What's wrong with me being a rich man?

Chapter 685 Technology (4k)

Silicon Carbon Group seems to have found a battery technology direction that is more suitable for its own development.

Since the energy density of lithium iron phosphate batteries is difficult to improve in the short term, the solution is to improve the structure of the entire battery pack and integrate it more deeply with the vehicle. In theory, this could effectively enhance cruising capability.

CATL's CTP technology, which is currently under development, has not yet been implemented, but its research direction has proven that improving the volume utilization rate of the battery pack can improve the system energy density.

The discussion was internally about silicon carbide, and they also brought in key personnel from CATL for further discussion. They also sought opinions from technical coordinators like Wu Kai. Furthermore, Yu Xing didn't forget to directly communicate with Wang Chuanfu from BYD to explore the feasibility of lithium iron phosphate being used in vehicles.

Wang Chuanfu had come to Hong Kong to attend the Silicon Carbon Technology Day, but after witnessing the industry alliance and system open source on the first day, he hurriedly returned to Shenzhen to handle his work. Unexpectedly, President Yu called to talk about battery technology.

As for this technological direction...

He was even more surprised.

“Mr. Yu, to be honest, we initiated a similar research project at the beginning of the year,” Wang Chuanfu said. “The utilization rate of traditional battery packs can definitely be improved. We are considering developing long, strip-shaped battery cells, which is also a way to solve the energy density problem through structural innovation.”

Whether it's silicon carbide or BYD, as long as lithium iron phosphate is used, it will inevitably face the problem that its energy density is not as good as ternary lithium. As for excellent safety, there are two choices: one is to continue to stick to the former, and the other is to improve the safety performance of the latter.

Similarly, since the energy density of lithium iron phosphate cannot be improved in a short period of time, structural innovation is the only way forward.

Wang Chuanfu pondered for a moment, then said, "It's not so surprising that CATL is making large modules, but we are considering arranging the cells directly in the battery pack and eliminating the modules altogether. We are trying to see if this will work."

Having already gained experience through reflection and observation, Yu Xing offered a concise summary: "Mr. Wang, the key is to do module-free integration, CTP, CTP, from T to P."

CATL's so-called CTP technology stands for Cell To Pack, where Cell refers to the battery cell and Pack refers to the battery pack.

Wang Chuanfu laughed and said, "Yes, CTP is actually similar to CATL, but CATL sells batteries, while we sell cars. If CTP can be implemented, the future will be CTB."

CTB, where B stands for Body, means the battery cells are integrated into the vehicle body.

Yu Xing said with admiration, "It's thanks to Mr. Wang and your team that we've done such thorough research. It took me these past few days of discussions to consider the differences in demand between our car companies and CATL. This direction is indeed worth investing heavily in."

Wang Chuanfu felt that President Yu was being too modest, and said, "I heard that CATL's ternary lithium batteries have already shown results. If we switch to ternary lithium batteries, it won't be so strange."

Yu Xing remained silent.

Wang Chuanfu thought the other person was weighing the pros and cons, but he didn't expect to hear that President Yu's thoughts had already jumped off course in the next sentence.

“CTB, that is indeed a higher level of integration and a simpler structure.” Yu Xing spoke again, thinking of his own company’s advantages. “If the battery pack is to be integrated with the vehicle body, then it has to participate in the stress of the whole vehicle and be able to resist torsion better. In this regard, it seems that integrated die casting will become the basis for realizing it. We have a lot of experience in this area.”

CTB, which means the battery pack becomes part of the vehicle floor.

Regarding integrated die casting, Silicon Carbon Group repeatedly weighed the pros and cons when adopting this technology. In traditional technology, the weld points are weak points, and the weld is prone to tearing once an impact occurs.

If CTB is used, it needs higher rigidity, more accurate precision, and stronger impact resistance.

Integrated die casting can precisely address this need.

Furthermore, its integrated design also results in a lighter weight.

Upon hearing President Yu's words, Wang Chuanfu fell silent this time.

After a moment, he said sincerely, "Mr. Yu, we will need to learn from your experience in integrated die casting in the future. It does seem to be a very complementary technology to CTB."

BYD currently does not have integrated die casting, but the industry is now well aware of how hard integrated die casting of silicon carbide is. Moreover, the cumulative tolerance caused by current stamping and welding is very large, which absolutely cannot meet the requirements of CTB. Integrated die casting, however, perfectly solves this problem.

Yu Xing couldn't help but chuckle twice: "The more I discuss this with you guys, the more I feel we can take a step forward. President Wang, don't rush back. Let's sit down together and study this carefully. Wouldn't that be wonderful?"

Wang Chuanfu now has a real urge to fly to Lingang again.

But after thinking it over calmly, he said, "Mr. Yu, we can cooperate in this area. If silicon carbide really wants to continue with lithium iron phosphate, we can see if CTB is a possibility."

CTB embodies deep integration, with each vehicle designed for a specific purpose. As long as BYD and silicon carbide do not design the same model at the same time, their interests will be very similar.

Based on the current market performance of the two companies, there will be no major conflict in their positioning for quite some time.

Upon hearing Mr. Wang's offer of cooperation, Yu Xing happily replied, "Sure, Mr. Wang, let's do some research first and see which technical approach is feasible at this stage."

The two chatted for a long time on the phone, both expressing confidence in the future direction of technology.

Yu Xing felt that since President Wang had successfully led BYD to success, he must be capable.

He has confidence in President Wang.

Wang Chuanfu felt that with General Manager Yu's achievements in silicon carbide and his extensive experience in integrated die-casting technology, he was definitely capable of making it happen.

He has confidence in President Yu.

After hanging up the phone, both sides were filled with excitement.

Yu Xing drank half a cup of tea and didn't forget to send another message to President Wang, hoping that the other party could first list a technical exchange team so that everyone could start exchanging information from this moment on.

Soon, Wang Chuanfu replied with his agreement.

After clarifying his thoughts, Yu Xing called over Cui Zhiyu, Cai Wenda, and others, and this time also added members of the integrated die-casting team.

He recounted his discussions with Wang Chuanfu from CTP to CTB, asking about everyone's technical considerations and intuition.

Engineering verification is not possible right now, but the theoretical logic can be explored.

The president's office became lively again. The integrated die-casting technology suddenly shone here, which was really beyond everyone's expectations. But whether it was CTB's higher integration or the technical effect of integrated die-casting, the two seemed to be a perfect match.

Yu Xing raised the question and continued to listen, increasingly convinced by everyone's positive response that this vertical integration could lead to better vehicle performance.

After a long while, the office fell silent again, with only Cui Zhiyu remaining. Cui Zhiyu felt overwhelmed by the technical discussions of the past few days.

Originally, it was Mr. Zeng from CATL who brought people to explain the new technology of ternary lithium, but in the blink of an eye it turned into a structural innovation application based on its own interests. Before this structural innovation application was even finished being discussed, there was the idea of ​​a more integrated CTB, followed by the complementary integrated die casting.

Is this really going to work?
He voiced his concerns directly.

“This is a discussion. CATL, silicon carbide, and BYD are the three most accomplished companies in our industry. If everyone thinks it can be done, then it can be done.” Yu Xing remained calm. “Vertical integration is also a form of technological integration. The fact that integrated die casting can be so effective is a testament to our persistence and pioneering efforts.”

Silicon carbide has put a lot of effort into integrated die casting, with the initial goal of making the car body more rigid, and it has indeed achieved the desired effect.

However, the promotion of lithium iron phosphate technology at this time was truly an unexpected stroke of luck.

Based on current theory and experience, it is the engineering foundation technology for implementing the CTB path.

Cui Zhiyu temporarily put aside his concerns and raised another question: "President Yu, we are now increasing our investment in battery technology. What is our outlook for this area in the future?"

"We'll see how things go, one step at a time," Yu Xing smiled, knowing exactly what Cui Zhiyu was asking. "If CATL doesn't mind, it's not out of the question for us to get a share of the battery market."

Cui Zhiyu thought to himself, "Just as I thought!"

“At this stage, we should make good use of our integrated die-casting technology. As long as we stabilize the application of lithium iron phosphate batteries in mid-to-high-end models, we can sell batteries to other car companies in the future,” Yu Xing said. “Our gross profit margin in car manufacturing is less than 15%, while CATL’s gross profit margin is close to 30%. It’s making so much money, it’s making so much money.”

The gross profit margin he mentioned for CATL is only limited to the supply of silicon carbon batteries. If it is the company's entire business, the gross profit margin exceeds 40%.

It's no joke that automakers are working for battery suppliers; otherwise, the nickname "Ningwang" (Ning's nickname) wouldn't have come about.

Cui Zhiyu considered carefully and said, "Then this is a very important business development. We are at a disadvantage in this area because we manufacture our own cars."

“Indeed, being both a supplier and a competitor is a problem, but conservatively speaking, this business shouldn’t be too unprofitable,” Yu Xing calculated. “Being less likely to lose money will also allow us to better integrate the business, and if we do expand into the market, it can create a stable profit growth point.”

He chuckled again, "If we can succeed, our goal is to become like CATL (Contemporary Amperex Technology Co., Limited). It's just a side business. We won't try to sell to all car companies, just to..."

Yu Xing suggested a small idea: "For example, XPeng Motors? We've already finalized the intention to jointly purchase batteries, so if there's an opportunity in the future, batteries could also be included in the scope."

Cui Zhiyu was stunned. They were connected. How did they suddenly become connected?

He thought about it carefully for a while, and finally only said, "Hmm, XPeng Motors, well, Mr. He is quite enthusiastic..."

"We'll take it one step at a time. We still need to make our pure electric vehicles the best they can be within our capabilities," Yu Xing said earnestly. "There's no need to rush into investment and cooperation in this area, and even less need to rush into the future battery market."

Cui Zhiyu nodded: "President Yu, I am confident now."

We were already confident, and after communicating with CATL and BYD, we are even more confident.

Moreover, as Mr. Yu said, batteries are at least not so easy to lose money on.

Lingang is fostering exchanges and collaborations in technological development, but the reputation following the Silicon Carbon Technology Day was only so-so, which was reflected in the continued fluctuations in the stock price of Silicon Carbon Group.

Yu Xing had no time to care about public opinion; his mind was full of the application directions of lithium iron phosphate technology. However, foreign media paid unusual attention to the car company under the short seller.

Meanwhile, perhaps because of Yu Xing's criticism of the slow electrification transformation of well-known automakers, the carbon silicon range-extending route has once again attracted public criticism.

The presidents of Volkswagen and Volkswagen China both spoke out, one in an interview in Germany and the other in a live interview with reporters in China, expressing the same stance.

Range extender is the worst solution for new energy vehicles.

We would rather be slow than make mistakes.

Renowned short seller Chanos quoted the Volkswagen president's comments and also spoke out on Silicon Carbon Technology's open-source approach to the car's infotainment system: "Yu Xing seems to be more talented at short selling. Open-sourcing the car company's system is not a good idea. Look at Tesla. I think he should probably seek advice from Musk."

Yu Xing did not respond, but Musk made a joke.

Musk: "I have no advice for Yu Xing. I just need him to stop shorting Tesla."

He quickly added his assessment: "I think Chanos's evaluation of Yu Xing is very one-sided and unfair. His other company has achieved remarkable development in the mobile internet field, which is probably his main business."

Musk was referring to Silicon Carbon Data.

Yu Xing focused his energy on the Silicon Carbon Group because it had reached a critical stage in technology application and development. However, Silicon Carbon Data's performance was not inferior, and its commercialization trial mentioned at this technology day has even attracted widespread attention in the industry.

On stage, Lu Haiying, president of Douyin Business Unit, clearly announced Douyin's next steps to guests and reporters: the launch of video collaboration advertising, mainly featuring customized content for brands, to serve top brand clients.

This decision wasn't too early, as Kuaishou had already made moves, nor was it too late, as Alibaba's Leyin and Tencent's Weishi hadn't yet been commercialized.

"Following Kuaishou, Douyin has also announced its commercialization path, which is not unexpected in the industry."

"Whether it's to compete with giants or to build its own revenue cycle, Douyin will inevitably have to monetize, just like the bloggers on the platform who have accumulated a following."

"As for Leyin and Weishi, I believe they will not follow suit in the short term, or rather, they do not yet have the ability to do so. I have recently seen more and more content similar to Douyin on these two platforms."

"I think Leyin and Weishi also have a problem that is very troubling them. Content similar to Douyin is like driving traffic to Douyin, but if they don't produce this kind of content, they seem to be slowly losing their vitality."

"The two giants are trying to change the situation and are constantly trying to salvage their active users, while Douyin is just calmly watching everything."

"I noticed a view widely circulated on the Baixiaosheng Forum: Douyin will only face a real threat when Alibaba and Tencent can force Mr. Yu himself to come out in the short video business."

"The battle for the domestic short video market may not be far from being decided."

Sina reporters, not yet satisfied with their coverage of Lingang, quickly moved on to analyzing the situation of the Silicon Carbon Group, even directly applying similar viewpoints.

“When international short sellers can force Mr. Yu to reveal himself through the stock price of Silicon Carbon Group, that will be when Silicon Carbon Group will face a real threat.”

(End of this chapter)