When I am reborn, I just want to be a top student

Chapter 809 Exorbitantly Priced Batteries: If You Don't Buy Them, You'll Be Left Behind

The quote came out quickly.

汽车领域,分别是BYD、特斯拉以及奔驰,以1350美元、1380美元和1400美元拿下了2019-2020年玄武电池-旗舰款独家采购权。

In the smartphone sector, Apple, Huawei, and Samsung secured exclusive purchasing rights for $1384, $1454, and $1486 respectively.

In the consumer electronics sector, Xiaomi, Huawei, and Samsung secured exclusive procurement rights.

When Wang Donglai announced the final list of those who won the exclusive purchasing rights, the audience was not surprised.

When Wang Donglai revealed the price, everyone was already mentally prepared.

After all, only industry leaders have the financial resources and the courage to secure exclusive purchasing rights at this price.

BYD is currently the largest private enterprise in China's new energy vehicle sector, while Tesla is a globally renowned automaker that built a factory in Shanghai last year in preparation for entering the domestic market. Mercedes-Benz, on the other hand, is a traditional luxury car brand with abundant funds, making it entirely reasonable for them to acquire the procurement rights.

The only surprise was that representatives of several traditional luxury car brands on par with Mercedes-Benz, such as Audi and BMW, looked rather unhappy at that moment.

Their asking price wasn't low either, and they thought they could secure the procurement rights, but reality gave them a slap in the face.

Now that Mercedes-Benz has secured the exclusive purchasing rights, their long-time rival will need to adjust their plans and take countermeasures.

Just when everyone thought the procurement meeting was over, Wang Donglai stood on the stage and spoke again.

"In addition to the Xuanwu Battery - Flagship Edition, we have also launched the Xuanwu Battery - Standard Edition this time."

"The standard version of Xuanwu battery has an energy density of only 1000 kWh, and the price will be much lower. However, due to production line issues and production arrangements, the supply of the standard version of Xuanwu battery will not be large, and the launch time will be three months later than the flagship version."

"Therefore, in order to protect the commercial interests of our partners, I have decided to extend the exclusive purchasing rights for the standard model to a two-year contract, and only one company will be supplied in each sector."

"These are the specifications for the standard model. You can take a look. If you're interested, you can place your bids later."

As Wang Donglai finished speaking, the crowd below the stage immediately became excited and thrilled.

What a twist!

The Xuanwu Battery flagship model is too expensive. Even though they were prepared beforehand, they still had to grit their teeth and buy it.

But I didn't expect the price to be so high.

A typical power battery used in new energy vehicles is about 50 to 60 kilowatt-hours. If a ternary lithium battery is used, the cost is between 40,000 and 60,000 yuan. However, if the Xuanwu Battery - flagship model is used, the cost of the battery alone reaches 600,000 US dollars.

Of course, the former uses ternary lithium batteries and its range may only be a few hundred kilometers, but if it is replaced with xuanwu batteries of the same kilowatt-hour, the range will exceed two thousand kilometers.

Traditional power battery packs typically weigh between 280 and 450 kg, but with the Xuanwu Battery - flagship model, only 100 kg is needed, reducing the vehicle weight by 180-350 kg and reducing energy consumption by 8% to 15%.

This achieves a perfect closed loop of high energy density, lightweight battery pack, low energy consumption, and longer range.

Furthermore, for industrial products like automobiles, smaller battery packs free up more design space.

The greater the space utilization of a car, the more design possibilities there are, the better the carrying capacity, and the better the user experience.

Therefore, for car companies aspiring to become high-end brands, even if the Xuanwu Battery flagship model is expensive, they have to grit their teeth and acquire it.

If gasoline-powered cars can be worth tens of millions of yuan, why can't new energy vehicles?

New energy vehicles equipped with the Xuanwu Battery flagship model are, in some respects, more technologically advanced than any gasoline-powered vehicle.

For example, acceleration from 0 to 100 km/h, interior space design, intelligent design, and so on.

The rapid rise of new energy vehicles and their capture of nearly half of the market share are not without reason.

Such significant advantages are one of the main reasons why the Xuanwu Battery flagship model is priced so high.

Originally, it was thought that Galaxy Technology would only supply the flagship model this time, but unexpectedly, there will also be a standard model available.

Although its energy density is not as high as the flagship model, its performance is still far superior to that of current ternary lithium batteries or lithium iron phosphate batteries.

Of course, the price will be much cheaper than the flagship model.

When this is reflected in the product, it is no longer so unattainable.

After all, the higher the price of a product, the smaller its audience will become.

There is a relative equilibrium range between price and market.

If the number is between one million and three million, then its consumer base might be around several hundred thousand people. But if it exceeds five million, then that number will plummet to tens of thousands.

Companies need models worth over five million to maintain their image, and they also need high-end models priced between one million and three million to generate profits. For models priced lower, the focus is on scale and winning through volume.

This is not only reflected in the automotive sector, but also in smartphones and other consumer products.

Now, everyone has only one hope: that the price of the Xuanwu Battery - Standard Edition won't be too high.

Amidst everyone's anticipation, Wang Donglai directly announced the pricing for the standard model.

"In order to expand the application range of Xuanwu batteries and broaden the market, we have made significant concessions on the pricing of the standard model."

"The standard version of the Xuanwu battery is priced at $900 per kilowatt-hour."

As the price was announced, the audience couldn't help but gasp.

At $900 per kilowatt-hour, this price is already ten times the current price of ternary lithium batteries.

However, although they were shocked by the price, everyone quickly started calculating in their minds.

With the Xuanwu battery priced at $900 per kilowatt-hour, how can a balance be found between range, cost, and selling price?

If the flagship new energy vehicle equipped with Xuanwu batteries is destined to be a toy for the super-rich, then the standard luxury car equipped with Xuanwu batteries costing $900 per kilowatt-hour can appeal to a wider range of customers.

By keeping the range at 1,000 kilometers, the battery pack size can be reduced, thus controlling costs.

With this calculation, the representatives quickly came up with a cost baseline in their minds.

For a moment, we looked at each other, our eyes filled with a hint of wariness.

Unlike flagship models, which are destined to be something only a few companies can compete for, they can only enhance brand image and cannot bring much substantial market increase or profit growth.

However, the standard model is different; it can definitely achieve both critical acclaim and commercial success.

As before, everyone present was given time to think about and submit their applications.

After half an hour.

When Wang Donglai returned to the podium and looked at the crowd below, he noticed a hint of determination in the eyes of many people.

This time, the pricing is quite simple.

Because each sector truly supplies only one brand, everyone offered the highest price they could.

The final bidding results came out quickly.

Chihuahua, Tesla, and Xiaomi have secured the exclusive procurement rights for the Xuanwu Battery - Standard Edition from 2019 to 2021.

This wasn't Wang Donglai deliberately lowering the price; it was simply that only these three companies offered the highest price of the entire event.

The starting bid was $900, and the three bidders offered $1100, $1120, and $1150 respectively, almost matching the price of the flagship model. Wang Donglai was fairly satisfied with the bidding results.

BYD has secured the exclusive procurement rights for the flagship model, and combined with its own cutting-edge technologies, it can certainly establish a high-end product image.

As for not getting the standard model, it doesn't have much of an impact.

Given the domestic consumer market and consumer attitudes, it would be unrealistic for BYD to expect to achieve huge sales if it launched a million new energy vehicles.

Only a foreign brand like Tesla can command such a high price.

However, it doesn't matter. The better Tesla sells, the more Xuanwu Battery sells, and most of the profits still go back to Galaxy Technology. It's like Tesla is working for Galaxy Technology.

As for Chrysanthemum's bold move to consecutively acquire both the flagship and standard models, Wang Donglai wasn't too surprised.

Chrysanthemum's self-developed capabilities are indeed strong, and its brand premium is also very high.

If they don't leverage the powerful performance of the Xuanwu battery to challenge Apple's high-end market, then Wang Donglai will have to question the management skills of Huawei's executives.

The only thing that surprised Wang Donglai was that Xiaomi, despite its own grit, managed to secure the exclusive procurement rights for the standard model.

He knew that Xiaomi was preparing to enter the new energy vehicle field. Logically speaking, they should take advantage of the momentum of Xuanwu Battery and launch their first attack.

However, Xiaomi did not do that; instead, it secured exclusive procurement rights in the consumer electronics sector.

However, after only a little thought, Wang Donglai understood.

Lei Jun's actions are not without reason.

After all, it's about manufacturing cars, and it's entirely done in-house, not through contract manufacturing. So the necessary preparations and procedures still need to be followed.

Even at the fastest pace, it will still take about three years for Xiaomi's new car to arrive.

Securing exclusive procurement rights for Xuanwu batteries in the automotive sector right now is utterly useless.

After the bidding ended, everyone keenly realized that the global industry landscape would change with the supply of Xuanwu batteries.

Thinking this, everyone couldn't help but feel a sense of relief.

Fortunately, the Xuanwu battery is good; both the flagship and standard models are priced too high.

Otherwise, if they really drive down the price and ship on a large scale, that would be a real nightmare.

I'm afraid everyone will have to buy Xuanwu batteries, or they'll be obsolete.

Currently, the impact is only on high-end products; most people can still survive.

Once the cost of Xuanwu batteries comes down, anyone who can't buy them will be doomed.

Thinking of this, everyone silently mourned for Matsushita.

Even the worst-case scenario of being barred from cooperation for three years could cripple Matsuoka.

In the following time, representatives from many companies that had obtained exclusive purchasing rights went on stage to sign letters of intent with Galaxy Technology.

At the time of signing, a deposit of US$100 million was transferred to Galaxy Energy's account.

This is just a deposit; the amount will be recalculated based on the order volume required by each company.

According to the minimum order quantity requirements, these companies that have signed cooperation agreements must purchase more than $120 billion worth of Xuanwu batteries from Galaxy Energy annually.

After the procurement negotiation meeting, Galaxy Technology also prepared a luncheon.

During the meal, Zeng Qun specifically sought out Wang Donglai.

"Mr. Wang, could you give me a chance? I have some collaboration ideas I'd like to discuss with you."

Looking at Zeng Qun, Wang Donglai nodded slightly without saying anything more.

"Mr. Wang, I'd like to discuss the patent licensing of Xuanwu batteries with you. I know that Xuanwu battery technology is very valuable, but I think there is still room for cooperation between us."

"CATL has more than ten super factories across the country and even the world, with extremely rich and powerful production capacity."

"Our intelligent manufacturing level has achieved 95% automated production, with a yield rate consistently above 99.5%. With the same raw material input, we can produce 4.5% more qualified batteries. This is the 'cost reduction secret' brought about by large-scale production and also the guarantee of high profit margins."

"At the same time, we have also signed long-term agreements with 67 of the world's top 100 battery material companies, and the procurement costs of materials such as cathode materials and separators are 15% to 20% lower than the industry average."

"The value of Xuanwu batteries needs to be proven through the products of top global customers. In this respect, we can also help Galaxy Technology expand its customers and markets."

“Patent licensing is not a one-off deal, but the beginning of continuous technological evolution. We have 2.1 licensed patents, which we can all open up to your company to form a ‘patent pool’ with Xuanwu Battery, jointly resisting external infringement and reducing litigation risks.”

"In addition, leveraging our influence in international standards organizations such as IEC and ISO, we are promoting the material specifications and safety standards of Xuanwu batteries to become industry-standard norms."

“I don’t think this is a deal, but a fight side by side.”

"On the track of the energy revolution, there are no 'lone travelers'. CATL has developed to the point where it is jointly developing battery cells with BMW, sharing manufacturing experience with Tesla, and forming a strategic partnership with BYD. Today, we are taking the liberty of proposing the idea of ​​patent licensing, which is also based on the concept of mutual benefit and win-win."

"It's not just about the market, production capacity, and capital; it's about the great cause of bringing Xuanwu batteries to all of humanity."

Zeng Qun had specifically studied Wang Donglai and believed he knew Wang Donglai very well.

These words were prepared in advance.

Using ideals and career aspirations to persuade Wang Donglai has a high success rate.

Just as Zeng Qun was thinking this, Wang Donglai's reaction was extremely calm and indifferent.

"Mr. Zeng, I'm curious, what price is your company planning to offer to secure the patent license?"

Upon hearing Wang Donglai's words, Zeng Qun's eyes flashed with excitement and joy, because in his view, it meant that Wang Donglai had agreed to grant the patent.

"Mr. Wang, to show our sincerity, we can offer 5 billion in patent licensing fees."

"Or there is another cooperation model, in which we are willing to give up 20% of our shares in exchange for the patent of Xuanwu Battery."

“You hold these shares independently and have full voting rights. The company’s core decisions require your participation. You are not a shareholder, but a strategic partner.”

Zeng Qun cautiously stated his conditions, constantly observing Wang Donglai's changing expression.

"Hmm, Mr. Zeng has really got a good plan!"

“CATL is already listed. If news breaks that it has acquired the patent for Xuanwu Battery, its market value will probably easily exceed 500 billion. The money spent on buying Xuanwu Battery will be immediately earned back from the stock market. Isn’t this like paying to buy yourself?”

"President Zeng, I will not agree to either patent licensing or exchanging patents for shares."

"In addition, when we asked your company to manufacture the products, we made some requests, but according to our investigation, it seems that your company has not actually implemented them."

"Let's outsource the manufacturing for next quarter to BYD!"

"Okay, that's it!"

After Wang Dong finished speaking, he turned and left without paying attention to Zeng Qun, whose face was pale.

Watching Wang Donglai's departing figure, Zeng Qun felt utterly dejected. He had neither secured the patent license for Xuanwu batteries nor lost the contract manufacturing for Xuanwu batteries in the next quarter. He couldn't even imagine how low the company's stock price would plummet if this news got out. (End of Chapter)

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