From knock-off old-man's electric vehicles to industrial giant

Chapter 233 Making Rules
An Jinhui recalled receiving a phone call from his superior the day before yesterday. In addition to discussing the plan to cooperate with Volkswagen to develop the first pure electric vehicle, the two sides also vaguely revealed the next trend of China's new energy industry.

After the end of the year, subsidies for new energy vehicles will be further reduced.

The new energy vehicle subsidy phase-out mechanism began in 15. Based on the electric vehicle's range, the maximum subsidy was 2.2 to 5 yuan per vehicle. Starting in 16, the subsidy amount decreased by 10% compared to the following year. In 17, it decreased by another 10% compared to the previous year, and the subsidy quota for electric passenger vehicles with a range of less than 100km was also eliminated.

The notice regarding the adjustment and improvement of the fiscal subsidy policy for new energy vehicles in 18 has not yet been released, but it is expected that the reduction in subsidies will be further increased, which is a confirmed indication.

When subsidies were relatively well-established, the market was chaotic and full of both good and bad players.

Now that subsidies have been withdrawn, it's time to sift through the sand and find the gold.

Who is the sand? Who is the gold?
An Jinhui had something to say about this: Jiang Huai had always wanted to be a fish.

The profitable path of shifting from commercial to passenger vehicles has been hampered, and the new energy route, which was initially half-subsidized and half-experimented, has gradually evolved into an inevitable path.

The rules of the game are changing. The reduction of subsidies and the full implementation of the carbon credit system have forced automakers that relied on new energy vehicle subsidies to adopt a two-pronged approach.

For existing companies, the restructuring of the industrial center of gravity is painful, but it also brings new opportunities... The rapid rise of Xingchen Automotive, the sales growth of BYD in recent years, and Wuling and other car companies... have all achieved remarkable results under the new rules.

In particular, the emergence of the Starry Sky L7 demonstrates a completely new and convincing technological approach.

“Our company, Xingchen, is a technology-focused company. As you’ve probably noticed, Mr. An, the rules of the game in the new energy vehicle market are different from those in the era dominated by gasoline vehicles,” Xu Yi said with a smile.

“Indeed, but I originally thought that StarCraft would stick to pure electric as the final route. I didn’t expect that StarCraft L7 would achieve such results with a range extender.” An Jinhui nodded and said. He realized the difference between the two routes and became interested in discussing it in depth.

"We need to look at this from a broader perspective. Our initial plan mainly focuses on two words—convenience. The development of small new energy vehicles can bring convenience to market demand and save ordinary people license plate fees and travel expenses. These preferential policies are provided by the government," Xu Yi said. "New energy vehicles also have macroeconomic benefits. They can help the power grid regulate peak loads and reduce oil imports. There is a huge gap between the cost of power generation and the cost of fuel."

"Whoever provides convenience will be chosen, and the same applies to the range-extended electric vehicle route. Essentially, we are seeking the most convenient option at present. There will also be a transition period from the fuel system to the pure electric era. This transition period may be a bit longer than expected. Fuel car companies can walk on two legs, and we, as new energy vehicle companies, are more flexible and therefore more suitable to walk on two legs: range-extended electric and pure electric." Xu Yi shared his views without reservation.

An Jinhui never expected that Xingchen Automotive would view future development trends in this way, and upon closer examination, it is quite philosophical.

Development requirements are changing.

Traditional companies are large and difficult to turn around, while emerging companies are light and have a much greater advantage in this regard. Xingchen Motors has made full use of this advantage.

"President An, I'm not entirely clear on the specifics of your collaboration with Volkswagen to manufacture new energy vehicles, or the extent of each party's involvement. However, one thing is certain: the convenience that Xingchen provides should be far greater than that of Volkswagen," Xu Yi formally mentioned the characteristics of the XI model.

“Traditional joint ventures focus on brand empowerment and the transfer of some mature technologies. Xingchen, on the other hand, focuses more on deep technology empowerment. We can provide the three-electric system that traditional car companies do not have, a smoother and more human-like vehicle system, and an advanced intelligent driver assistance system, connecting the entire production chain and ultimately achieving a comprehensive output of technology, manufacturing, and channels…”

Vice President Pan Ruilin, who had been listening attentively, couldn't help but ask, "President Xu, I know you have a lot of experience in new energy technology, but you're talking about technology + manufacturing + channels, doesn't that mean you have to be involved in everything from product definition and R&D to production?"

Frankly speaking, if the cooperation is truly in-depth, Xingchen Automotive already occupies a strong position by providing these technologies and core components.

In this way, Jianghuai's voice is probably even weaker than its cooperation model with Volkswagen.

Xu Yi looked at him with a half-smile and said, "Starry Sky's original intention was not to control production. If possible, our original intention was to only export technology... But as far as I know, in the past two years, several models of your company's Refine have had a lot of quality problems publicly disclosed on the car quality website. This is something worth noting."

He mentioned the problems that had occurred on the production side of Jianghuai in the past two years, and the two men's expressions immediately changed.

"Good technology and components are like ingredients, but if the cooking temperature is wrong or there are problems with the process, it is very likely that a mediocre product will be produced, and all the time and effort will be wasted."

The biggest fear with the OEM model is this: the product definition and R&D are fine, but the production process goes wrong.

"President Xu, the problem you mentioned does exist objectively, but compared to the previous two years, our production line has been improved a lot and streamlined considerably." An Jinhui sighed. There were human factors involved, as well as the lack of experience in manufacturing passenger vehicles for JAC.

"So whether the cooperation can succeed depends on whether you, President An, are determined." Xu Yi threw the question back at him with a smile.

The answer was affirmative.

“Of course, we are determined!” An Jinhui gritted his teeth.

Considering the continuous decline in sales of gasoline vehicles under the group from the year before last to this year, the squeeze from brands such as Geely and Great Wall has further reduced JAC's profit margin in passenger vehicles, and the core light truck business has been snatched away by Foton and Dongfeng.

If no change is sought, commercial vehicle growth is nearing its peak while passenger vehicle growth continues to suffer losses, leaving them stuck on both ends.

The internal pressure is immense.

They used to be a mainstream car brand, and if they don't step up their efforts, they'll really become a marginal player.

“In that case, we can talk about our ideas regarding the next train.” Xu Yi breathed a sigh of relief and smiled as both sides finally reached an agreement.

Xingchen Motors can certainly grow and expand rapidly on its own.

However, to further expand its scale, it is necessary to extend its technology and resources to the upstream and downstream industrial chains.

It's difficult to do that.

Nobody wants an opponent who is both the referee and the player.

But once a success story is established, there will be no shortage of collaborators.

after all.

How many domestic car companies are still relying on the influence and technology of joint venture brands to survive?

Being dominated by joint venture brands is acceptable, but being dominated by domestic brands is not?
joke.

As long as it makes money, independence and autonomy are things that can be given up.

"Mr. Xu, I would like to hear more details."

An Jinhui's expression turned slightly serious.

Regarding the new energy route, JAC doesn't actually have any ideas.

For example, JAC's collaboration with Volkswagen is to develop a new energy SUV.

It is still based on the JAC iEV7S platform.

To put it bluntly, it's a rebadged car. But Volkswagen did provide some technical support, such as motor control technology and core chassis tuning technology.

For joint venture brands, it's mainly about the logo and the chassis tuning.

Xu Yi smiled mysteriously: "President An, what do you think of our Starry Sky L7?"

An Jinhui was taken aback: "Great! This is definitely a good car!!"

He watched the entire launch event for the Xingchen L7. Its technology and features were undeniably impressive, and the range-extending engine it developed was so advanced that even established gasoline car manufacturers were amazed.

In its early days, JAC made its fortune by imitating Mitsubishi's technology, but its engine technology has remained stagnant at a mediocre level, lacking the courage and profit to invest heavily in research and development.

Xu Yi then asked, "Is there any interest in building a similar model in the Jianghuai region?"

As soon as these words came out.

"Huh?!" An Jinhui was greatly surprised. They were asked to build a car similar to the Starry Sky L7?
"Mr. Xu... I don't quite understand what you're saying. Us?"

He couldn't help but gasp.

This development is somewhat unbelievable.

"Mr. An, you browse the internet frequently, so you should know about Xiaomi and Redmi phones, right? Or you might know about Huawei and Honor, right?" Xu Yi prompted.

An Jinhui quickly realized what was happening.

Capture key information.

"Mr. Xu, do you mean you want us to build a Redmi car... oops, I mean, a Little Star L7?" His eyes lit up, a flash of inspiration striking his mind, "We're not going down the pure electric route?"

This...this is great!

"That's right, there is market demand for range-extended vehicles, and the potential market share is not small." Xu Yi continued, "Although our Xingchen L7 has shown its strength in the 300,000 yuan price range, it doesn't mean that the market at other price points doesn't need six-seater SUVs, right? I browsed online comments, and many netizens have a positive attitude towards the Xingchen L7. The only complaint is that this car is too expensive at 300,000 yuan."

This is due to economic constraints, but also reflects market demand. I believe there is a significant market gap in the price range of 150,000 to 200,000.

The SUV segment around 150,000 yuan is definitely the most competitive market for domestic Chinese brands right now.

Not only did they have to face the dominance of joint venture brands, but they also had to contend with the encirclement and suppression by domestic brands such as Great Wall, Geely, and GAC. This is how the JAC Refine series was wiped out.

But if we change our approach and put in a range-extended SUV, things will be different.

Besides space and features, fuel efficiency is also a key consideration for family SUVs.

If we compare today's stars to ideals from a past life, then Leapmotor, which rose to prominence by absorbing the aura of those ideals, hasn't even built its first car yet.

It's inevitable that one's luck will be drained by following trends.

For example, the current pure electric mini market is developing and flourishing much faster than it did in the same period of the previous life.

In that case, why not create a co-branded "Redmi Car" yourself!
An Jinhui was startled upon hearing this, feeling that the project had great potential.

It has much more potential than the one that was developed in collaboration with Volkswagen.

……

The other end.

"Ah!"

Li Xiang couldn't help but sneeze, and a sudden chill ran through his body for no reason.

That's really weird!

Ever since the Starry Night L7 was released, he's had this strange feeling that's giving him the creeps.

The originally ambitious extended-range SUV project had to be drastically altered, and it took a lot of effort to convince investors again.

"Mr. Li, what's wrong? Is there something you're not satisfied with about our engine?"

next to.

"I can't believe it," said Gong Kun, vice president of Changan Automobile, curiously.

Li Xiang brought his team to Changan Automobile for inspection, and the two sides reached an agreement on the supply of the 1.2t Blue Whale engine.

Technically speaking, Changan's engine has higher smoothness and power generation than Dong'an's 1.2t prototype. The only problem is that the procurement cost has also increased, and the cost of developing a range extender system is even higher. Changan also has a much stronger patent control than Dong'an.

But there's no better option right now.

The Lifan factory acquired by Li Xiang is also located in the Chongqing area, very close to the Changan Blue Whale Power factory. After several contacts and expressions of sincerity, the opportunity for this cooperation meeting finally came.

"No, I'm very satisfied with your engine technology. I'm just a little tired, probably because I haven't been sleeping well lately," Li Xiang said with a sigh, rubbing his nose.

Changan's willingness to cooperate, allowing both parties to smoothly complete the development of the range-extended powertrain system, is clearly a cause for celebration.

But he had a bad feeling about it.

But I couldn’t say it.

Weird!

……

(End of this chapter)