Rebirth 08: Rise from copycat phones

Chapter 447: The wave and chaos of smart electric vehicles
The reason why Weiku Electronics Group's entry into the smart electric vehicle industry has aroused such great vigilance is because of the particularity of the automobile market.

The global automotive market is a market that is very different from the smart terminal market in all aspects.

Let’s not talk about geographical factors for now, and just talk about the market situation of the product itself... In the smart terminal industry, due to product price restrictions, even high-end mobile phones such as the Zhiyun S series are only a few thousand yuan, and at most a little over ten thousand yuan.

Therefore, in the smart terminal market with smartphones as the core, a very special situation has emerged, that is, high-end products occupy a considerable market share and account for most of the sales and profits.

Then, the sales volume of mid-range products is generally low.

Finally, there are low-end products, which have very large sales volumes, but are indeed relatively low in total sales, and the total profits are even lower.

It is often said that more than half of the profits in the smartphone market are taken by Zhiyun, and a small half is taken by Fruit. These two companies alone have taken more than 90% of the profits in the mobile phone market.

The remaining group of manufacturers are scrambling to grab some leftovers.

This is a very special market with two large sales volumes and a small middle; at the same time, sales and profits are highly inclined towards the high-end market.

Therefore, even though Wecoo Electronics is the world's fourth largest smart terminal manufacturer and the third largest mobile phone sales company in the world, it has not attracted much attention or vigilance. The foreign high-tech industry is more focused on Zhiyun Group and only regards Wecoo Electronics as Zhiyun Group's younger brother, or even a subsidiary company.

But that’s not the case in the automotive industry!

Due to the high unit prices in the automobile industry, even the cheapest, lowest-end cars cost tens of thousands of yuan, with most models costing more than 100,000 or 200,000 yuan. Therefore, the automobile market is a very typical, traditional pyramid-structured product category.

The most popular cars are mid- and low-end cars, and the higher the price, the lower the sales volume.

This has little to do with the performance or even quality of the product itself, it’s mainly because of the price issue… People know that mid- to high-end cars are better, but they can’t afford them.

This has also led to the fact that most of the product sales and profit sources of the world's major traditional automobile giants rely on the mid- and low-end markets. For example, in the domestic market, the best-selling products are those priced just over 100,000 yuan.

As for the overseas market, although the prices are higher, the sales volume of mid- and low-end products is generally the largest...

If the smart electric car launched by Weiku Electronics is priced at more than 100,000 or 200,000 yuan, it may bring a huge market impact!

For many foreign automobile manufacturers, the threat posed by Weiku Electronics' smart electric vehicles is even greater than that of Hailan Automobile!

Even though HaiLian Automobile has been on the rise for many years, its total sales volume even reached over one million in 17.

But in fact, it did not cause any serious damage to the major traditional automobile giants!

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In the domestic market, the cheapest model among Hailan cars, the Hailan LSMC, still costs a little over 300,000 yuan after subsidies. It seems to sell a lot, but it is still not mainstream. Its competitors are instead luxury models among various gasoline cars.

In foreign countries, the price of Hailan cars is even more expensive. Take Europe as an example. The cheapest entry-level version of the purely imported Hailan SLMC costs more than 500,000 yuan due to tariffs, local operating costs and other geographical factors. The Hailan MEV is even more expensive, with a starting price of more than 600,000 yuan.

The two models, Hailan SEC and Hailan SEV, cost more than one million yuan.

This price actually doesn't have much competitive advantage locally. It's a serious luxury car and it would be painful for Europeans to buy it.

The reason why HaiLan Automobile has high sales volume is mainly due to its reliance on the domestic market. In addition, relying on Zhiyun Group's overseas channels, it has also entered many overseas markets. This country buys a little, and that country buys a little. The accumulation of small amounts has led to a relatively high total sales volume.

But when it comes to each country, including China, the market share is actually very low.

Hailan Automobile is a luxury car brand, so even though its sales have exceeded one million and caused a huge impact in the automotive industry, the major auto giants still think: I also want to develop smart electric vehicles...

Rather than just suppressing and being vigilant... Of course, this is also related to the fact that they feel they can do it too: your China HaiLan Automobile and other Chinese automobile manufacturers can develop smart electric vehicles, so we can do it too.

To put it bluntly, they still have the confidence to compete.

At the same time, it is also because in the past few years, and even now, China’s automobile market is still a very large market, and it is a very important market for these traditional automobile manufacturers... If you do anything to Hailan Automobile, be careful that Xu Shenxue will get angry!
In the eyes of many foreign financial groups, Xu Shenxue is also a very stingy person who will take revenge on the spot... Generally speaking, unless there are special interests, they are unwilling to provoke that madman Xu Shenxue.

When the United States imposed tariffs before, Xu Shenxue retaliated by banning the sale of the latest generation of in-vehicle computing chips to American automakers, and then turned around and increased supply to Japanese, German and even Korean automakers... Japanese and German automakers smiled and took over a large number of in-vehicle computing chips, and launched a series of traditional gasoline or hybrid models with good assisted driving functions in the US market.

At the same time, GM and Ford's models in China are unable to upgrade due to the lack of the latest computing chips, and have been surpassed by other manufacturers in the field of assisted driving.

After much trouble, General Motors and Ford found that their market share had dropped again... not only in China, but also in the US market.

In addition, in the field of power batteries, it also refused to supply semi-solid batteries to GM and Ford, and only sold traditional liquid batteries. It's up to you to choose...

Tesla is an exception. The two parties are still in a relatively delicate state of cooperation, but it is hard to say how long this cooperation can last... It depends on whether the cars produced by Hailan Automobile's factory in Mexico next year can successfully enter the US market.

If it doesn't work out by then, then the cooperation between Hailan Automobile and Tesla can basically be declared broken!
Tesla's current factory in China will be able to continue production, but it will only be used for export, and there is no hope of selling in China.

Everyone came to try and get nothing, each lost a huge amount of investment, and everyone went back home to find their own mother!
Xu Shenxue is very strong in this regard... You let me in, and I let you in, and then everyone competes based on their own abilities.

If you don't let me in, I'll keep you out!

This is true in the field of smart terminals and also in the field of smart electric vehicles!
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HaiLian Automobile has entered the high-end field, which major automobile manufacturers can still tolerate.

But now Vico Electronics is entering the field of smart electric vehicles, which is different... People all over the world, even Africans know that Vico Electronics' mobile phones are mainly mid-to-low-end brands. Even Vico Electronics' Little Blue MAX series of mobile phones are sold at a very high price and have good sales.

But it still cannot change people's perception of the two brands of Xiaolan and Weiku as low-end...

In fact, this is indeed the case. All kinds of smart terminal products under Weiku Electronics are mainly mid-to-low-end.

The brand positioning is not so easy to change, and it is even more difficult to impact the high-end market... When consumers see your brand, they think you are a mid- to low-end product, and consumers with good purchasing power will not even look at Weiku Electronics' products.

But... at this time, Weiku Electronics came out and said that it wanted to develop smart electric vehicles, and revealed to the public that it wanted to create smart electric vehicles that ordinary people could afford.

Combined with Weiku Electronics' strong supply chain integration capabilities, cost control capabilities, cost-effectiveness and other factors... many people started drooling.

Anyone who buys the blue phone for 4,000 yuan is a fool.

However, if it is a Blue Smart electric car priced at around 100,000 or 200,000 yuan, and the price-performance ratio is better and the appearance design is better, many people will be tempted. At the same time, it has also aroused the vigilance of a large number of traditional car manufacturers!
No matter what, Xiaolan is also a world-renowned brand. Even if it previously produced mid- and low-end smart terminal products, it is still a world-class brand manufacturer.

The products produced by this kind of manufacturers are much more reliable than those of a large number of so-called new car-making forces.

No matter what, WeCool Electronics Group is the third largest listed company in China by market value and one of the core companies under Xu Shenxue. At least you don't have to worry about it going bankrupt or running away, or various basic problems such as after-sales and quality.

Big enterprises are definitely more reliable than those small workshops!

Furthermore, as Weiku Electronics is a company that deals with smart terminals and electric vehicles in the high-tech field, its design concept and business philosophy are actually very different from those of traditional automobile manufacturers. Weiku Electronics also released some design concept drawings at the press conference, which look sci-fi and fashionable.

This has attracted more people's curiosity and aroused the vigilance and even concern of peers.

A few days later, Bai Qiwen, CEO of Weiku Electronics Group, accepted an exclusive interview with a media outlet, discussing many things. He also answered questions that many ordinary consumers, even many investors and automotive peers in China are extremely concerned about: the smart electric vehicle business.

"In recent days, many friends have been paying attention to our smart electric vehicle plan, especially the price issue. In this regard, I would like to say that please rest assured that our aim at Weiku Electronics has always been to make our products affordable for most people, and smart electric vehicles will be no exception!"

"When will it be launched? This still requires time. Although we are standing on the shoulders of our predecessors, the design and development of a smart electric car takes time. From subsystem design and development to vehicle design and testing, we need to do it step by step, and we must do our best at every step."

"Because we not only want to build cars that everyone can afford, but also cars that are safe to drive!"

"In addition, I can reveal in advance that the power battery system of our new car will use the most advanced and safest semi-solid-state battery, which will not only greatly improve the battery life, but more importantly, it will be safer than the existing lithium batteries!"

The few pieces of information Bai Qiwen revealed during the interview quickly attracted people's attention.

The traditional automobile industry is paying close attention and looking at Weiku Electronics' actions with worried eyes!
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Coincidentally, when Weiku Electronics was developing cars, Bai Qiwen revealed information in an exclusive interview.

Other large domestic companies have also begun to develop smart electric vehicles.

Several Internet companies want to develop electronic control systems and intelligent assisted driving technology, and then find traditional automobile manufacturers to cooperate in making cars... After all, they are more proficient in the software part, but to be honest, they are not so good at the hardware part, and the cross-industry problem is too serious.

Although many people are saying that today’s smart electric vehicles are just smartphones with wheels installed, the problem is that smartphones are not easy to use!

Therefore, these Internet companies are engaged in the intelligent assisted driving part and are not involved in the manufacturing of complete vehicles.

On the contrary, DaMi directly announced that it would engage in vehicle manufacturing and launch DaMi-branded smart electric vehicles. They are all engaged in low-end and mid-range smart terminals, and are all design and assembly companies that rely on Zhiyun to survive... It doesn't make sense that Weiku Electronics can do it, but DaMi can't?

So they responded quickly and launched the smart electric vehicle plan, claiming to create a pure electric car with national prices and top performance!
Of course, having said that, they are actually very cautious... and they didn't start spending money like some so-called new car companies.

Because the investment in the smart electric vehicle industry these days is very huge, especially the new car manufacturers, who are spending money more fiercely than each other. People who don’t know would think that they are richer than HaiLian Automobile and Zhiyun Group.

The high cost is unacceptable to DaMi. After all, the brand value is there, and they can't make a car that is too expensive and can't be sold...

The reason why they decided to follow suit was mainly because they saw that Weiku Electronics was also doing it, and it seemed that the investment was not very large... If it weren't for Weiku Electronics paving the way, they would not try to develop smart electric vehicles now.

The problem is, Weiku Electronics really did it!

Then the question arises, if Weiku Electronics can do it, why can't we at Rice?

As for the high cost, we will take it slow and feel our way through with Weiku Electronics to see if it really takes hundreds of billions or even tens of billions to develop smart electric vehicles.

You can’t blame Dami’s management for being cautious…it’s mainly because the new domestic car manufacturers have performed too frighteningly in recent years, and have been promoting various high costs everywhere.

They have invested billions of dollars at every turn, but still haven’t produced any usable car models, and each one is losing more than the other.

Among the smart electric vehicles currently sold in the market, apart from the undisputed leader, Hailan Automobile, only BYD and BAIC have relatively good sales. The remaining models that sell well are also domestically produced independent brand electric vehicles that have transformed from traditional automobile manufacturers.

This is a rather contradictory point in the current field of new energy vehicles...a point that even confuses the management of Rice.

At first glance, the investment in the new energy vehicle industry seems to be very high, but it seems that Weiku Electronics did not really spend much money.

The biggest expense was the acquisition of a small car company, but it only cost more than 1 billion yuan. Even if there are expenses for modification and upgrading of the factory and opening up the supply chain, the investment in the entire production chain is estimated to be no more than 10 billion yuan.

Adding the R&D, advertising, marketing and store establishment costs, it is estimated to be more than 10 billion.

The design, R&D, marketing and production areas combined are estimated to be around 30 to 40 billion.

The planned investment amount announced in the financial report of WeCool Electronics Group is also 30 billion.

On one hand, Weiku Electronics said that 30 billion would be enough, while on the other hand, other new car-making forces said that even 30 to 50 billion would not be enough!
This is contradictory!

How much does it cost to build a smart electric car?

The rice side is a cross-industry business and they have no idea what is going on, so they are being very cautious!
Another issue that makes them cautious is the qualifications for making cars.

The qualification to manufacture and sell passenger cars is not easy to obtain.

Not all car companies are like HaiLan Automobile, which can obtain special licenses to manufacture and sell cars.

Other car companies, even Weiku Electronics, have to follow the rules, which is not easy.

In order to solve the problem of car manufacturing qualifications, Weiku Electronics initially chose to cooperate with Hailan Automobile, but Hailan Automobile’s own production capacity was insufficient, so there was no extra to give to them.

At the same time, the management of HaiLan Automobile is also worried that the cooperation will lower its brand value.

In addition, in the view of Hailan Automobile’s management, Weiku Electronics’ car manufacturing is actually a challenge and threat... and it is a not small threat.

Although both companies belong to the enterprise under the boss Xu Shenxue, the two companies still have their own interests.

Management and technical personnel receive salaries and a large number of stock options from their respective companies. The company's operating performance directly affects their income.

The big boss Xu Shenxue wants to push Vico Electronics to produce mid- and low-end electric vehicles, and also wants Hailan Automobile to license some key patents and technologies to Vico Electronics for a fee, but this is already the limit.

If there are more, the management of Hailan Automobile will hang themselves in front of Xu Shen's house...

You, Boss Xu, can support Weiku Electronics, but you cannot support it at the expense of the interests of more than 100,000 employees of Hailan Automobile.

Xu Shenxue was also very clear about this. With more companies under his control, it was inevitable that he would encounter such things. Factionalism began to emerge among the companies, and each company acted for its own interests.

Many times, Xu Shenxue also needs to comprehensively consider the situations of various companies under his control, and he cannot force a match.

In this case, Weiku Electronics' plan to reach a cooperation with Hailan Automobile failed, but it doesn't matter. Although there are few domestic car companies that have the qualifications to build cars but are not doing well in business, they still exist.

Weiku Electronics soon found a domestic automobile manufacturer whose business performance was not optimistic but had passenger car qualifications to acquire it directly.

As for independent application, Weiku Electronics gave up this path from the beginning!
It has always been difficult to apply for qualifications to build cars, not to mention in the early stages, it was difficult to apply for for a long time.

The period of slightly relaxation was after the establishment of Hailan Automobile. In order to support the new energy vehicle industry, the qualifications for new energy were once relaxed, but it was still very difficult to apply.

Many of the new car manufacturers in China today do not apply for car manufacturing and sales qualifications independently, but instead obtain them through affiliation or acquisition…but not many actually obtain them, only a few are strong.

At first, Weiku Electronics wanted to save some money and found Hailan Automobile to be affiliated with it, but when the plan did not work, it simply spent about 1.5 billion to acquire a small qualified car company.

It's funny to say that this small car company has been on the verge of bankruptcy. It has nothing but the qualification to build cars...but even so, it still sold for 1.5 billion.

It cost Weiku Electronics 1.5 billion yuan just to solve the problem of car manufacturing qualifications... This situation also shows that the entry threshold of the new energy vehicle industry is rapidly increasing!
Whether it is acquisition or affiliation, it is very difficult.

It is no longer the case four or five years ago when you could just take a PPT, make a mess of so-called new energy vehicles, and then sell them through the affiliation method and defraud subsidies.

If you don’t have strong capabilities and sufficient funds now, let alone applying for qualifications independently or acquiring qualified manufacturers, even if you want to be affiliated with them, you won’t be approved!

Of course, these so-called difficulties are not a big problem for a company like WeCool Electronics!

In fact, with the strength of Weiku Electronics, there would not be any big problems even if it applied for car manufacturing qualifications independently. It just needs to wait for a while and make all the preparations.

In order to avoid further complications, Weiku Electronics took a more convenient and quicker approach and directly acquired a small car company to solve this problem.

After obtaining the qualification to manufacture cars, Weiku Electronics stopped production and carried out a major upgrade and renovation on the acquired factory... The original car factory was said to have an annual production capacity of 300,000, but in fact it was very backward and could not produce modern top-level electric cars at all. The entire factory needed to be upgraded and renovated.

Only a factory that has been transformed in this way can truly produce smart electric vehicles!
At the same time, they are also preparing to build a second smart electric vehicle factory... Given the size of Weiku Electronics, it is impossible for them to be satisfied with producing and selling only 300,000 vehicles. Their goals and ambitions are quite big. In the future, they will definitely aim for an annual production and sales volume of 500,000 or even one million vehicles.

Therefore, it is necessary to make early investment arrangements.

A series of actions taken by Vico Electronics have also continued to push Vico Electronics' stock price to continue to rise... Investors are still optimistic about Vico Electronics' entry into the smart electric vehicle industry.

For other emerging car companies or traditional car companies, developing smart electric vehicles is fraught with difficulties and the investment is extremely huge.

However, many things that are very difficult for other car companies are not a problem for Weiku Electronics.

For example, the qualification issue that has troubled countless new car manufacturers, Weiku Electronics directly spent money to acquire them... Of course, this does not mean that other new car manufacturers do not have the money to acquire them, but that others will not sell to them!
Local areas that have the qualifications to build cars are hoping to use this qualification to revitalize the local car-making industry. They want to bring in strong players rather than speculators who follow the trend.

So it’s not that any new manufacturer can acquire a car company that has the qualifications to build cars, and they will sell it to you.

But WeCool Electronics did not have this concern... In fact, WeCool Electronics had several options at the time. Three places all invited WeCool Electronics to invest, and the qualifications for car manufacturing were prepared for you. You just need to come and spend money to acquire it.

Their requirements are simple and unified, which is to rely on giant companies like Weiku Electronics to drive and revitalize the local automotive industry chain.

After comprehensive consideration, Weiku Electronics chose one of them.

Similarly, for other emerging car companies, electronic control is difficult, especially intelligent assisted driving. They have to develop it themselves or use the popular EYEQ platform. However, Weiku Electronics does have the technical support of Zhiyun Group and directly obtains the artificial intelligence algorithm for assisted driving. It can then rely on this algorithm for adaptation.

As for branding, advertising and marketing, Weiku Electronics is also at the top level!
After all, they are the fourth largest smart terminal manufacturer in the world and have a very strong brand!

And its advertising and marketing capabilities are also top-notch, with all kinds of hard advertising or soft promotions being very successful... Weiku Electronics invests more than 30 billion yuan in advertising and marketing every year.

The money that WeCool Electronics earns from advertising alone in a year is higher than the total revenue of most of the companies listed in China!

In terms of qualifications, capital, technology and other fields, Weiku Electronics has huge advantages.

All these make investors look favorably upon Vico Electronics, and also make many consumers look forward to Vico Electronics' electric vehicles.

At the same time, it also makes a large number of automobile manufacturers wary of the entry of Weiku Electronics!
Amid the chaos in the field of smart electric vehicles, the fields of smart terminals and smart robots have ushered in a new wave!
At the end of December, Zhiyun Group officially held a winter new product launch conference, preparing to release a variety of blockbuster products, including a new generation of smart robots and AI glasses and other new products that are enough to cause a huge sensation!
(End of this chapter)