What's wrong with me being a rich man?

Chapter 684 Swap (4k)

CATL is an excellent battery company.

There is no doubt about that.

Since the establishment of Silicon Carbon Group, the two parties have had a very pleasant cooperation. Although there were disagreements on the selection later, Silicon Carbon Kyushu successfully helped CATL make a name for itself, and CATL also provided Silicon Carbon with batteries that met its needs and fully guaranteed the supply of production capacity.

The three core components of new energy vehicles are completely different from those of gasoline vehicles. CATL manufactures batteries and uses silicon carbide batteries. The former produces batteries with better performance, and the latter launches cars with longer range. This kind of cooperation seems to have no problems.

Within the silicon carbon group, this mindset is habitually continued in both vehicle design and battery research and development.

The development of pure electric vehicles based on silicon carbon technology has been put on the agenda. As this work progresses, battery range has once again become a primary issue, and the advantages of ternary lithium batteries have been discussed again.

Silicon Carbon has its own battery laboratory and has even established a joint venture with CATL, but its approach has not deviated from the scope of CATL's technology.

This wasn't the first time Yu Xing had attended a technical conference as an observer, and he often pondered the pure electric vehicle models made of silicon carbide. However, his vague ideas never quite grasped the key points. On this particular day, as he watched Wu Kai and others from CATL talking eloquently in the conference room, he didn't notice the advantages of ternary lithium technology that he had heard about repeatedly, but rather the way the two companies were positioned on the left and right sides of the conference room.

CATL and silicon carbide are two different companies.

Do a battery company and a car company really have completely identical needs?

Yu Xing's questions to Zeng Yuqun and Wu Kai went unanswered for a long time.

However, their silence and contemplation seem to be the best answer.

CATL is currently developing CTP technology, which replaces the small modules in traditional battery packs with large modules. So, is the large module size it is going to make the most suitable module for carbon silicon vehicle models?
Or is CATL using a moderately large CTP module in order to sell its CTP technology to more car companies?
If we broaden our thinking, CATL is now promoting its technology from small modules to large modules. For silicon carbide, is it still possible to make a "module-free" product?
Or, to summarize it in a more internet-centric way, is CATL's CTP technology "demodularizing"?
Standing at the technological frontier, Yu Xing determined CATL's approach and then considered and refined it from the perspective of silicon carbon, proposing a topic for the silicon carbon battery laboratory to hold a meeting and discuss immediately.

That afternoon, the Silicon Carbon Group held an internal meeting, while Zeng Yuqun and Wu Kai in Ningde started an external meeting. The atmosphere on both sides was very tense.

"Old Wu, do you think the direction that President Yu mentioned is feasible?" Zeng Yuqun asked Wu Kai, who had already given it some thought, after discussing the situation of large modules for a while.

Wu Kai is the helmsman of CATL's battery technology. The success of lithium iron phosphate batteries in the past was inseparable from him, and the advancement of ternary lithium batteries is even more inseparable from him now.

After being questioned by President Yu at noon, he fell into deep thought.

When faced with Zeng Yuqun's words again, Wu Kai gave a cautious but indicative answer: "I think it has potential."

Zeng Yuqun couldn't help but sigh: "This..."

If it's theoretically feasible, it would mean that the two companies, which were already drifting apart, would further shrink their cooperation space.

Wu Kai added, "But that means silicon carbide needs to do more work, and their original ideas have to be overturned and started from scratch."

CATL envisions a CTP as a universal design that can be customized for major clients like Silicon Carbon, but it is certainly not as in-depth as Silicon Carbon's own customization. This means that Silicon Carbon may need to put in a lot more effort in areas such as structure, vehicle integration, and material systems.

Will the final result be better than using CATL's CTP technology?

Wu Kai thought it was unlikely.

Or perhaps they each have their own merits.

“Silicon carbide is currently dominating the market with its range-extending technology, and the domestic market doesn't have a large number of public charging stations at this stage. I'm afraid Mr. Yu and his team aren't afraid to start from scratch,” Zeng Yuqun said objectively. “They still have time…”

He looked up and sighed, "This is fucking terrible!"

Zeng Yuqun shook his head repeatedly, even thinking of President Yu's other identity: "Yu Xing, this big short seller, is practically shorting the module..."

CATL has naturally had internal discussions regarding the current research and development of CTP and its future prospects. If silicon carbon technology is to drive the integration and deep customization of vehicles, it will likely move towards simplifying or eliminating modules.

Lithium iron phosphate prices have risen in the past two years, but once the price increase cycle is over and silicon carbide ...

Zeng Yuqun thought about many things and felt a dull ache in her head.

"President Yu is indeed President Yu; his mind is still very sharp." Wu Kai gave a sincere compliment. "If silicon carbide insists on sticking to lithium iron phosphate, this may indeed be a direction that can achieve results at this stage."

Compared to Zeng Yuqun, he was mainly responsible for technology. He led the team that produced CATL's lithium iron phosphate. He didn't think much about subsequent market competition. No matter what about silicon carbide, CATL would still have a share in that joint venture.

Zeng Yuqun felt even more helpless.

All he could say was, "This could be a very big deal."

If silicon carbide can maintain its position in the automotive industry using lithium iron phosphate, will its technological success in this area lead to direct competition with CATL in order to reduce costs?

Zeng Yuqun couldn't get an answer to this question right away, but she didn't think the big short seller would be someone with any concerns.

In the small internal meeting of the silicon-carbon battery laboratory, Yu Xing was still just an observer.

However, this time he was frequently asked to explain his thinking.

Feeling their surprised and admiring gazes, Yu Xing felt a little embarrassed.

The answer from the urgent internal discussion is very promising.

Once the window paper is pierced, looking back, it seems like nothing really happened.

It's about making our own batteries, doing our own integration, and making every effort to leverage the advantages of technology integration. It's just that people's previous mindset was too rigid, and there was also the influence of battery authorities like CATL.

As Yu Xing listened to the increasingly heated discussion, he pondered to himself, and thinking about BYD's future success, he felt that it was very likely to follow a similar path.

Vertical integration, in essence, involves integrating upstream and downstream operations with the company at its core, ultimately aiming to improve the product.

This effect is not only about reducing costs, but also about redefining products around core technologies.

Yu Xing became more and more confident. There was no reason why BYD could do it and other companies couldn't. This general direction should be correct.

and so……

That evening, he turned down the dinner invitation from Silicon Carbon Data and focused his attention on making a phone call to Gao Huan, the deputy chief technology officer at CATL, describing his and Silicon Carbon's internal thoughts on CTP technology. Gao Huan was a key technical member at CATL and a valuable assistant to Wu Kai in his work.

He didn't come to Hong Kong this time, and he was quite puzzled to receive a call from Mr. Yu of Carbon Silicon, but since it was about battery technology and ideas, it didn't seem like a big deal.

After listening to General Manager Yu's presentation, Gao Huan thought that Lingang's thinking on CTP research and development and adaptation was commendable.

“If we were only developing a car model based on silicon carbide, we could definitely change the cell design. The CTP we are doing now has a very important value in that it does not change the cell design, so that we will not increase the adaptation costs for car companies.”

"This is more of a structural innovation."

"Can the battery cells be changed? Of course they can be changed. If they couldn't be changed, there wouldn't be CATL today."

"However, Mr. Yu, this will definitely have its drawbacks. If we use a deeply customized battery pack, if we use a large module, or if we use a module-less design like you've been discussing, then the maintenance costs may be higher."

"If we don't consider these factors, I think it's possible to integrate the battery pack into the design of a single vehicle model, or even integrate it into the vehicle body. This would not only improve the space utilization of the battery pack, but also optimize the overall vehicle's space, handling, and safety."

The clash of different ideas is the easiest way to spark inspiration.

Gao Huan spoke quite quickly, and even disregarded the general applicability of silicon-carbon technology, he expressed his appreciation for the idea.

“Mr. Gao, what you said makes me feel that our design is more feasible.” Yu Xing took the opportunity to extend an invitation, “Mr. Gao, would you consider coming to Lingang? I know you have been in charge of a lot of lithium iron phosphate work in Ningde. We are now basically determined to follow this direction, but breakthroughs and innovations require more solid technological investment.”

The implementation of logical transformation requires R&D investment, and that investment must be channeled into talent.

A joint venture factory is under construction in Lingang, and a team from Ningde has been sent here to cooperate, so they are naturally very familiar with the internal situation of Ningde.

The question was asked in the morning, the small meeting was held in the afternoon, and the recruitment was carried out in the evening.

Gao Huan was caught off guard by President Yu's invitation and asked in surprise, "President Yu, what do you mean?"

“What I mean is that CATL’s main focus is on ternary lithium batteries right now, but we believe that lithium iron phosphate batteries still have a lot of room for development. Even for battery manufacturers, its market potential is relatively low, but for our silicon carbon group, it still has great value,” Yu Xing said earnestly. “So, Mr. Gao, the stage in Lingang is also very large.”

CATL's internal R&D coordinates both ternary lithium and lithium iron phosphate routes, and involves the entire chain of R&D, including materials, cells and systems. However, different people may have different focuses.

Gao Huan was silent for a moment on the phone before politely declining, saying, "President Yu, I'm very happy in Ningde. I admire the Silicon Carbon Group's efforts in developing our market, but I haven't finished my work here yet, and..."

He felt this was wrong; it seemed like President Yu was trying to poach President Zeng's man.

To put it another way, Silicon Carbon Group is already listed on the stock exchange, while CATL is not yet listed.

Whether car manufacturers or battery manufacturers will have a higher market capitalization is uncertain in the future, since batteries account for a large proportion of the cost of electric vehicles.

Gao Huan had heard General Manager Zeng use the analogy of gold and a shovel: as long as the new energy market continues to develop, battery sales will continue to grow, and the latter will grow as fast as the former.

Silicon carbon may not be able to dominate the majority of the new energy market, but CATL may be able to deploy its batteries to every OEM.

“Mr. Gao, it’s like this.” Yu Xing wouldn’t give up just because of one rejection. “Our plan for the battery joint venture in Lingang is to make it operate independently in the future. Currently, it prioritizes providing production capacity for silicon carbide, but as long as the battery technology is successfully developed, it won’t always be a subsidiary of silicon carbide. It can also strive for listing in the future. If you are willing to come, you will basically be in charge of this research and development direction.”

Gao Huan hesitated for a moment and said, "President Yu, I have something to say about Lin..."

Yu Xing interrupted, "President Gao, you can't surpass President Wu Kai in Ningde, but you can go to Lingang to work on carbon silicon high-performance products."

Gao Huan remained silent.

Wu Kai's position in Ningde is almost unshakeable. Precisely because of this, he admires President Wu's ability and achievements and naturally aspires to be on par with him.

Yu Xing didn't expect an immediate answer: "President Gao, please reconsider. We will continue to support lithium iron phosphate, and we especially hope that your talent in this area can be given greater play."

Gao Huan hesitated for a moment before hearing the phone call end.

He could hardly deny that he had indeed begun to waver.

Moreover, Mr. Yu has a very good reputation for treating company employees well.

The next day, Gao Huan, who was feeling somewhat uneasy, suddenly received a request to participate in an online meeting, which was chaired by General Manager Zeng.

He was surprised to find that President Zeng was actually discussing the feasibility of CATL manufacturing cars in the future.

Gao Huan felt as if the world had suddenly become chaotic. CATL was going to build cars, and silicon carbide was going to make batteries?
Everything was going well until we went to the conference there and suddenly we had to switch identities?
“If silicon carbide sets up a joint venture in Lingang and uses our patents, we can see how they manufacture cars,” Wu Kai said cheerfully. “If President Yu can do it, why can’t we?”

He added, "At this stage, I think it's not appropriate. According to Mr. Yu, the supply chain will mature further, and perhaps that will be the right time for us to consider it. We should fully respect Mr. Yu's views on car manufacturing."

Zeng Yuqun joked, "Then I'll have to take a good look at how carbon silicon makes cars in Lingang. I think Cui Zhiyu from carbon silicon is quite good. I'll talk to him more later, and maybe we can invite him over to help us build cars in the future."

The online meeting was filled with laughter.

Gao Huan laughed along; everyone seemed to be in the same boat.

He still hadn't made up his mind and planned to think about it carefully.

However, in the evening, Gao Huan received another call from General Manager Yu, this time to convene an online meeting on silicon carbide batteries.

Gao Huan refused, saying, "President Yu, that's not appropriate. What would I do in your meeting?"

"It's not our official meeting, it's just an informal chat about the compatibility and development of lithium iron phosphate in CTP technology," Yu Xing said enthusiastically. "Mr. Gao, you are an expert in this field, and we all want to hear your thoughts."

Feeling the sincerity in President Yu's voice on the phone, Gao Huan couldn't refuse outright, so he agreed.

Before hanging up, he said, "Mr. Yu, this is the last time."

Yu Xing repeatedly said, "Yes, yes, I was rash this time, Mr. Gao. I will tell Mr. Zeng next time."

(End of this chapter)