2003: Starting with Foreign Trade

Chapter 970 "Wei Lai's Diligent Practice of Internal Strength"

"The world is undergoing some changes, so we must continue to work hard."

Weilai's current advantages lie in product quality, service, and intelligent features, such as intelligent cockpits and self-developed vehicle systems. In addition, in the industrial chain, it has an absolute advantage in the most core power battery for electric vehicles.

If I had to describe it simply, it would be that Wei Lai is leading in terms of ideas.

Tan Jincheng has experience in the entire new energy industry chain. Whether it is a traditional car company or an emerging force, he is much more advanced in terms of concepts. Having experienced the era when electric vehicles were popular, Tan Jincheng understands what consumers need very well.

However, Weilai does have its own weaknesses, namely insufficient technological accumulation. Although Weilai has always regarded mainstream car companies such as BYD and Tesla as its targets, and Weilai has done well in competing with these companies, the weakness of insufficient technological accumulation cannot be solved in one or two years.

BYD has over 15 years of technological accumulation and a leader like "Boatman Brother" who is obsessed with technology, while Tesla is backed by the foundation of a century of industrial development in Europe and America. There is still a long way to go for BYD.

Welai still needs to continue to invest in technological research and development. Since 2018, Welai has invested more than 10 billion yuan in research and development, increasing its R&D investment to 10% of its revenue. This year will be the third year that Welai has invested heavily in R&D.

Speaking of the changes in Wenjie, it was also thanks to Wei Lai's help.

Undoubtedly, Li Bing's battery swapping technology is highly controversial, and the probability of its success is actually not high, because he is betting that battery technology will not make much progress. However, solid-state batteries are already in the research and development stage, making Li Bing's battery swapping technology precarious.

However, regardless of how fast solid-state batteries develop, battery swapping technology is certainly feasible at present. With battery technology still relatively backward, battery swapping is the best way to solve range anxiety.

The reason why Wenjie is so popular is largely due to its convenient battery swapping feature, which is actually Wenjie's biggest selling point.

In April 2020, the mainstream range of batteries on the market was between 400 and 600 kilometers. However, the actual range is affected by driving conditions and will decrease by about 20% to 30%. The mainstream battery technology is controlled by leading companies such as BYD, WIL (Jin New Era), CATL, and Tesla.

Electric vehicles equipped with Jinshidai Xuanwu series batteries can achieve a maximum range of 650 kilometers (NEDC standard). Representative models include Tesla's Model S, Weilai's ES6 and ES8, BYD's Han EV, and Wenjie's M9.

These models represent the highest-end range currently available on the market. There are also pure electric models with long range and ultra-long range, but they are not widely used and are mostly just a gimmick.

The future trends of power batteries will be divided into three categories. The first is supercharging, the second is Li Bing's battery swapping solution, and the third is the commercialization of solid-state batteries. According to the development speed of solid-state batteries, their commercialization will not be until at least 2026, and it is unknown whether they will be mature by around 2030.

Therefore, there are currently only two directions for battery technology on the market. While laying out the future of solid-state batteries, the future development direction is supercharging, but battery swapping is also a way to replenish energy.

Investing in technology is actually necessary. Large corporations cannot go all in on one technology. Success would certainly allow them to reap the biggest rewards, but failure would also be disastrous.

The changes in Wenjie also stemmed from the beginning of this year. Li Bing searched extensively for local governments and investment institutions, but none were willing to invest. It wasn't until early April that the Luzhou Municipal Government decided to step in.

These changes all originate from the Realm of Hearing itself.

Since Wenjie's stock price fell to one US dollar at the end of October last year, threatening delisting, it has been in an extremely dangerous state. Accelerated losses and a shortage of funds are problems that Wenjie cannot solve in a short period of time.

However, after the recall service and the replacement of the battery solution provided by Weilai, and after subsequent vehicles used the same solution from Weilai, the performance of Wenjie vehicles became much more stable.

At the same time, Li Bing also put a lot of effort into service. Even while traveling around to attract investment, Li Bing tried his best to meet with clients and soothe their emotions, and finally managed to stabilize the basic business.

In addition, Wenjie performed well during this special period this year. By learning from Weilai's online sales system, Wenjie's sales have been very good since March, thanks to the rise in word-of-mouth.

To become a leading force among emerging players, Wenjie must have some solid foundation; it's impossible that losing so much money wouldn't have had any effect at all.

Currently, Wenjie's stock price is hovering around three US dollars, with a market value of around 30 billion US dollars. Compared to Wenjie's losses, this market value is simply appalling.

"Mr. Tan, it's been a long time."

Luzhou, April 29.

After hiding in Ningbo for four and a half months, Tan Jincheng finally left Ningbo and made his first appearance in another city. Leaving Ningbo means that Tan Jincheng's life has returned to normal.

Currently, of all of Weilai's domestic and international operations, only Proton and Lotus Heisel have not fully resumed production. The lithium battery factory in Germany, which resumed operations in April, has gradually returned to normal.

However, compared to China, the resumption rate of work overseas is still relatively low, with most people still working from home.

"Long time no see, soldier. Here's a belated Happy New Year."

"Yes, it feels like a different world."

Li Bing remarked that the way they addressed each other was quite interesting. Li Bing called Tan Jincheng "President Tan," while Tan Jincheng still called Li Bing "Brother Bing." In fact, this was a psychological suggestion of the change in status.

Tan Jincheng nodded in agreement: "That's definitely the feeling."

Li Bing's feeling of being in another world refers not only to this special event, but also to the future of Wenjie. In fact, if Wenjie does not find a new investor in the second quarter, it will really be doomed.

Even though their cars sold well this year, and even though today was a formal signing ceremony, Li Bing's expression was not relaxed, and Wen Jie was equally not relaxed after receiving the money.

On April 29, a low-key signing ceremony took place, where the Luzhou Municipal Government, together with strategic investors including United Investment and Investment Group, Anhui High-tech Zone, and Weilai Group, invested 7 billion yuan in Wenjie Group in exchange for 24.1% of the shares.

Wenjie, on the other hand, has transferred its core assets (including domestic business, R&D, sales, etc.) to Wenjie ZG and promised to build its headquarters and second production base in Luzhou. However, it will not be so easy for Wenjie to obtain this 70 billion yuan.

The two parties signed a performance-based agreement, requiring Wenjie to submit an IPO application (secondary listing) within four years and complete the listing within five years, otherwise it would need to purchase additional shares. There were also sales targets for Wenjie.

After receiving investment, Wenjie must deliver no less than 20,000 vehicles for two consecutive years.

"Congratulations, Brother Bing. These two betting agreements are actually not too difficult for Wen Jie."

During this special period, large-scale celebrations were not possible. After the signing was completed, Tan Jincheng immediately congratulated Li Bing. Wei Lai also participated in the investment this time, and a portion of the 70 billion yuan was invested by Wei Lai.

In return, Weilai received 4.99% of Wenjie's stock options, making it a significant co-investor in this investment. In addition to providing some funding, Weilai also provided resources in battery supply and assistance in vehicle manufacturing.

Wenjie lacks more than just money; it lacks professional car manufacturing capabilities. Wei Lai was the one who facilitated this investment, and Luzhou also believes that under Wei Lai's guidance, Wenjie will be able to make some progress in car manufacturing.

In addition, there are also requirements for Wenjie in terms of cost control. The kind of extravagance and waste that existed before can no longer be allowed after the new investors came in.

Wei Lai will also send a director to Wenjie, which can be considered as formally intervening in Wenjie's daily operations. At the very least, it can play a supervisory role, so that Wenjie's management will no longer be as arbitrary as before.

Both Luzhou and investors, including Tencent, were happy to see Wei Lai join the project, with Wei Lai acting as a kind of lubricant.

"I hope so. I look forward to your guidance in the future, Mr. Tan."

A second listing and annual sales exceeding 20,000 units are indeed not that difficult. To be honest, the new investors did not make things too difficult for him. However, he knew that it would not be so simple to make good use of the funds.

Furthermore, Wei Lai's re-entry into the game is different from the first investment; it's a sword hanging over his head. Li Bing understands this, Tan Jincheng understands this, and it's even a decision made jointly by both the old and new investors.

In other words, after the signing, the roles of both parties completely changed. If necessary, Tan Jincheng could even take over the management of Wenjie on behalf of both the old and new investors.

But for Li Bing, at this point he had no choice but to accept it.

As for how to regain control in the future, that's a matter for later.

"Congratulations to Luzhou for acquiring another car company."

"Where."

Luzhou's strategic intentions are very clear. They have not hidden their intention to invest in Wenjie Investment, and are using a total of 70 billion yuan to gamble on wealth and fortune, along with other investors.

Luzhou aspires to become a capital of new energy vehicles. Currently, the scale of the new energy vehicle industry is expected to exceed 100 billion yuan by 2025, with a vehicle production capacity of 1 million units. Weilai is a leading enterprise in the new energy vehicle industry, and Wenjie is one of the leading companies in the new energy sector. The strong combination of the two can drive the development of companies in the industrial chain, including Guoxuan High-tech and JAC.

In addition, Luzhou has also set its sights on another emerging company invested by Weilai, Leapmotor, and even BYD, showing its ambitious intentions.

This is an experiment in venture capital and industry cultivation. For Wenjie, it has obtained funding, policy and industrial chain support, which can help it recover from the brink of death. For Luzhou, there is a potential for high investment returns.

Furthermore, it can successfully build a new energy vehicle industry cluster and perfectly integrate into the Yangtze River Delta automotive industry chain, from which both parties can obtain what they want.

As for the Weilai Group, Tan Jincheng's intention was simple: since they had gotten involved, they wanted to get what they wanted.

Since Luzhou is willing to join, Wenjie is unlikely to go bankrupt in the short term. If it doesn't go bankrupt, there's potential for growth. Wenjie's current market value is only 30 billion US dollars. After the risk of bankruptcy is eliminated, a surge in its stock price is inevitable. The fact that Weilai Group controls 4.99% of its shares is very significant. In fact, both the old and new investors, as well as the management including Li Bing, are well aware of this and have tacitly accepted it.

As the intermediary and coordinator between the new and old investors and the management, they understood Weilai Group's intention not to get too involved, and the 4.99% shareholding was Weilai's attitude.

Once the stock price rebounds significantly, Wei Lai will feel it's time to withdraw and will sell all his shares. This is what Wei Lai deserves, and there's nothing to say about it.

The original investors of Wenjie were led by Tencent, while the new investors were led by Luzhou. Both of them had close relationships with Wei Lai, and Wei Lai was indeed the most suitable coordinator. However, neither side wanted Wei Lai to have too much say.

Tencent is acting based on its own strategy, while Luzhou is thinking about industrial clusters. If Weilai has too much say in Wenjie, then are they investing in Weilai or Wenjie?

"I also want to thank President Tan for his help."

The person in charge of the signing in Luzhou expressed sincere gratitude, saying that taking out billions of yuan is a huge risk for Luzhou at present, but in reality, it's not much.

With the combined resources of the entire province, Luzhou is not so poor that it cannot afford to lose billions. Although the risks are huge, the potential returns are equally tempting.

"Not at all. As people from Anhui Province, this is what my brother Bing and I should do."

Tan Jincheng made polite remarks, but he knew that the other party was not thanking him for the connection, but also for the 4.99% shareholding. This boundary expressed Tan Jincheng's attitude. In fact, this option was also very important.

If Wenjie develops well, it will inevitably be the first to repurchase the options held by Wei Lai, so that Wei Lai can get a full repurchase and bring cash flow from investment returns to the company.

If Wenjie cannot even save this 70 billion yuan, then Wei Lai will be able to quickly intervene, or even take control of Wenjie, kick out Li Bing and the management team, and officially take over the management of Wenjie.

Of course, this was just a tacit understanding between the old and new investors, and it wasn't explicitly stated in the contract. Tan Jincheng would never agree to such a clause being explicitly included in the contract.

What a joke! Battery swapping stations are very expensive. Although Tan Jincheng admires them and has coveted the profits, Wei Lai's focus is on supercharging. Even if there are plans for battery swapping, it will only be a supporting role.

It's impossible for Weilai to shift its focus from supercharging to battery swapping.

"Weilai Technology will be collaborating more with Wenjie this year, and we hope you'll take care of us then, Brother Bing."

"Not at all, we can achieve mutual benefit through cooperation."

Li Bing's smile broadened. In any case, Wenjie had secured a huge sum of money, avoiding the risk of bankruptcy, and had also gained a new partner. He was certainly happy.

Along with the formal signing of the investment agreement, Weilai and Wenjie also signed a strategic cooperation agreement. Jinshidai will upgrade Wenjie's customer level to a higher level, and Horizon Robotics will also assist Wenjie in developing its own chips.

Another subsidiary of Weilai Group, Weilai Technology, will also reach a cooperation agreement with Wenjie. Weilai Technology, which is participating in the bankruptcy reorganization plan of Lifan Motors, has not only acquired Lifan's financing platform in the A-share market, but also taken over all of Lifan's new energy vehicle business.

Lifan's business in the new energy vehicle sector, besides the already unsustainable production of complete vehicles, also includes charging piles and battery swapping stations.

Indeed, Lifan also ventured into the battery swapping station business, which was a good idea. However, given Lifan's size and car sales volume, trying to build battery swapping stations would undoubtedly lead to its demise, which was one of the reasons that accelerated its bankruptcy.

After Wei Lai takes over, he will not give up this business, but he will not invest on a large scale either. Instead, he will choose to cooperate with Wenjie. The investment agreement also includes that the Luzhou Municipal Government will work with Wenjie, Waneng Group and others to promote the construction of 1000 energy storage, charging and battery swapping stations to create a nationwide battery swapping network.

Weilai Technology is also one of the participants.

On the day the cooperation was officially signed, Wenjie's stock price surged 8.08% overnight in the US stock market, closing at $3.61. In the following month, Wenjie's stock price rose by more than 17%, rebounding by more than 43% in two consecutive months.

The rebound in stock price and the increase in sales have allowed Wenjie to gradually emerge from its predicament. However, the situation of new energy vehicle companies is still not very good. Byton, which previously claimed to be the domestic version of Tesla, has been exposed for owing wages.

Furthermore, it was named by CCTV for failing to produce mass-produced vehicles after burning through 84 billion yuan, and is facing the risk of bankruptcy. In addition, companies including Bordrin Motors, Yangtze Motors, Dongfeng Yulon, and Qiantu Motors are also facing operational risks.

The most ridiculous example is Qiantu Motors. This new energy vehicle company's experience stores no longer support car viewing, but instead sell coffee, books and other services in an attempt to continue operating, which is somewhat comical.

With the addition of companies like Yundu Motors and Singulato Motors, which have essentially disappeared, the reshuffling of emerging electric vehicle manufacturers would have accelerated as expected, even without this special event.

"Looking back, we did cause some trouble at the beginning of this year."

Since his appearance in Luzhou at the end of April, Tan Jincheng has made several public appearances after the May Day holiday and also gave his first public interview of the year. When the reporter asked Tan Jincheng and his company about their penchant for making a big splash at the beginning of the year but their lack of activity this year, Tan Jincheng, in a good mood, joked about it.

Entering the second quarter, although car sales have not fully recovered, the overall situation has stabilized. Both Weilai and Yuechi cars had good sales in the first month of the second quarter, with the Yuechi A1 still being the best-selling traditional SUV on the market.

Meanwhile, in Weilai, the ET5, ES3, and L1 have all started to gain momentum. What surprised Tan Jincheng was that the ES6's sales actually rebounded miraculously after the price was reduced in exchange for subsidies.

This is the first model of the Weilai brand. It has been on the market for several years and has even been redesigned once. I didn’t expect it to be so resilient.

To be honest, Tan Jincheng has not really included ES6 sales in his plans anymore, and has even considered whether to stop production this year. The life cycle of new energy vehicles is still a bit shorter than that of fuel vehicles.

For example, the ET9, which didn't sell very well, is already planned to be discontinued.

"Is Mr. Tan referring to the restructuring of Lifan and the investment in Wenjie? If that counts, then he has indeed accomplished quite a bit."

The factors contributing to this include Weilai's industrial layout in the new energy vehicle sector, its rising sales, its efficient resumption of work and production, the surge in sales of two-wheeled electric vehicles since the end of March, and the increase in internet traffic brought about by special events.

Furthermore, Dingding APP, by using online office methods, entered the online education business, successfully breaking into the market from NetEase and capturing a significant market share. All of this brought Tan Jincheng a lot of fame.

Weilai Auto's market share in the new energy vehicle market is being gradually eroded by its competitors, but this young company should not be underestimated.

Even Meizu's secret donation of mobile phones, tablets, and other devices to primary and secondary school students in impoverished areas to help them attend online classes was uncovered by the media.

If we were to evaluate which entrepreneur and their company stood out the most during this special event, Tan Jincheng from the car company would be one of them, and another would be BYD, which inadvertently turned itself into the world's largest mask manufacturer.

These two companies, along with Wuling, have not stopped their own development while supporting the local area.

Wuling launched the Hongguang MINI, which is the classic model that Tan Jincheng knows and is jokingly referred to by netizens as "chopped pepper fish head". Meanwhile, BYD is accelerating its deployment in the pure electric vehicle sector.

The BYD Han is expected to officially enter mass production and be launched in November this year.

On the other hand, Weilai has not released any new models so far this year. However, Weilai has made remarkable breakthroughs in battery technology. In terms of lithium iron phosphate battery technology, Jinshidai has released a new generation of blade batteries.

The NEDC range is available in three versions: 506 km, 550 km, and 605 km. Jinxin New Era has also made technological breakthroughs in ternary lithium batteries.

Jinshidai's new technology eliminates the traditional module structure, directly integrating the cells into the battery pack, which increases volume utilization by 15% to 20%, reduces the number of parts by 40%, and improves production efficiency by 50%.

Furthermore, it can effectively reduce costs. After the release of this technological achievement, it brought a new customer to Jinshidai, namely Hozon New Energy, which is also a new force. Currently, Nezha Auto has signed a battery supply contract with Jinshidai.

In addition, Weilai has also made a breakthrough in production technology, namely the integrated die-casting technology that Tan Jincheng is concerned about. It replaces the original 79 parts with one or two large die-cast parts, reducing the manufacturing time from one or two hours to three or five minutes, reducing costs by 40%, and reducing weight by 30%.

The 6000-ton die-casting machine was provided by LK Technology Ningbo Co., Ltd., a die-casting machine manufacturer headquartered in Hong Kong and based in Beicang for many years. They had already accepted the order from Weilai several years ago to jointly develop a large-scale die-casting machine.

By significantly reducing welding points and improving production efficiency, Weilai is able to take cost reduction and efficiency improvement to a new level, giving it a greater competitive advantage.

The advantages of integrated die casting are significantly improved production efficiency, lightweighting, long-term cost benefits, and design flexibility and space optimization. With integrated die casting technology, although Weilai has not released a new car, a major redesign is inevitable.

However, the disadvantages of integrated die casting are also obvious, namely the high initial investment cost. Not to mention research and development, even a well-known company like Lijin would not dare to easily conduct research and development if it were not for Tan Jincheng's heavy financial support.

The purchase cost of a single heavy-duty die-casting machine is over 100 million yuan, and the mold life is only 80,000 cycles, which is far from the 500,000 cycles life of traditional stamping molds.

For consumers, integrated die casting increases maintenance costs later on. Currently, Weilai, which has mastered this technology, only plans to apply it to mid-to-high-end models. They are hesitant to try it on B-end markets like the Aion series.

The current major overhaul plan is limited to the Weilai brand series.

"Overall, this is a year of hard work for Weilai to hone its internal skills. We definitely have plans for new models, and there may even be significant changes, but overall, the focus will definitely be on accumulating technological expertise."

At the Jinshidai Technology Launch Event, Tan Jincheng, who gave his first public interview this year, revealed a wealth of information to the outside world, including the brand-new battery technology and the major changes that are about to happen.

What will this big change be?
(End of this chapter)