What's wrong with me being a rich man?

Chapter 599 Half push and half give (5K)

The cooperation between silicon carbon and CATL has always been very pleasant, with both sides sharing significant common interests and smooth communication.

Based on this situation, Yu Xing did not make a big fuss. He first showed courtesy, then courtesy, and then courtesy again. This moved the other party and they reached an agreement on in-depth cooperation.

Everyone has their own difficulties, but a standard is a standard. While Ning Wang is still just a young prince, we should take advantage of the situation and give him a little push. There's still a long road ahead.

However, this also means that Silicon Carbon Group will need to increase its R&D efforts and face the risk of sunk costs.

Zeng Yuqun shook hands and made peace, cleverly defusing the storm, but still unwilling to give up, he analyzed the pros and cons for President Yu. He pointed out that if the Silicon Carbon Group were to delve into the research and development of lithium iron phosphate technology in the future, it would face competitive pressure from CATL's ternary lithium, Panasonic's ternary lithium, BYD's ternary lithium, and lithium iron phosphate.

Range extenders may face less pressure, but silicon carbide OEMs will eventually have to focus on pure electric vehicles. No OEM is going to stop after only five or ten years of business; they may find themselves in a dilemma at that point.

Yu Xing put his arm around Zeng Yuqun's shoulder and said with a smile, "Just like how silicon carbide placed its hopes on President Zeng before, we will still place our hopes on President Zeng in the future. If we fail, we will just buy CATL's ternary lithium batteries, and the problem will be solved."

"This, you..." Zeng Yuqun was stunned for a moment, then could only sigh, "President Yu, why bother?"

"Let's join hands and look to the future together. The new energy vehicle market will be worth two to three trillion yuan in the future, and the battery market will exceed one trillion yuan." Yu Xing firmly grasped Zeng Yuqun's hand. "We at Carbon Silicon are willing to help CATL build its reputation in the automotive market!"

This is true; CATL's reputation has been established this year, and its valuation has risen accordingly. However, the context in which this statement is made is not pleasant.

Zeng Yuqun said irritably, "President Yu, then thank you!"

Yu Xing replied politely, "You're welcome, you're welcome."

He also wanted to invite Zeng Yuqun to have a late-night snack, but she was already full and he had to give up.

The following morning, Silicon Carbon and CATL held talks on the specific cooperation of the joint venture, but there were significant differences in their views on the value of battery technology and patents.

CATL is not abandoning lithium iron phosphate batteries; it still supplies batteries to the bus market. It is just more optimistic about the future development of ternary lithium batteries and will be able to mass-produce these products by the end of the year.

As of the end of October 2015, CATL had more than 300 battery-related patents and patent applications. Because patent certification takes time, some of them will gradually take effect later.

In addition, CATL reached a licensing agreement with ATL in December last year for 992 patents, with a contract value of 2.62 million yuan.

The first question on the table was how to assess the value of nearly 1300 patents.

The carbon silicon sector advocates referring to the cooperation between CATL and ATL, believing that these patent licenses are packaged together for a total of 4 million yuan, with a 5-year contract that will be automatically renewed upon expiration.

CATL believes that this plan seriously underestimates the value of the technology it holds, and has set a sky-high price of 30 billion yuan for 5 years.

"Is your entire company, including its business, valued at 30 billion?" Cui Zhiyu, having run into obstacles with internal standards for silicon carbide and his boss's attitude, has now switched to the lithium iron phosphate camp and is very direct in negotiations. "I don't understand, are we talking about patent licensing or acquiring CATL today?"

When the CATL executives saw Cui Zhiyu's statement, they were so angry that they left the room immediately. "Do you think you're President Yu? Why are you talking so rudely?"
However, thanks to the consensus reached between Yu Xing and Zeng Yuqun at the highest level, the two sides sat down together again in the afternoon.

CATL has its reasons. While silicon carbide has some battery technology patents in recent years, they are mainly for vehicle R&D. If CATL wants to delve into lithium iron phosphate in the future, its patents will be crucial and their value will naturally be higher.

Silicon carbon has its own ideas, but the joint venture only obtained a patent license, not patent ownership. What CATL is doing now is just raising prices on the spot.

The two sides still cannot reach an agreement.

On the third day, Yu Xing attended the negotiations and offered a compromise: "Ningde needs funds for development. How about this, we won't license all the patents as a package. We can acquire some and license others, and the price will naturally go up."

Zeng Yuqun completely disagreed with the plan: "President Yu, Ningde does not sell patents, it only licenses them. This is our bottom line."

“Then you’ll have to cut the price yourselves,” Yu Xing said politely. “We’re all here to cooperate sincerely, so we can’t come up with a figure that’s so high that everyone disagrees.”

Not all.

Zeng Yuqun glanced at President Yu across from her, and was about to speak when the other man spoke again.

"The joint venture will still be under the CATL name, which will bring huge benefits to the capital market. We will launch our IPO on the 15th of next month," Yu Xing said. "Moreover, it's not that silicon carbon thinks less of CATL's technology licensing value. On the contrary, CATL is more optimistic about ternary lithium. There's nothing wrong with saying this in front of everyone."

He ignored everyone else and focused on Zeng Yuqun, offering a suggestion: "If CATL insists on raising prices, then the batteries used in Jiuzhou's subsequent projects should follow the joint venture model, and CATL should no longer be used."

Zeng Yuqun shook her head, disliking the suggestion.

The reputation that Carbon Silicon Kyushu has built in the end-user market has brought significant benefits to CATL, which it deserves. CATL does not want to part ways with Carbon Silicon in this regard.

Yu Xing suggested again: "How about this, since there are significant differences in our understanding, let's find someone outside to conduct an evaluation."

Zeng Yuqun shook his head again: "President Yu, are you looking for Today Capital or Red Falcon Capital? The outsiders are all laymen, how can they correctly assess the value?"

Yu Xing laughed and said, "Really? If that's the case, why did Ningde hire a university in Fuzhou last year to evaluate and assess the value of ATL's patents?"

Zeng Yuqun was caught off guard, not expecting that President Yu even knew the details of this matter.

Seeing that his boss was speechless, CATL's vice president Kang An immediately spoke up: "President Yu, that's not how it works. The new energy market is developing so rapidly, and the technology that CATL has been researching in recent years is the most valuable part of our license this time."

Yu Xing smiled enigmatically, picked up his teacup, and said, "Hey."

Upon hearing this sound, Zeng Yuqun recalled their conversation from the previous night and felt a headache coming on.

He even suspected that silicon carbide and Guoxuan High-Tech had reached a certain consensus.

Zeng Yuqun didn't go to sleep until the early hours of yesterday morning. He considered the current situation in Ningde, the impact of carbon and silicon, and also the situation of President Yu. His final conclusion was that such a person is probably not afraid of stirring up trouble.

He sighed and said something that puzzled executives from both Silicon Carbon and CATL: "In the new energy sector, harmony is still paramount."

Yu Xing gave a thumbs up: "President Zeng truly has a strategic vision!"

“CATL is very grateful to Carbon Silicon Kyushu for making the domestic market a success, which is no easy feat.” Zeng Yuqun’s tone softened considerably. “But battery technology and patents are CATL’s lifeblood. In principle, I do not oppose cooperation between the two companies considering various factors. However, Carbon Silicon cannot become a battery supplier.”

CATL is unwilling to cultivate a competitor.

Cui Zhiyu's thoughts raced. Although he personally disagreed with the company's involvement in this field, since they were really going to do it, anything was possible.

He spoke before his boss could, saying, "President Zeng, the Silicon Carbon Group has no plans to supply batteries to external parties. However, you are unwilling to continue investing in lithium iron phosphate, but we will continue to invest in it. It's unreasonable that we can't make our own decisions about the things we develop."

CATL Vice President Kang An retorted, "Without our technology patents, could you continue with the research and development?"

"So, these are two paths. You insist on making ternary lithium batteries. If we don't do well, we can still purchase your batteries in the future," Cui Zhiyu said confidently. "If you don't do well, and we actually make lithium iron phosphate batteries, you can also purchase batteries from the joint venture. That's not a bad backup plan."

Kang An scoffed, refusing to believe the Silicon Carbon Group's erroneous insistence on lithium iron phosphate batteries.

Buses are large and can accommodate more batteries, so the disadvantage of low energy density can be largely ignored. However, passenger cars have limited space, which is an unavoidable drawback.

As the two argued, the meeting room inevitably descended into another debate.

After listening for a while, Yu Xing felt that it was gradually turning into an emotional outburst. He tapped the table with his finger to stop it, saying, "That's enough, that's enough. I think CATL needs to clarify the situation first. Is the technology patent going to be sold or licensed? If it's licensed, is it a permanent license or a five-year license? As for the battery supplier that President Zeng just mentioned, let me state my position first: silicon carbide will absolutely not enter the bus market."

"Secondly, silicon carbide is not interested in becoming a battery supplier for passenger vehicles, but it may consider reducing costs and expanding its scale. It is possible that it will engage in joint procurement with some peers, with the aim of controlling its own costs."

"Finally, if CATL's ternary lithium batteries can't even compete with the joint venture's R&D in lithium iron phosphate in the future, then what right do they have to demand that silicon carbide not be a supplier?"

Yu Xing stood up and said before leaving, "We'll talk again once CATL's plan is clear; there's no rush." ​​The head of the silicon carbon company left, followed by a group of senior executives.

Kang An slammed his hand on the table and roared, "He's really getting out of hand!"

Zeng Yuqun glanced at the vice president and asked, "Why didn't you bang on the table when he was here?"

Kang An honestly replied, "I'm sorry."

Seeing his boss frowning in deep thought, he couldn't help but ask again, "Mr. Zeng, do we really have to cooperate with silicon carbide?"

After a moment of silence, Zeng Yuqun said, "Yes."

He then added, "It's like having another option."

Although I am not optimistic about the future of lithium iron phosphate research and development from a technical perspective, if it is successfully developed, it will at least be better than other competitors in the market.

Thinking about it this way, it's not so unacceptable.

The team from Ningde held internal discussions in Lingang and indeed needed to come up with different cooperation plans in a more systematic way.

Zeng Yuqun, though in Lingang, was not idle. Despite some disagreements, he and General Manager Yu accepted an interview with CCTV.

The two people in the video are very respectful to each other, praising the future of new energy.

Zeng Yuqun emphasized the vast potential of the silicon carbon market: "Our domestic new energy market alone will reach three trillion yuan within five to ten years. However, I actually have even higher expectations for Mr. Yu and silicon carbon, hoping that one day we can go global."

Yu Xing also praised the growth of electric vehicle batteries: "CATL is the benchmark for electric vehicle batteries. Its quality is trustworthy. In the past, it was said that there were three major components for gasoline vehicles. Now, batteries are the most important of the three major components for electric vehicles. CATL will become a global Tier 1 supplier."

The two exchanged a smile, showing no disagreement whatsoever.

The reporter wasn't surprised and asked a question that had been a hot topic online recently: "Mr. Yu, you previously said that there is a consensus on the development of new energy, but many people in the industry have doubts about this. What is your view on this?"

“The questions raised by industry insiders.” Yu Xing extracted the key points and pondered, “The issue of consensus is like the development of the Internet from PC to mobile. Now no one doubts the huge opportunities brought by the mobile Internet. The same applies to new energy.”

"The domestic policy direction for new energy was determined a long time ago."

“In the capital market of previous years, to be precise, from last year to this year, many institutions have increased their investment in new energy projects.”

"Carbon Silicon Kyushu has had a good start in the consumer market this year, and these are all cars that car owners bought with their own money."

"These factors together form a consensus on the future of new energy. Ordinary consumers have their own preferences and choices, but if industry insiders cannot see this point, then there is indeed still room for improvement."

Zeng Yuqun glanced at President Yu but didn't say anything.

After the interview ended, he asked Mr. Yu, "Mr. Yu, there's something wrong with the reporter's question. It was Wei Jianjun from Great Wall who questioned your consensus earlier."

Yu Xing remained unmoved: "Oh, then he still needs to improve."

Zeng Yuqun: "..."

You can't blame the reporters for stirring things up; Mr. Yu deserved to be provoked.

The Ningde team spent another two days in Lingang and finally reached a cooperation agreement with Silicon Carbon Group with great difficulty. The agreement confirmed the value of the technology patent at a price of 8.25 million yuan over 5 years, while restricting Silicon Carbon Group's potential in the bus market.

CATL holds a 49% stake, while Silicon Carbon invested 8.65 million RMB in cash to hold a 51% stake and operate the company.

Based on these core terms, the two parties also agreed on details such as automatic renewal upon expiration and cross-licensing of subsequent R&D technologies of the joint venture, and will discuss supplementary terms when the agreement is formally signed.

Zeng Yuqun reluctantly agreed, but it was a relief for her.

Before leaving Lingang, he asked Mr. Yu one last question in person: "Mr. Yu, do you really believe that lithium iron phosphate technology has a future?"

Yu Xing didn't expect that President Zeng was still dwelling on this. He pointed to the ground and replied, "I have no preference for technology. I just look at the standards. These standards are right here, President Zeng. It is the current situation that is forcing us in the silicon carbide industry to move in this way."

Zeng Yuqun nodded, got into the car, and ended this reluctant cooperative trip.

The cooperation between Silicon Carbon and CATL is very low-key. The current agreement is only a memorandum of understanding. The actual implementation is planned to take place after Silicon Carbon goes public. This way, it will not affect Silicon Carbon's cash flow, nor will it affect CATL's financing plans at the end of the year.

The Lingang authorities were aware of this and welcomed it. With silicon carbon gaining a foothold in the market, investment enthusiasm surrounding new energy has clearly surged, and Lingang's investment promotion policies have been frequently inquired about this year.

Zhu Zehui called Yu Xing to inquire about the establishment of the joint venture and made a small request: to have the carbon silicon side publish an analysis on the development of the new energy industry.

"Director, I've analyzed this far too much on many occasions," Yu Xing said, puzzled.

“President Yu, then take all of those together and work on them systematically,” Zhu Zehui said. “The internal reference team wants to see the true value of your carbon-silicon miracle this year.”

Yu Xing was somewhat surprised, but naturally agreed.

However, he then handed the matter over to the company's writers, asking Cui Zhiyu, Hu Zhengnan, and others to review it before submitting it.

Everyone was exceptionally enthusiastic when they learned the goal of the manuscript, and they gathered together after get off work in the evening to rack their brains and express their views.

Seeing this, Yu Xing felt that the work efficiency of the silicon carbon group could be improved even further, and everyone clearly still had spare capacity.

On November 3, a paper titled "Analysis of the Development Trend of China's New Energy Industry and Suggestions for Future Strategic Layout" was submitted. A quick glance reveals the hard work of the team.

After reviewing it, Yu Xing thought there were no problems, but after changing the name, he requested corresponding supplements—"The Global New Energy Industry Competition Landscape and China's Opportunities and Challenges," and the content naturally needed to include considerations of overseas markets.

Two days later, this analysis from the Silicon Carbon Group was handed over to Lingang and subsequently appeared in internal reference materials.

Yu Xing didn't know what the leaders who reviewed it thought, but he felt that it was quite valuable.

With less than two months left until the end of 2015, the Silicon Carbon Group is about to launch its IPO in the United States, Lingang is about to hold its annual Internet conference, and investment institutions and new energy projects are also coming to inspect the area, making Lingang suddenly bustling with activity.

On November 6, Sohu's "Sword Immortal" game announced its closed beta test, one of the features of which is voice-activated character customization in collaboration with Silicon Carbon Data Company.

This attracted the interest of many players, including Pang Ze.

He really likes Sohu's new game this year, and he's also a closed beta player. He thinks the voice-activated character customization feature is quite innovative.

That evening, Pang Ze was tidying up his room in the study when he found his old, retired cell phone. He suddenly remembered that there were still photos on it, so he tried to charge it and turn it on, wanting to transfer everything to his computer.

When the phone was successfully turned on, Pang Ze browsed the storage and saw a saved voice message. After thinking about it carefully, he remembered that it was a voice message from a former employee of Guoshanfeng that had been widely circulated. It was said to be about an investigation of Fenzhong Media, but the audio in the message was very brief.

Just as Pang Ze was about to delete it, he suddenly remembered Sohu's games and became curious. He wondered what kind of faces could be created if this kind of voice were imported into the game.

Once the idea took hold, he eagerly browsed the release schedule of the new features in "Sword Immortal" and saw the latest display. However, he discovered that many people's faces were completely different.

Pang Ze looked at the phone from left to right, chuckled, lost interest, and tossed it back into the box.

(End of this chapter)