What's wrong with me being a rich man?

Chapter 422, Section 181: Negotiation
Dou Xinghuai returned to the company from Lingang in a sullen mood.

As a senior vice president, he was in charge of the cooperation with the silicon carbon group, and he paid close attention to the visit from BYD.

BYD started as a battery manufacturer, and although it is now more often regarded as a car company, it is still a potential competitor, after all, it holds the largest share of the domestic power battery market.

However, BYD produces and sells its batteries directly to the public and does not sell them to external parties.

However, the fact that it is not for sale now does not mean it will not be for sale in the future.

Moreover, Dou Xinghuai had already inquired in Hong Kong and found out that BYD's cooperation with the Silicon Carbon Group was about cross-licensing of patents related to battery safety, which seemed more like the beginning of deeper cooperation in the future.

Sure enough, when he returned to the company and reported the situation, the attendees all frowned.

"Mr. Yu probably won't buy BYD's batteries, right?" another vice president, Qiao Zhihong, said thoughtfully. "Mr. Yu is making mid-to-high-end cars, and BYD is different from him. Plus, lithium iron phosphate has a lower energy density than ternary lithium, which could easily damage the brand's positioning, right?"

"BYD can achieve 160Wh/kg per cell? That's quite impressive." This was the key point that Yuan Jingren, the deputy director of R&D, was paying attention to.

"This is data from the lab. There's still a long way to go from the lab to mass production," Dou Xinghuai provided relatively accurate information, "but it'll probably be within the next two years."

At the same time, he added, "It seems that President Yu and President Wang have a good relationship. They had communicated a long time ago. This time, President Wang came in person to discuss the cooperation. His considerations are not without reason. The range of the extended-range vehicle is already guaranteed by the range extender."

The purpose of Silicon Carbon Group's range-extended vehicles is to solve range anxiety. From this perspective, as long as lithium iron phosphate batteries can meet Silicon Carbon Group's performance requirements, they can be used just as well. There is no need to look to Tesla for the same standard.

However... CATL's current idea is to seek development of ternary lithium batteries to occupy the industry market.

First, the collaboration between Tesla and Panasonic was very successful; second, the energy density advantage is obvious; and third, it allows for the concentration of R&D resources.

BMW has already decided to use ternary lithium batteries. While the silicon carbon group can use lithium iron phosphate batteries for its range-extended vehicle route, it is currently the only company working on range-extended vehicles. How many years can this transitional technology last?
According to CATL's internal assessment, if the first model of the Silicon Carbon Group can achieve initial success, it will definitely switch to pure electric products later.

Therefore, from a cost-performance perspective, focusing on ternary lithium batteries and betting on the future boom in the passenger vehicle market is the best approach.

Qiao Zhihong glanced at Chairman Zeng Yuqun, who hadn't spoken, and reminded him, "BMW is also in talks with Tianjin Lishen about cooperation. They might also be able to enter BMW's supply chain. Their research and development of ternary lithium batteries shouldn't be underestimated."

Not only should they not be underestimated, but in the current domestic power battery market, BYD ranks first, Tianjin Lishen second, and Guoxuan High-Tech third.

CATL's growth rate this year is quite good, and its goal for next year is to enter the top three in China. At present, it seems that Tianjin Lishen may not be able to catch up, even with the cooperation of state-owned enterprises. It is precisely because of this cooperation that it has many opportunities to verify its technology.

After a while of discussion in the meeting room, people gradually turned their attention to Zeng Yuqun, who was deep in thought.

"BMW is a customer, and silicon carbon is also a customer," Zeng Yuqun said slowly. "You might think that silicon carbon shouldn't have any bargaining power, but do we?"

He used the term "bargaining power" to refer to the current situation.

Silicon Carbon Group has just entered the automotive industry. In theory, it should use whatever technology the supply chain provides. However, CATL has also been established for a short time. While it has entered BMW's supply chain, its main benefits are in building reputation and technology.

BMW's subsidiary brand "Zinoro" uses CATL's batteries, but it seems unlikely to sell many. While there's a chance to gradually secure a place in BMW's mainstream models, it's better to bet on the domestic new energy vehicle market's explosive growth. BMW's volume is small, and Tesla, which has been more successful in the new energy vehicle market, hasn't entered the Chinese market and is unlikely to use CATL's batteries. Even Panasonic of Japan has built factories in the US.

If you want to bet on the explosive growth of new energy in China and gain a larger share of the battery industry, you still need to rely on building a reputation for your end products.

CATL has more than just Silicon Carbon Group as a customer in China. It also collaborates with automakers such as BAIC New Energy and Changan, which account for about 30% of its business. CATL is also in talks with commercial vehicle manufacturers such as Yutong and King Long, and is expected to advance its business in this area next year.

However, based on current contact and investigation, the investment of companies like BAIC and Changan is not as large as that of the Silicon Carbon Group.

Zeng Yuqun felt that if they wanted to build a reputation and promote the expansion of the new energy vehicle market through automakers like BAIC and Changan, it might be...

He made a decision: "If President Yu wants lithium iron phosphate, then we will do our best to give him lithium iron phosphate."

Qiao Zhihong frowned and said, "Our plans for lithium iron phosphate are... not quite aligned."

CATL's main revenue currently comes from lithium iron phosphate batteries, but its future plans are geared towards commercial vehicles. These vehicles are larger and can use larger batteries to address the low density of lithium iron phosphate cells.

“We follow the customer’s lead when they place an order,” Zeng Yuqun said. “Didn’t President Yu set up a joint venture with L.K.? They also invest in battery R&D. This is a path we can’t rule out.”

The people in the conference room looked at each other in bewilderment.

“If the new energy market doesn’t develop, all the plans are useless. Don’t be fooled by BAIC and others following the policies; they’re just going through the motions. Only companies like Silicon Carbon Group and BYD are pushing forward with all their might.” Zeng Yuqun shook his head and said, “Do you think those car companies can so easily do well in the market just by following the policies and getting subsidies? I don’t believe it.”

He laughed and said, "President Yu said he believes in CATL's R&D, so what else is there to say? Let's just do R&D. If we run out of money, we'll raise funds. We can also see what kind of products we can develop. The domestic market is so big, and the range-extended vehicle route may be able to sustain the transition for a longer period of time."

Qiao Zhihong thought for a moment and said, "We can also form a joint venture with Silicon Carbon Group. They just raised a large sum of money in their Series B funding round this year. President Yu is quite generous when it comes to R&D."

Upon hearing this, Dou Xinghuai's heart skipped a beat. Lingang Era, it must be.

Zeng Yuqun nodded slightly: "We can learn from it, we can consider it. Even if we can't figure it out, we can share the risk. There's no reason why President Yu is willing to give Lijin money but not us money."

As he said this, he looked at Dou Xinghuai, who had gone to Lingang, and asked, "Mr. Dou, do you think Mr. Yu has this idea?"

Dou Xinghuai coughed softly: "Perhaps."

Qiao Zhihong asked, puzzled: "Perhaps there is? Or is there no?"

Dou Xinghuai pondered for two seconds, then shook his head and said, "I don't know. Sometimes he talks like he's joking. I can't figure it out, I can't figure it out."

I don't understand, I don't understand. I need to think about it myself and then go to Lingang to figure things out.

(End of this chapter)