What's wrong with me being a rich man?

Chapter 425 Responsibilities
The joint policy from four departments offers generous subsidies.

However, in addition to the cash subsidy of 3.5 yuan per vehicle, the subsidy also stipulates a future reduction. The subsidy standards for 2014 and 2015 will decrease by 10% and 20% respectively compared to this year, resulting in 3.15 yuan and 2.8 yuan.

In addition, local policies don't have a very long timeframe, so seizing the opportunity and seeking more support is undoubtedly the best course of action.

Zhu Zehui came here to communicate because he saw that the prototype vehicle of the Silicon Carbon Group was already being tested, so he hoped to achieve results as soon as possible.

He was somewhat disappointed by Yu Xing's rejection, but he also fully understood this attitude.

However, when Yu Xing brought the matter to the group's meeting table for discussion, many people seemed somewhat hesitant.

Shanghai's subsidy policy was implemented this year, with different districts even having different supplements, but the "guiding" support undoubtedly makes people think a lot.

Or, why don't we try to push for mass production next year?

Yu Xing firmly opposed this view.

“Shanghai will indeed be our key market in the early stages, but we also need to sell our cars in other markets. Once we leave Shanghai, we won’t get these subsidies. When consumers in other cities are faced with a new product, product strength is still the most important factor.”

"Don't do things that are more trouble than they're worth. Whether it's cash, license plates, or charging discounts, we should treat them as icing on the cake. We need to make the 'cake' first."

Once the boss takes a firm stance, other voices fall silent.

However, it's not surprising that such thoughts arise. A subsidy of 50,000 to 60,000 yuan for a car represents two different levels, and the conditions are not high. This seems to be related to the market response of the first car.

After the meeting, Hu Zhengnan reported the progress of his work to his boss and also mentioned subsidies and support: "A pure electric range of 50 kilometers is not difficult at all. The difficulty is how to sell the car."

Yu Xing laughed and said, "I have a plan. I'll transfer the car from one hand to the other, and then I can get the subsidy."

Hu Zhengnan let out an "uh," knowing that his boss was joking, but there was indeed a possibility that this situation might occur.

Yu Xing then said, "Let's leave the subsidy to fate. Shanghai will determine the reduction ratio every year based on the situation. However, Director Zhu also mentioned a standard issue that is very relevant to us: how to define the standard for range-extended vehicles."

There is no clear definition of extended-range vehicles in China. They are currently classified under the broad category of plug-in hybrids. Whether they will be further subdivided in the future is unclear, but it seems that Shanghai is considering further classification.

Meanwhile, with the development of power batteries, 50 kilometers will become an easily overcome threshold, which will create a need for setting standards.

The overall policy will definitely have to wait for the higher authorities to formulate it, but Shanghai can first implement regional pilot measures. Such pioneering regulations may actually have the potential to influence the final policy formulation.

Director Zhu did not make this matter too explicit during the communication.

But... his trip here is a statement of his attitude.

First of all, the cars produced by the Silicon Carbon Group must be compliant with regulations. Otherwise, if a car is launched just as a new policy is introduced, and it fails to meet the standards, the entire project will be abandoned halfway through.

Secondly, if the policy can be tailored to the performance of silicon carbon groups, it would also be a form of targeted support.

Range-extended vehicles use both electricity and gasoline, so what is the required pure electric range? And what is the upper limit for the proportion of fuel in the fuel tank?
Once this kind of thing comes out, it is very likely to affect the products of subsequent companies.

Hu Zhengnan pondered for a moment, his thoughts racing: "If they set a standard of 200 kilometers of pure electric range to match our goals, wouldn't that indirectly raise the entry barrier?"

Silicon Carbon Group's current goal for battery performance is to provide such pure electric range.

Yu Xing chuckled: "How could it be that high? The standard is definitely going to be lower. If it were really broken down, it would probably be higher than 50 kilometers. However, we really need to study the fuel tank ratio carefully. This might be the industry standard. Let's see what the appropriate ratio is for our fuel tank size."

Hu Zhengnan nodded, giving advance notice would at least prevent them from being caught off guard.

As he walked and talked, he asked again, "Didn't Director Zhu mention anything else? Didn't he say anything about giving us a loan?"

“He knew we had just received funding, but he didn’t mention anything else. Oh, he just asked me about my choice between ternary lithium and lithium iron phosphate batteries.” Yu Xing paused for a moment, then added, “I don’t know if it was just a coincidence, but it was quite a coincidence.”

Hu Zhengnan asked earnestly, "President Yu, what do you say?"

“He asked me why I wanted to use lithium iron phosphate batteries,” Yu Xing said. “I said that lithium iron phosphate uses very common raw materials, unlike ternary lithium batteries which have the risk of being cut off from supply chains. Director Zhu was quite surprised by this answer, and then he didn’t ask any more questions.”

Hu Zhengnan was somewhat taken aback; he was quite surprised by this answer as well. Why wasn't the topic of their previous discussions with CATL being discussed now…

Seeing Hu Zhengnan's expression, Yu Xing laughed and said, "You should talk to different people. I didn't say anything definitive. Anyway, our Silicon Carbon Group has considered and practiced various aspects of entering the new energy industry."

Hu Zhengnan felt that his boss had thought things through more deeply than he had imagined, and cautiously said, "Director Zhu this time..."

He paused, then didn't finish his sentence.

"Whether it will affect his grades or not, well, there's no way to say for sure. Anyway, we're going by the facts, no matter who asks. We have to be firm and resolute, leaving no room for wavering," Yu Xing stated clearly.

Hu Zhengnan's doubts were all answered. Well, the truth is the best way to shut up any doubts.

"However, our progress is indeed a bit slower than expected." Yu Xing said about the current progress. "The prototype vehicle cannot be finalized yet, so we can only test it first. The construction of the process workshop has also not kept up with the schedule."

Hu Zhengnan had to say, "President Yu, this is really due to the drag from the supply chain."

Since the middle of the year, the prototype vehicle has been undergoing bench testing and closed-field testing. Just as LK Group cannot give a definite completion date for the die-casting machine, the equipment introduction in this workshop cannot be finalized. Similarly, CATL's battery R&D progress is also uncertain.

If all of these are in order, the stamping, welding, painting, and final assembly processes should all be completed in the workshops. Then comes the prototype testing and production line debugging.

“That’s not a burden,” Yu Xing said, changing his wording. “That’s called growing together. Without the opportunity to grow together, can we expect our suppliers to meet our requirements as much as possible? There are gains and losses.”

Hu Zhengnan understood this principle, but he also needed to point out the division of responsibilities in a timely manner.

Yu Xing smiled at Hu Zhengnan and stopped talking about it.

He was still pondering the possible policies and measures the city might take, but his attention was drawn to the problems encountered by the fourth prototype vehicle within two days.

At 10 p.m. on October 23, the fourth prototype vehicle malfunctioned during road testing, and the air suspension broke down when subjected to bumps.

The prototype vehicle uses air suspension from German company Wibac, which is also the world's largest air suspension supplier.

Yu Xing didn't pay much attention to this at first, only knowing that there was a problem with the suspension. But two days later, when he passed by the workshop, he found that car number four was still parked and hadn't moved, which puzzled him greatly.

"Any other problems with vehicle number four? Is the test over?"

Secretary Zhang Yangxu quickly replied, "The new vacant space hasn't arrived yet. We can only replace it after the new space arrives, which will probably be next month." Yu Xing frowned, "Why so long?"

“Weebak’s production line is in Mexico. We have to ship the materials from Germany to Mexico first, then back to Germany, and finally to us,” Zhang Yangxu said. “When we called, they said they would try their best to coordinate, and it might arrive in the first week of next month.”

Yu Xing glanced at the fourth prototype vehicle and said nothing more.

As a result, two days later, the air suspension of car number five also malfunctioned.

These prototype vehicles all use products from German company Wibac. Although Kong Hui has made breakthroughs in air suspension, it will still take some time before mass production and use. Therefore, air suspension is currently supplied by foreign companies.

Yu Xing couldn't hold back any longer and called a small meeting to find out exactly what the problem was.

The prototype vehicle has been undergoing testing since it rolled off the production line, so it's hard not to be sensitive to problems that arise at similar times.

"Mr. Yu, the air springs in both cars burst, puncturing the rubber bladder." Jiang Ziming, who was in charge of investigating the problem, gave a clear answer. "They both burst when going over bumps, probably because they couldn't withstand the impact. We disassembled all the parts, and the direct cause was a broken plastic ring."

The prototype currently weighs 2.3 tons, while similar products like the Highlander and Volvo weigh 2.1 tons or less.

Perhaps it is this weight difference that caused the Wibac air suspension to have similar problems during testing.

"What did their engineers say?" Yu Xing asked. "Since it's a problem with the plastic ring, can't we just change the plastic ring?"

Jiang Ziming said with difficulty, "Weebak's engineers haven't arrived yet. We talked on the phone, and they think it doesn't need to be changed."

Yu Xing frowned: "The problem that occurred last week, haven't you sent an engineer over this week yet?"

Hu Zhengnan, who was present at the meeting, said: "President Yu, they contacted us immediately, but Weibak was slow to act. We now know that the air suspensions of these two cars are from the same batch of products. We may need to test the weight, impact force, and spring issues again."

Yu Xing's face showed obvious displeasure.

He then asked, "Are these two from the same batch? What about our other cars? Are they from the same batch too? Is it a coincidence or inevitable?"

Hu Zhengnan could not answer this question.

Jiang Ziming thought for a moment: "Other cars are still being tested, but we can take them apart and take a look. Or, we can do more impact tests of this intensity. Air suspension is a part that is prone to problems. It's good that the problem has been exposed in advance."

Yu Xing thought about it again and realized that this was indeed a good thing. If it had reached the users, there would have been bound to be trouble.

He requested: "Continue testing, and compare the results of the tests to identify the problematic operating conditions."

As soon as the order was given, the comparison test began immediately.

However, no further problems arose with this test.

When the second meeting began, Jiang Ziming brought up the key issue: "President Yu, we have disassembled the air suspension of all the cars. They are from three batches. The first batch that had problems seems to have different parts suppliers. The broken plastic rings are black, while the plastic rings that are still intact are white. The strength of their materials is different."

The test vehicle had a problem → the air suspension had a problem → the air suspension components had a problem.

Yu Xing turned to Hu Zhengnan and asked, "Have the German engineers arrived yet?"

"They've arrived. They've already studied the situation and will send over a new batch of air suspension for us to test." Hu Zhengnan hesitated for two seconds. "But they don't think it's a big problem. They have two different suppliers for the plastic rings, and it's possible that one of them had a quality issue. They think normal plastic rings wouldn't behave like this."

Yu Xing pondered this problem.

Hu Zhengnan continued, "Weibac also supplies air suspension to luxury cars like BMW. I asked around over the weekend, and BMW uses this type of air suspension, but... they supply aluminum rings to Porsche."

Yu Xing asked in surprise, "It's designed with aluminum rings from the start? What? Even BMW can't afford aluminum rings? If such a design exists, why aren't we allowed to use it?"

“They think it’s sufficient.” Hu Zhengnan emphasized the position of the Weibak engineers again, and then spoke the truth, “They didn’t give us any options, and we don’t know what BMW was thinking.”

Jiang Ziming then said, "Our car needs to be heavier, which will not only affect the air suspension, but Wibac doesn't think this design is enough for us. The problem this time is that they want to pass it on to their suppliers."

He actually had something else he didn't say, but when the German engineer came over and saw it, his first reaction was, "Just make the car lighter."

Foreign suppliers are generally arrogant, but this one is truly arrogant.

Yu Xing laughed and said, "It's good that they didn't try to shift the blame onto us."

Jiang Ziming and Hu Zhengnan exchanged a glance but remained silent.

“Continue testing, then ask if they'll sell the aluminum. Webac's supply chain is overseas, and the supply cycle is long. If even a plastic ring can cause a problem, how will we handle things if the air suspension malfunctions later?” Yu Xing said, still frowning. “How's the air suspension on President Guo's end?”

Hu Zhengnan said, "I've already asked him, and he's still optimizing the vulcanization process."

Yu Xing thought about it carefully for a while and said, "To be honest, I feel more at ease if President Guo can see it and we can sit down and talk about it in detail. Otherwise, if there are problems here and things can't be resolved there, that's not right."

Hu Zhengnan did not comment.

Jiang Ziming said, "Weibak is a well-known supplier, but I'm afraid Mr. Guo's company isn't mature enough."

“We can’t guarantee the suspension of Wibac, but we can negotiate a warranty for the kind of suspension that Mr. Guo has. As long as it passes the tests, it’s not as good as just adding a big brand name.” Yu Xing sighed and asked, “Where are the German engineers? Let me ask them.”

The German engineers were in the workshop.

Yu Xing soon spotted this group of people.

He consulted their research opinions through a translator and received an answer that surprised him.

“Mr. Yu, we understand your testing procedures. I believe that as long as normal road driving is conducted, there will be no problems at all,” Engineer Smith said seriously. “Your impact test is a new requirement and is not included in our considerations.”

After hearing the translation, Yu Xing found it absurd. He looked at Hu Zhengnan on the left and Jiang Ziming on the right, and then laughed: "So, we just went over a pit, climbed a step, and then it exploded in mid-air, and now it's our fault?"

He asked the translator to translate his questions truthfully, and then saw Smith deliver a series of rather agitated remarks.

Yu Xing lost interest in continuing the communication and could only sigh that suppliers like Wibac had indeed had too many good days.

(End of this chapter)