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

Chapter 317 Tear
"Mr. Musk, this was my mistake, which caused negative publicity for the company..."

When Zhu Xiaotong received Musk's call upon him to arrive in the capital, he also checked the online public opinion trends.

While secretly cursing this generation of netizens for their inability to distinguish right from wrong, he also harbored a secret grudge against Xingchen Motors.

"Zhu, this is a minor issue. It's just that Mingxingchen Group is indeed different from the Chinese car brands we know. We might encounter some new challenges in this market..."

Musk, on the contrary, smiled easily.

His focus was on handling supplier communication and collaboration, as well as finalizing the groundbreaking ceremony for the super factory.

have to say.

Huaxia's factory construction efficiency is still too authoritative.

He was so authoritative that he didn't take these "minor opinions" to heart at all.

Can you imagine?
From approval to signing to commencement of construction, what would take two years to complete in other countries has only taken half a year in China!

There are no environmental issues, no political stance issues, and even the labor costs and labor system are so superior.

He had long considered this new energy vehicle market as his own.

Currently, many Chinese electric vehicles converted from gasoline models and immature new energy vehicles are achieving sales in the market. Once Tesla brings down the mass production cost, other brands will be nothing more than worthless junk in its eyes.

This is the confidence of a regular army!
Zhu Xiaotong was taken aback: "You mean Xingchen Group will become our direct competitor?"

"If they can bring this concept car to mass production, market conflict is inevitable sooner or later."

Musk nodded.

Tesla currently relies mainly on two models: the Model S and the Model X, with the Model S being the most well-known.

In the million-level new energy vehicle segment, it has absolutely no rivals.

What Tesla is doing is leveraging the product strength and brand recognition of the Model S to expand its product line further down the value chain.

As long as Model S maintains its high-end status, Model 3's success is only a matter of time.

But now it's different.

First came Porsche, and then Xingchen Motors.

Porsche has a relatively high brand image and a limited market share. Musk believes there is no competition in terms of product ecosystem.

The rapid development of Xingchen Motors gave him this sense of threat; the group's intention to expand was very obvious.

Don't be fooled by Tesla's focus on high-end pure electric vehicles like the Roadster supercar, Model S, and Model X in the past few years.

But how much money can you make selling high-end cars and supercars?

What he really wanted to target was the mid-range market.

The real trump card is the Model 3, which will soon be mass-produced in China.

In China, that would be a car in the price range of 200,000 to 400,000 yuan.

It has the highest profit margin and the widest sales volume.

...

If Xingchen Motors really mass-produces this pure electric sports car, and then leverages its brand advantage to launch a new energy sedan priced around 300,000 yuan, its ecosystem will almost completely overlap with Tesla's.

It's no exaggeration to call them competitors.

"They have achieved some success in the home market, but they have taken shortcuts by focusing on range extensions and features. To truly gain consumer recognition in the high-end market, they need more strength. It's not enough to just make the car spin around; they need at least track performance and truly outstanding capabilities."

After thinking about all this, Musk smiled easily.

In his view, Xingchen Group's experience is all concentrated in the home market, focusing on configuration stacking.

What truly needs to improve brand positioning is precisely the racing culture and chassis technology that are completely lacking in China.

The reason why Models has gained recognition from high-end consumers is because of its solid straight-line acceleration performance, as well as its record for the fastest four-door sedan at Laguna Seca and its performance on private track days, proving its leading position in the field of electric high-performance cars.

Next, they also have a lap-setting marketing plan targeting the Nürburgring, one of the world's most prestigious racetracks.

In this field.

Chinese automakers can't catch up even if they try.

The truth is that simple.

None of the top 30 finishers on the Nürburgring lap time chart have a record of a Chinese brand production car.

Not convinced?

If you're not convinced, come and run a couple of laps.

High-end sports cars do not differentiate between gasoline and electric power sources. Without absolute performance to support them, no matter how well the exterior and functions are made, it is just a castle in the air.

……

Just as April ended, news broke from authoritative media that Xingchen Group's internal statistics showed sales exceeding 61,000 units.

This amazing achievement has brought jubilation to those inside, while leaving those outside still in awe!

among them.

With sales of 11,000 units, the Starry Night L7 achieved "monthly sales exceeding 10,000" for two consecutive months, shattering more than 85% of the doubts and prejudices.

When faced with the heavy burden of sales figures, everyone felt a lump in their throat and could no longer voice the opinions that "range-extended refrigerators are outdated" or "refrigerators and large color TVs are useless."

This is absolutely incredible in the entire history of Chinese independent car manufacturing!

Xingchen Automotive is disrupting the traditional car manufacturing market (×)
Xingchen Automotive is tearing apart the traditional car manufacturing market! (√)
On the last day of the Capital Auto Show, Mr. Wan, the head of the Ministry of Science and Technology, personally called to express his regards. For him, paying attention to Xingchen Auto is equivalent to paying attention to the development of new energy vehicles in China.

"Your car is quite interesting. Are you really aiming for the million-yuan market?"

Mr. Wan personally inspected the car and believed that China's current independent car manufacturing, whether in terms of consumption or industrial chain foundation, is still at the level of ordinary family cars.

However, it cannot be denied that if such a car really existed, it would definitely be a landmark symbol.

"Leader, to put it simply, Xingchen Group has higher technological aspirations and hopes to give wealthy people in China more choices, creating a truly high-end Chinese brand. Only models in the million-yuan range can meet these requirements..." Xu Yi replied.

Boss Wan: "What if we don't just go through the motions?"

"We hope that the sales volume and scale of mid-to-low-end models can be better, and that they can have a stronger competitive advantage!" Xu Yi said sincerely.

When discussing sales volume and scale, we can't just talk about configuration and cost-effectiveness.

Many cars have decent features and high cost-performance ratios, yet their sales are mediocre.

Luxury brands, on the other hand, have entry-level base models that have nothing, making them the cheapest in their class, yet they still manage to dominate the market.

This phenomenon is particularly prominent in the passenger car sector.

"Xingchen plans to build a sedan in the 34C class?" Leader Wan understood immediately and suddenly smiled, praising the young man's excellent grasp of consumer market strategies.

He previously had ten years of work experience at the Audi Group, where he was involved in almost every aspect of the automotive company and had a deep understanding of the market strategies of luxury giants like BMW, Mercedes-Benz, and Audi.

Porsche's most profitable model is not the 911, but the 718.

BMW and Mercedes-Benz's most profitable models are not the M series or AMG, but the 34C.

But without the 911, people wouldn't appreciate the 718; without a higher flagship model, people wouldn't appreciate the 34C.

This brand effect is the deepest moat of traditional car manufacturing giants.

"Yes, the luxury sedan market is huge, and the cost is much lower than building SUVs. Nowadays, everyone says that Chinese brands only know how to make family cars and differentiate themselves from competitors. If possible, I'd like to challenge the weakness of domestic brands..."

Xu Yi did not deny it.

In his memory, no one in China had ever accomplished this feat during the era of gasoline-powered cars.

To break the monopoly of luxury brands like BMW, Mercedes-Benz, and Audi (BBA) on the 300,000 RMB luxury sedan market as a new energy vehicle, we have to start with the Tesla Model 3.

During this period, there were also subsequent domestic models such as Jike 001 and NIO ET5.

But when it comes to a true milestone, we have to mention the Xiaomi SU7 brought by that man!

It is the only pure electric sedan besides Tesla that has achieved monthly sales of over 20,000 units.

Lei Jun's strategy is undoubtedly a combination of BBA (BMW, Mercedes-Benz, Audi) and Tesla.

The combination of a high-end prototype as a foundation and a performance benchmarking model ultimately led to this sales miracle.

To compete in the high-end sedan market, you need a higher-end prototype sports car.

This is path dependency.

It is also the optimal strategy recognized by the market.

"I look forward to the day when the government will support any new energy vehicle with core technologies..."

General Wan nodded.

This is a good thing no matter how you look at it. Pure electric vehicles can spread to more fields, and the domestic new energy industry will become more developed.

He then mentioned the reduction in subsidies and policy changes this year.

Last year, cash subsidies for range-extended vehicles priced above 300,000 yuan reached over 30,000 yuan, but this year that amount will be reduced to 22,000 yuan. For new energy vehicle companies, this increased cost needs to be offset through sales volume and more operational strategies. We need to inquire with Xingchen Group whether they are prepared for this.

The reduction in subsidies is comprehensive.

Subsidies for pure electric vehicles have also been reduced.

This is a devastating blow to any developing new energy vehicle company.

Some new energy vehicle models that were already struggling with sales have started to cry foul!

And new players.

This also means that higher financing and stronger product capabilities are needed to establish a foothold.

Mr. Wan has recently been listening to the voices of many CEOs and entrepreneurs of independent brands.

There are many indirect complaints or expressions of pressure in the text.

But all he could do was reassure the brands to prepare for the response.

The policy rollout will not stop.

The government has already spent enough money at this level.

Exemption from vehicle purchase tax is one thing, cash subsidies are another, and free license plates in first-tier cities are yet another.

This period has led to numerous instances of fraudulent subsidy claims.

Now it finally has a sense of tracing back to the source.

……

"Rest assured, leaders, Xingchen Group's various models have healthy cash flow and profits, and we will actively embrace the changes brought about by the policies."

Xu Yi said he didn't feel too much pressure.

The most expensive model, the Xingchen L7, benefits from the advantages of new energy vehicles and also has the low cost of a range-extended mode.

Moreover, they had already made preparations after learning the news at the end of last year.

Taking advantage of the auto show, Xu Yi also discussed new procurement strategies with various suppliers to optimize for further reducing mass production costs.

"it is good!"

Boss Wan simply said "Good!"

I am extremely satisfied.

What is a top student?
That's what you call a top student!

There is no crying or complaining, only confidently embracing and actively responding!
"In addition, there is new feedback from Shanghai and Shenzhen regarding the vehicle registration policy. Leaders of various first-tier cities believe that the surge in new energy vehicles and hybrid vehicles brought in through the free green license plates is a bit too much, and the data has exceeded the expectations of the traffic management department, bringing great traffic pressure..." Leader Wan added.

Traffic congestion has always been a problem in first-tier cities.

If vehicle license plates are not restricted, the only outcome will be traffic jams!
During peak hours, nobody can leave.

As new energy vehicles become popular, people's attitudes change quickly, spreading rapidly from one to ten, and from ten to a hundred.

If the road widening efficiency can't keep up with the traffic flow, and everyone gets stuck in traffic cursing each other, who should be blamed: the traffic authorities, the car buyers, or the car manufacturers?
Therefore, the relevant departments can only formulate measures.

Now it was Xu Yi's turn to be nervous.

"Are first-tier cities going to restrict hybrid vehicle license plates?"

That's okay.

According to internal statistics, the Starry Night L7 alone contributed nearly 3,000 units to monthly sales in Shanghai, demonstrating its strong performance.

However, in his memory, Shanghai's restrictions on hybrid vehicle license plates started at least at the end of 22.

Surely the relevant departments aren't that petty?

Impossible, absolutely impossible!

"Hybrid vehicles are fine, since they're all large cars costing over 100,000 yuan. The main feedback right now is about the Mini models that are currently on sale. The relevant departments have this intention, so they're giving you a heads-up beforehand. Don't spread this around in the market..."

Leader Wan noticed the change in tone and found it intriguing.

Even our CEO Xu has moments of panic.

...

The sales of the new energy mini are really too strong.

It has been rampant in the market for over a year.

Led by the Star Mini, monthly sales average over 30,000 units, with peak sales exceeding 35,000 units, or even 38,000 units.

In addition, there's Wuling Mini, and automakers like Chery and Changan are following suit...

Each MINI model has an average monthly sales volume of no less than 12,000 units.

At least a quarter of them flowed to first-tier cities.

For less than 50,000 yuan, you can win a green license plate that allows you to drive without restrictions.

At first, the citizens complained!
Still speechless.

They even complained about the "old man's car"!
That's unfair! That's unjust!
We gasoline car owners have paid purchase tax, fuel and road maintenance fees, and even had to draw license plates based on social security contributions. How can you, a new energy vehicle owner, get a green license plate for just tens of thousands of yuan?
What do you see now?

Nobody's complaining anymore; if you can't beat them, join them!

One by one, they quietly began to find it delicious.

This trend is the most frightening.

The pressure is now on the traffic management department.

"The relevant departments have decided to restrict green license plates for A00-class vehicles in first-tier cities?" Xu Yi understood.

This was anticipated by Xingchen internally.

The Wuling Mini became a huge hit 20 years later.

Just a year and a half later, Shanghai introduced license plate restrictions for A00-class new energy vehicles, demonstrating the significant impact of small new energy vehicles on traffic data in first-tier cities.

Xingchen Group brought this process forward by a full three years.

During this period, the models sold by Xingchen, as well as the pure electric Mini models from other brands that followed suit, continued to flow into cities with license plate restrictions.

"That's the expectation, but how to formulate and restrict it is still under discussion. Perhaps the criteria will be applied to larger and more expensive cars."

With Mr. Wan releasing this news, it will be at least next year before it's implemented.

The direction of the policy will gradually be revealed to businesses, and opinions will also be solicited.

Xingchen was undoubtedly the first to know.

"This is a good thing!"

Xu Yi took a sip of tea and raised both hands in agreement!

Even without sales in first-tier cities, the market share of the Star Mini will only drop by 20% to 30% at most. Given its price point, it will continue to focus on lower-tier markets.

"You've made your decision quickly, but you don't have any suggestions for improvement?"

Mr. Wan was surprised. After checking the sales data, he found that Xingchen Mini accounted for half of the group's total sales. He was also prepared to listen to Xingchen's side of the company's perspective.

I didn't expect it to be so straightforward.

"Enterprises shouldn't be a burden on the country. If the green license plates for A00 class vehicles are no longer issued, we can still manufacture A0 class vehicles. To be honest, we also have a model called Star Wish that we're waiting to be approved for development..."

Xu Yi was very relaxed.

The 3.8-meter Starry Mini isn't enough for Shanghai license plates, so why don't I launch a 4.2-meter Star Wish?

When it comes to leading the low-end new energy vehicle market, no one has more experience than Xingchen Automotive.

They can also take advantage of this opportunity to expand their low-end product line from 3-5 to 6-10.

The 20GWH new plant built by Weineng Battery in Luzhou using the funds raised from its IPO is about to be completed, and the Xingchen F2 car manufacturing plant is also nearing completion. At full capacity, it can achieve an annual production of 40 vehicles, greatly expanding both battery and vehicle production capacity.

Conversely, companies that rely solely on the pure electric mini should be in a bind.

Mr. Wan was constantly amazed by Xingchen's internal vehicle planning.

Got it!
It's not just top students.

They even predict and analyze exam questions!
They even planned ahead and considered policy tightening—they're so cunning!

He sighed inwardly.

He was destined to succeed.

……

5 month 10 day.

Xingchen has been internally managing the pressure from production capacity and sales volume.

The product department presented its plans for the second half of the year to revamp the Starry Sky S7 and Starry Sky Mini.

The two models have been on the market for a year and a year and a half respectively, and have officially entered the stage of regular operation, so it's time for them to be updated.

This facelift is also in response to the reduction in new energy vehicle subsidies.

The actual R&D and manufacturing costs of the Starry Sky S7 have decreased significantly in the past year, and the gross profit margin of the whole vehicle has gradually increased from 15% to 23%.

Due to the reduction in subsidies and the addition of new features, the gross profit margin has dropped to around 17%.

There are two opinions within the company: one is to reduce features and lower prices to maintain a gross profit margin of close to 20%, and the other is to raise the price of the high-end model by 10,000 yuan.

The specific plan is still under discussion.

"I think that with the addition of the silicon carbide module, the new model can now be compatible with 120kW charging piles with just one gun. In terms of product capabilities, raising the price by 10,000 yuan is not a problem, and the market can accept a price increase due to added features..."

In the conference room.

Product manager Zeng Daiyan said.

Due to changes in national subsidies and differences in subsidies from various provinces, the prices of new energy vehicles on the market are now dynamic.

Many brands took this opportunity to raise prices quickly.

The addition of this feature to the Starry Sky S7 is truly generous, and due to sales growth, two more free car manufacturer colors have also been added.

In their view, the price increase was justified.

The costs are what they are.

After reviewing the proposed upgrade, Xu Yi simply said, "Both reducing features and lowering prices, and increasing features and raising prices are not suitable. I'll take a middle ground between these two options: try to increase features while maintaining the original price, add a silicon carbide module to the standard version to use up the inventory of the previous generation's vehicle infotainment chip, and add the same vehicle infotainment chip and silicon carbide module as the L7 to enhance competitiveness at the same price point."

These words stunned everyone!
--this.

Increased features but unchanged price?

"Mr. Xu, at this critical juncture, aren't we going to raise prices?" Yu Nian asked, also taken aback.

"We have established a firm foothold in the pure electric sedan market of 18 to 22 yuan, and our 17% gross profit margin is higher than most of our competitors. Even though subsidies are fluctuating now, we try to avoid focusing on the sensitive issue of price."

We're taking a different strategy. For example, we could cancel the free home charging station and delivery/installation service, which would reduce costs by 3000 yuan. We could also offer a year of free maintenance and free charging service. While the overall cost might be slightly higher, we'd gain better market reputation, and the actual end-user cost would be acceptable.

Xu Yi offered another perspective.

It's not that we won't raise prices, but rather that we'll raise them in a way that's subtle enough that consumers won't even notice.

With subsidies being phased out this year, consumers are very sensitive to price increases. If he remembers correctly, many new energy vehicle companies experienced a sharp drop in sales, or even collapse, after raising prices.

The policy is decided by higher authorities, and the cost is borne by the car manufacturers.

But consumers won't care about this or that; if you raise prices, I won't buy from you.

Or they might buy it and then criticize you.

It's just so realistic.

Some car companies are smarter. They first announce that they will cover the price increase themselves, but in reality, they cut all related benefits and home charging stations. In the end, the terminal cost is slightly lower, but they indirectly gain a lot of goodwill and sales.

After careful consideration, Yu Nian also felt that this solution was indeed more acceptable to people.

"Adding features is a normal part of the model update process, and not raising prices is a market strategy. In addition, we can also offer a policy where customers who purchase the old model retain their rights, while those who order the new model with added features do not retain their rights, thus quickly clearing out the relevant inventory."

Xu Yi made a brief decision on the Starry Sky S7 redesign at the meeting.

In the afternoon, he received another call from Luzhou, where Bai Yongxiang reported an important matter to him.

Meizu issued another notice regarding organizational restructuring the day before yesterday, with one announcement attracting attention: Yang Yan will no longer serve concurrently as President of the Flyme Business Unit and Senior Vice President of the E-commerce Business Unit.

The Meizu 15 was released in April and positioned in the mid-range market. However, just fifteen days after the launch event, media outlets reported that sales in the first two weeks had not exceeded 4 units.

Internal pressures have intensified further.

Huang Zhang's original intention was to remove Yang Yan from her concurrent position as Senior Vice President of the E-commerce Business Unit, while keeping her job responsibilities and rank unchanged within the Flyme Business Unit.

"Mr. Huang, the Meizu 15 is a phone that everyone has poured their heart and soul into. Whether it's the design or the system, it has reached the limit of our current capabilities. Whether it's the Ru Kiln White series design, the brand-new SupermBack, the mEngine linear motor... the vibration is the best among all Android phones. It also features dual stereo speakers, making it excellent in many aspects."

"But as the team decided before the Lunar New Year, we have suffered losses in terms of chips. This time, the 15 uses the Snapdragon 660, which is a mid-range processor, and the 15 Plus uses Samsung's Exynos 8895 processor. The consumer market still doesn't accept it. Consumers who buy in the 2,000 to 3,000 yuan price range are very picky. And we are much more expensive than our competitors who use the Snapdragon 845 processor at the same time. Consumers don't look at the motor, screen, or camera. They have already decided the winner just by looking at the chip."

Yang Yan spoke at length, venting all the pent-up frustration in her heart.

If last year's Pro 7 was stubborn...

This year's Meizu 15 is even more headstrong than the rest.

Even without a Snapdragon flagship chip, the price is still higher than other models with mid-range chips.

It's not that no one in the team offered suggestions, but Huang Zhang's ideas often covered the vast majority, and the remaining small group ultimately remained "unnoticed."

Looking at the entire cycle, he felt that even handing over the inventory orders of Samsung chips to Meizu would be a good choice.

"I did misjudge the sales figures for the 15, but the 16, which will be released in the second half of the year, will be equipped with the Snapdragon 845 and will have a very high overall cost-performance ratio. I believe it will receive good feedback and the sales figures at the end of the year will not disappoint."

Faced with such a rebuttal, Huang Zhang's face turned rather ugly, but he still spoke calmly.

His current focus is entirely on going all in on the 16 series at the end of the year.

“Mr. Huang, the competitiveness of the model is one aspect, but I think we should also improve the supply chain, quality control and after-sales service. Sales are not just about holding a press conference to see product strength; it is a long-term thing…” Yang Yan pointed out a common problem encountered in the e-commerce business.

Their control over the supply chain is very poor, they have almost no bargaining power, which makes it difficult to increase production capacity in a short period of time.

However, quality control issues have been a long-standing problem.

Quality control issues always arise when new technologies are introduced, but other mobile phone manufacturers offer much better after-sales service than Meizu.

This is because Meizu is very cost-conscious in its after-sales policy, assumes few responsibilities and obligations, has few spare parts, and often has to wait several days to replace parts, which has led to a poor reputation in the long run.

"The company is currently facing a tight cash flow situation, and we are also streamlining our after-sales service structure. These minor issues will be resolved once sales improve. Moreover, when consumers encounter problems with their phones, Meizu's after-sales service is not indifferent; at most, there may not be enough spare parts, which is not as serious as you described."

Huang Zhang waved his hand dismissively, not taking this minor issue to heart at all.

Moreover, Meizu has its own advantages and fan base, so its product inclusiveness is not that bad.

After-sales service is a rare occurrence; who needs to handle after-sales service every day?

No one present uttered a rebuttal.

Yang Yan was speechless for a moment, her mood sinking to the bottom.

As he walked out of the conference room, he suddenly recalled the conversation between Bai Yongxiang and Li Nan when they left.

This might be a wise move.

Otherwise, I'll end up like I am now.

Finally, the 15th arrived, but we have to endure double the pain.

This feeling of powerlessness.

It caused him to suffocate continuously.

……

(End of this chapter)