2003: Starting with Foreign Trade

Chapter 673 The Turning Point of the New Era
As BMW's joint venture in China, CEO Wei Lan has always had a plan to support local suppliers.

According to Wei Lan's plan, by 2018, BMW Brilliance plans to have more than 50% of its parts sourced locally.

"BMW has a complete VPS team to support its suppliers. In my opinion, there are two ways for our local auto parts companies to go international: one is for automakers to provide technical support to their suppliers, and the other is through mergers and acquisitions."

"We at BMW highly approve of some of the practices of the zero-unit companies, as they are very similar to our strategic model."

Upon meeting, Wei Lan immediately explained the purpose of her meeting with Tan Jincheng: although Weilai Auto is not a large company, it provides substantial support to local auto parts manufacturers in Ningbo, including Top and Junsheng.

"Thank you for your recognition, Mr. Wei. I don't have your strategic vision. It's just because it's cheaper, and local businesses are easier to negotiate with."

Top makes braking systems, while Junsheng's main business is in automotive electronics. Neither of these companies is very large at the moment. As for how much technological accumulation they have, they are about the same as Weilai and Jinshidai.

Yes, but not many. However, this is the current situation for everyone.

"Haha, Mr. Tan, don't be modest. We've disassembled the Yuechi A1 before. The degree of localization of the parts is very high, and the quality of the localized parts is also very good."

After each popular car model is launched, it will almost always end up in the workshops of ambitious car companies where it is disassembled into eight pieces to see what's inside.

It's not just BMW; the Yuechi A1 has been disassembled by almost all major automakers. Big manufacturers want to find out if there are any infringements, while small manufacturers want to learn how an independent model can become a bestseller as soon as it hits the market without copying the appearance.

If you're asking who dismantled the most thoroughly, it's definitely Honda.

"No, no, you've given me the prize."

Aside from Mitsubishi's executives, this was the first time Tan Jincheng had met such high-ranking people in the joint venture. Their status hadn't changed overnight, and before understanding their intentions, Tan Jincheng could only remain humble.

But what he said wasn't wrong; choosing domestically produced parts is precisely to save costs, isn't it?
The same parts can have vastly different prices. Even though Zhongtai's MPV uses all imported parts, the market isn't buying it.

Seeing Tan Jincheng's attitude, Wei Lan smiled. Since his intentions were unclear, it was best not to say anything more.

"Let's get back to the main topic. I've heard that Mr. Tan owns a new energy company called Jinshidai, which has some research experience in power batteries?"

Yes, that's right.

Since the company's strategic focus shifted towards Weilai Automobile, Jinshidai's investment has become self-sufficient, utilizing Dexian Electronics' cash flow for financing, loans, and solving its own development problems.

Technology is something that requires a lot of money to develop. If you don't invest heavily, development will inevitably be slow. Over the past year, Jinsheng New Era has made very limited progress in power batteries.

The good news for Jinshidai is that since Huang Ming went abroad for inspection, he has bought shares in some overseas listed lithium mining companies, mainly in South America and Australia.

"I heard that your company's main research focus in power batteries is ternary lithium batteries?"

There are two main technological routes for automotive batteries: one is the lithium iron phosphate battery currently used by BYD, and the other is the ternary lithium battery.

The difference between the two is like that between lead-acid batteries and lithium batteries; it's hard to say which is better, as each has its own advantages.

The former has low cost and high stability, but poor range, much like lead-acid batteries in car batteries. The latter has high cost and poor stability, but strong range.

BYD's main R&D focus is on lithium iron phosphate, while Jinshidai is targeting ternary lithium.

Looking back from the perspective of those who have witnessed the widespread popularity of new energy vehicles, the biggest concerns for consumers buying electric cars are actually charging and range.

Range anxiety is an issue that electric vehicles can never avoid.

Taking Tan Jincheng's journey back to his hometown as an example, it's over 600 kilometers. If the problem of charging along the way can't be solved, no one would dare to drive an electric car back to their hometown.

Investing heavily in the research and development of ternary lithium batteries is Jinxin New Era's main focus, but that doesn't mean they've abandoned lithium iron phosphate batteries.

Just like the two-wheeled electric vehicles produced by Flash Technology and the old man's cars produced by Leichi, a large number of lead-acid batteries are still in use.

Wei Lan said with some emotion, "Then the financial pressure must be considerable. There aren't many companies in China that dare to research ternary lithium batteries yet. I admire President Tan's courage."

"That's right, but I believe this is a future trend. What are consumers most concerned about when it comes to electric vehicles? It's definitely the range. Even the two-wheeled electric vehicle industry is anxious about this."

Many people have experienced running out of power halfway home while riding their electric bikes.

"President Tan's courage is admirable. As far as I know, the losses of Jinshidai have dragged down most of the profit margin of Shanchi Group. It is not easy to stick to his own opinions and invest under such circumstances."

Traditional companies may lower their profit margins to avoid a lot of taxes, but judging from the recent financial report of Flash Group, it is clear that the other party is not deliberately lowering profits, but rather making real investments.

Genuine dedication, regardless of its purpose, is worthy of respect.

"Funding is indeed a problem, but we'll take it slowly. Fortunately, new energy is still in its early stages worldwide, so we can build it up little by little." To solve the cost and funding issues, buying mines is only one aspect, but the biggest problem is actually opening up the business.

Without business operations, no matter how many mines you buy, you're just a resource-based company and can't become a king in the new energy vehicle market. The cost of batteries in electric vehicles is the most critical factor.

At its peak, battery costs could even reach 30% to 40% of the total vehicle cost.

"BMW plans to launch an experimental electric vehicle, which requires an order of several hundred battery packs; however, our standards are quite high, I wonder if Mr. Tan dares to accept the order?"

"Your requirements are very high?"

Since you've asked this question, it must be of a high standard, meaning it must have high standards and high requirements.

"Yes, Mr. Tan, please wait a moment while I make a phone call."

Wei Lan smiled and replied, not that he was being mysterious, but that there was just too much information for him to handle. He brought it all at once to give the other party a little shock.

Seeing that Tan Jincheng seemed to want to avoid the situation, Wei Lan quickly said, "It's alright, there's no need to avoid me. I just had my assistant bring in our production standards."

After Wei Lan finished her call, two staff members came in, carrying a large stack of documents.

This scene truly surprised Tan Jincheng.

"Haha, these are all our production standards, a total of 800 sheets. If Mr. Tan is confident, these documents can be taken back now."

Wei Lan was very satisfied with Tan Jincheng's expression and was not worried that these standards would be leaked after Tan Jincheng saw them. He couldn't possibly read all 800 of them!

"Multiple copies? 800 copies?"

"Yes."

A sheet of A4 paper weighs about 4 to 5 grams. Goodness, these battery standards alone weigh almost 10 kilograms. That's quite a high requirement. However, this did arouse Tan Jincheng's competitive spirit.

So what if the requirements are high? We'll overcome them one step at a time. At worst, we might lose money on this order, but once we conquer this standard, it will be of immense benefit to the technological advancement of Jinshidai.

"That's true. Okay, I'll take a quick look first."

"Please feel free, Mr. Tan."

While Tan Jincheng was browsing the materials, Wei Lan didn't stop either: "Of course, even BMW itself can't meet this standard right now, but we will send engineers to your side to work together to overcome it."

The reason we dared to entrust this order to Jinsheng New Era is mainly because, apart from BYD, there are not many domestic companies developing power batteries and we don't have many other options. Another reason is that Desheng Electronics has done a good job in the field of mobile phone batteries.

The current technology for producing electric motors is practically nonexistent; it doesn't matter who you ask.

Desheng Electronics already had some battery technology accumulation, and with the technical support of Jinshidai, it has made significant breakthroughs in the consumer battery field after several years of transformation into making mobile phone batteries.

Currently, in addition to supplying a number of domestic counterfeit mobile phone manufacturers, Dexian Electronics also has some orders for Apple iPod batteries. Furthermore, it also cooperates with overseas mobile phone manufacturers such as Nokia and HTC.

Their business development capabilities are very rapid. They have even purchased batteries from BMW, and the quality, technology, and stability of their batteries are all quite good.

"The standards are indeed very high, but Jinshidai will take this order. Mr. Wei, would you mind taking on the challenge together?"

Tan Jincheng does know a bit about batteries. Although he is not a professional and cannot understand many technical terms, his understanding of electric vehicles and batteries is still quite impressive in this day and age.

Once this standard is mastered, Jinsheng New Era's battery technology will be able to lead the industry and the world.

The 800-page corporate standard was a crucial turning point for Jinshidai.

"Of course, Mr. Tan can take these standards back with your Jinxin Times team to study them. We can discuss the specific cooperation model later."

"My idea is for both sides to establish a joint expert group and a joint development team to work together to overcome this standard."

"No problem, do as Mr. Wei says."

The value of this standard far exceeds the value of the order from BMW. Since the other party trusts me, I will definitely take it back without hesitation.

However, this thing is useless to other companies; it's just a corporate standard.

It's not exactly a confidential document, and only relevant companies would care about it. Tan Jincheng wouldn't be foolish enough to disclose these standards to his competitors.

(End of this chapter)