening after the press conference... and what's particularly interesting is that...

When Bao Yongyan reported the pre-sale data to Xu Shenxue, he mentioned that in the pre-order data of the Hailan YEV series, the 300,000 solid-state battery version was more popular and had higher sales than the 250,000 semi-solid-state battery version.

You can't blame consumers for making this choice. Since they've already decided to buy a Hailan car, instead of spending 250,000 yuan on a base model Hailan YEV with a semi-solid battery, they might as well grit their teeth and spend an extra 50,000 yuan to buy the high-end Hailan YEV with a solid battery for 300,000 yuan.

This resulted in extremely high pre-sale sales for the high-end version of the Hailan YEV... even far exceeding Hailan Auto's production capacity.

Because we didn't prepare that many solid-state batteries for this model.

In the future, this Hailan solid-state battery model, priced at 300,000 yuan and touted by some as having the best cost-performance ratio, will face a series of issues, including production shortages. In particular, customers who place orders may experience delivery delays of several months after placing their orders. This problem will only be resolved once Hailan Auto's new solid-state battery manufacturing base gradually goes into production.

This situation is both pleasing and frustrating for the executives of Hailan Auto. They are pleased that the high-end version of the Hailan YEV is selling very well, but they are frustrated because... the production capacity of solid-state batteries is insufficient.

The current limited solid-state battery production capacity is intended to supply a limited number of luxury car series costing millions of yuan, as well as the Blue SLMC and Blue MEV series... These luxury car models have high unit prices and high gross profits.

The remaining solid-state batteries will be used in the mid-range models, Hailan YEV and Hailan HEV.

Based on current production capacity and sales trends, the solid-state battery versions of these two mid-range models this year will be in short supply.

After the annual press conference of Hailan Auto.

Xu Shenxue also participated in an online video conference with Ningdai Battery, where the management team of Ningdai Battery proposed a major adjustment to its future business direction.

For example, further reducing the manufacturing cost of lithium iron phosphate batteries and lowering the delivery price can be used to actively expand the mid-to-low-end electric vehicle market while actively developing the energy storage market.

The production capacity of traditional ternary lithium batteries will be completely eliminated, and their production lines will be transferred to semi-solid-state batteries.

The life cycle of traditional ternary lithium batteries is coming to an end. Their manufacturing cost is not much lower than that of semi-solid-state batteries, but their energy density is much lower, and they have a higher risk of spontaneous combustion and collision combustion.

After Ningdai Battery launched its semi-solid-state battery to the market two years ago, the production and sales volume of Ningdai Battery's traditional ternary lithium batteries have gradually declined, and now they have reached the end of their life cycle.

Going forward, Ningdai Battery will focus on the research and development and production of semi-solid-state batteries, with the core objective of reducing manufacturing costs while improving performance such as safety and energy density.

Although the era of solid-state batteries has arrived, Hailan Auto's solid-state battery production capacity is limited. Even if it sells to external customers in the future, it will be impossible for it to become widespread in the low-end market for many years.

There is still a huge market for semi-solid-state batteries in the future low-to-mid-range market... Of course, the initial step is to reduce costs.

Fortunately, the price of lithium metal, the core material of traditional lithium batteries, has continued to decline recently, and the raw material procurement costs for various lithium batteries, including semi-solid-state batteries, are also gradually decreasing. Therefore, there is still considerable room for cost reduction in Ningdai Battery's semi-solid-state batteries and lithium iron phosphate batteries.

The decline in lithium metal prices is actually closely related to Hailan Auto!

Back when Hailan Motors was developing electric vehicles, its huge sales volume drove up the price of lithium metal materials. This attracted the attention of many companies and even countries, who saw lithium metal as a strategic resource and wanted to profit from it.

Before they even started working on it, Hailan Auto went on to work on solid-state batteries. And Hailan Auto's hybrid oxide polymer solid-state battery doesn't use lithium metal. Instead, it uses a newly developed, exclusive, top-secret positive and negative electrode material... To this day, the outside world still doesn't understand what materials are used for the positive and negative electrodes of this solid-state battery.

Because Hailan Auto has never published any related papers or technical parameters... other manufacturers who have reverse-engineered these materials can only get a general idea, knowing it's a very complex composite material, but they still don't understand how it's manufactured. If they could figure out the positive and negative electrode materials of this solid-state battery, they wouldn't be far from developing their own hybrid oxide polymer solid-state battery...

The core technology of Poseidon solid-state batteries lies in these positive and negative electrode materials...

If you can't get the materials, everything else is in vain!

Hailan Automotive is now working on hybrid oxide polymer solid-state batteries that don't require lithium metal... What does this mean?
This means that the global demand for lithium metal has suddenly decreased by a large margin!

Hylan Autos ships millions of electric vehicles annually, making it the world's largest electric vehicle manufacturer, and its sales account for a very high percentage of its total sales.

Many analysts believe that global sales of new energy vehicles, including pure electric vehicles, plug-in hybrid vehicles, and range-extended vehicles, are expected to reach 18 million units this year, with Hailan Auto alone accounting for more than 4.5 million units.

The high total sales volume is largely due to Hailan Auto. For example, in the high-end passenger car market, many people choose to buy electric vehicles simply because of Hailan Auto. Without Hailan Auto's cutting-edge technology and top-notch products, they would not buy electric vehicles from other brands, but would continue to buy luxury gasoline cars.

Hailan Auto is not just an electric vehicle, but also a top-of-the-line product with cutting-edge technology... It's even more high-end than traditional gasoline-powered luxury cars.

Secondly, Hailan Auto develops high-performance lithium iron phosphate batteries and semi-solid-state batteries, which are subsequently transferred to the market through technology transfer. At the same time, it sells high-performance lidar, automotive/industrial-grade cameras and other sensors and other components, and exchanges some key patents with other automakers.

They have provided the market with a large number of electric vehicle technologies and spare parts!
Whether it's Tesla, BYD, or other electric vehicle manufacturers, they all use Hailan Auto's technology or parts to varying degrees.

The existence of Hailan Auto has directly promoted the progress and maturity of electric vehicle technology, which has also greatly stimulated the maturity of the electric vehicle market.

The maturity of electric vehicles is what has driven the rapid growth of the electric vehicle market!
Despite its enormous influence, Hailan Auto has begun to switch to using hybrid oxide polymer solid-state batteries that do not require lithium metal. Although it has not completely abandoned lithium batteries and continues to use them in its low-end models, the trend is unstoppable.

This is undoubtedly a devastating blow to the lithium metal industry... It means a sudden decrease in the demand for lithium metal for millions of electric vehicles.

More importantly, Hailan Auto's electric vehicles are mainly pure electric, and although they have range-extended models, their sales account for a very small percentage.

While the global production and sales volume of new energy vehicles appears to be around 17 to 18 million, a significant portion of these are actually plug-in hybrid or range-extended electric vehicles. Among the pure electric vehicles, the majority are actually low-priced models with small batteries, and a large proportion of these are low-priced electric vehicles with a range of 300 to 400 kilometers.

As for Hailan Auto, the vast majority of its models are pure electric vehicles with a range of over 600 kilometers!

This has resulted in Hailan Auto consuming more than half of the world's power battery consumption.

However, more than half of the power lithium battery consumption has simply disappeared... Hailan Auto has switched to solid-state batteries.

As a result, lithium metal prices have continued to decline over the past two years, and have fallen even further this year, leading to an awkward situation of oversupply in the lithium metal market.

As a result, many of Xu Shenxue's mining companies also faced operational difficulties, with one of them even incurring losses.

Xu Shenxue's numerous mining companies collectively account for over 70% of the world's lithium metal production capacity. With lithium metal prices continuing to fall and supply exceeding demand, they have begun to gradually close some inefficient and outdated lithium mines.

However, Mr. Xu's family is large and powerful, and he doesn't care about the reduced profits or even losses in his lithium metal business.

The reason for taking control of the lithium metal industry back then was to ensure the rapid development of the electric vehicle industry.

Giving up the lithium metal industry now is also to allow the electric vehicle industry to take another step forward!
Strictly speaking, the lithium metal business of these mining companies under his control has already completed its historical mission, and they can simply continue to operate according to market conditions.

The continued decline in lithium metal prices has provided traditional lithium battery manufacturers such as Ningdai Battery with ongoing room to reduce costs.

Traditional lithium batteries, whether lithium iron phosphate batteries or semi-solid-state batteries, will not lack a market as long as the price is low enough.

This is also Ningdai Battery's strategy for the next few years: to eliminate outdated ternary lithium battery production capacity, reduce the cost of lithium iron phosphate batteries and semi-solid-state lithium batteries as much as possible, cultivate the low-end electric vehicle market, and at the same time open up the energy storage market.

This is actually the main approach taken by many traditional lithium battery manufacturers!

Everyone knows that Hailan Auto's solid-state batteries are good, but not everyone can afford them.

Therefore, lithium batteries still have considerable room for survival in the low-to-mid-end market, and this will likely continue for at least the next ten to eight years.

As for ten years from now... if we still can't find a direction for transformation or haven't broken through the solid-state battery technology route by then, then we're just waiting to die!

As time goes by, the manufacturing cost and selling price of Hailan Auto's solid-state batteries will inevitably decrease as the technology matures and production continues to expand.

The solid-state batteries used by Hailan Automotive are gradually replacing traditional lithium batteries, which is a major historical trend.

Of course, Ningdai Battery is a special case, as it is Xu Shenxue's company and Hailan Automotive Group also holds a large number of shares in Ningdai Battery.

In the future, they may obtain solid-state battery technology licenses from Hailan Battery and become solid-state battery manufacturers... Of course, they will still have to pay high technology licensing fees.

However, the prospects for other traditional lithium battery manufacturers are not so rosy. In the past two years, the stock prices of major listed lithium battery manufacturers have continued to decline... Even though their lithium battery shipments are rising steadily, and their revenue and profits are increasing, their stock prices have been falling... because they have no future.

Market capitalization reflects the future; it's a company whose future is predictable, or even nonexistent. Even if a company is still making money, its stock price can still plummet.

In the next few years, these traditional lithium battery manufacturers will be able to survive, and some may even thrive, having time for strategic adjustments or technological breakthroughs.

But they don't have much time left!

While traditional lithium battery manufacturers have entered a period of decline, companies in the solid-state battery industry have experienced a period of explosive growth.

Affected by Hailan Battery's large-scale expansion of solid-state battery production capacity, hundreds of Hailan Battery's major supply chain manufacturers are all celebrating their success, expanding wildly, and hiring in large numbers!

After all, the power battery market has not decreased; on the contrary, it continues to grow rapidly... It's just that power batteries are gradually being replaced by solid-state batteries instead of traditional lithium batteries.

For the entire electric vehicle industry, the large-scale application of solid-state batteries, especially the commitment by Hailan Automotive Group to gradually supply solid-state batteries to other manufacturers starting next year, will greatly promote the overall development of the electric vehicle industry!

This is also what Xu Shenxue hopes to see... He wants more than just Hailan Auto to dominate the market; he hopes to see the overall development of the electric vehicle industry.

With global annual car production and sales reaching 70 to 80 million vehicles, Hailan Auto alone couldn't possibly handle that much; at most, it could only achieve sales of around 10 million vehicles.

So, should we just leave the rest of the market share unattended?
impossible!

Hailan Automotive is attempting to penetrate the market of 60 to 70 million vehicles by providing power batteries, lidar and other components, technology licensing or other means, while Zhiyun Group is doing so by providing automotive-grade computing chips and driver assistance systems.

This approach of penetrating through subsystems and components also has a prerequisite: other automakers, especially traditional large overseas automakers, need to see the benefits of manufacturing and selling electric vehicles—benefits sufficient to make them abandon their traditional advantage in gasoline vehicles and switch to electric vehicles.

Solid-state batteries offer this advantage!

Xu Shenxue's global automotive market strategy, to put it more grandly, involves establishing a presence across the entire industry chain, focusing on the mid-to-upstream sectors.

To put it more simply and bluntly: Xu Shenxue is trying to become the "father" of the global automobile manufacturing industry...

Solid-state battery supply is an open secret... I know you're worried about being cut off from supplies, but my solid-state batteries are so amazing, are you really not going to use them?
Even if you don't use it yourself due to various concerns, your competitors might... Don't blame me if you lose market share then.

The supply of solid-state batteries is just like that of computing chips, but it's an open secret... On the surface, it's a matter of whether you buy it or not, nobody's forcing you.

But in reality, you can't afford not to buy it, because if you don't, your competitors will, and then you'll fall behind in the field of artificial intelligence.

With artificial intelligence becoming increasingly prevalent and gradually penetrating various industries, falling behind in the field of AI could have serious consequences.

So the current situation is that Zhiyun Group is selling top-tier computing cards like the APO6000 directly, and other high-tech companies, including those in the United States, are scrambling to buy them...

In the future, Xu Shenxue hopes to replicate his success in the computing card field in the field of solid-state batteries, and then gain a huge voice in the automotive industry.

He wants to be the father of the global automotive industry!

(End of this chapter)