2003: Starting with Foreign Trade

Chapter 898 "It's Time to Increase the Strength of Our Competitors"

"Hi! Tan, my good friend, we meet again."

"Hey, Elon, long time no see. I can feel your enthusiasm. Let me go."

In Shanghai, Tan Jincheng met Musk at the Weilai Building. Musk had just landed and was being picked up. Looking at Musk's unshaven face, Tan Jincheng couldn't help but smile.

All I can say is that this old guy is really anxious.

The Ministry of Industry and Information Technology has just released the medium- and long-term development plan for the automotive industry. Article 6, which focuses on deepening opening-up and cooperation and enhancing international development capabilities, formally establishes the relaxation of investment restrictions for foreign automakers establishing factories in China.

Previously, in order to protect domestic enterprises, foreign automakers were not allowed to build wholly-owned factories in China. However, even though the restrictions on wholly-owned factories have not been completely lifted at this stage, we are finally seeing the light at the end of the tunnel.

For Musk, who is currently suffering from production capacity issues, this news is like a godsend.

Having a chance is always better than having no chance.

Five days after the Ministry of Industry and Information Technology released its announcement, Musk revealed to the outside world that he would build four more Gigafactories in the future. When asked about the location of the Gigafactories, the old man knew how to dodge the question, saying that the Gigafactories would be global.

However, everyone knows that Musk's business empire is currently missing a factory in China, and he couldn't wait to announce the Gigafactory plan as soon as China released relevant plans.

In just one week, this old guy flew straight to Shanghai; he really didn't want to act anymore.

"Come on in, let me treat you to a meal first, then we can talk about other things."

After saying that, Tan Jincheng looked Musk up and down and said to Zhao Xinyi, "Go and find him a razor, and while you're at it, get him a change of clothes."

This guy's appearance probably wasn't intentional; he seems to have really been pushed to the limit. Tesla stock is currently experiencing a massive short-selling attack. In a sense, Musk's model is the same as Jia Yueting's: before the production capacity issue is resolved, the stock price of listed companies is very important to him.

The stock price must be kept rising, or at least kept stable.

In truth, his current predicament is entirely of his own making.

Zhao Xinyi smiled, responded, and left. The Chinese spoken by Tan Jincheng left Musk, who was standing to the side, somewhat bewildered.

Tan Jincheng offered a brief explanation, and Musk gave an awkward smile: "Looks like I'll have to learn some Chinese. Thank you, Tan, you've thought of everything."

He was indeed in a hurry. Last year, orders for the Tesla Model 3 were booming, and Musk, who was suffering from production capacity issues, hoped to build a fully automated factory where everything could be operated automatically by robots, in order to increase Tesla's production capacity in this way.

Musk, known for his decisive action, immediately convened a meeting and announced that he would begin mass production of the Edamame 3 four months ahead of schedule, pushing for an automated production line.

Musk's plan stunned Tesla executives. Faced with a mountain of orders for the Model 3, rashly modifying the production line at this point would not only waste a lot of time and money, but the results would also be difficult to predict.

But who is Musk? Does he listen to other people's opinions?

The forced implementation of automation had the consequences that Tesla executives had anticipated: the automated factory, built at a cost of over a billion dollars, was almost completely inoperable. It not only failed to solve the production capacity problem but also affected existing production capacity.

Faced with immense pressure to achieve mass production and constant short-selling pressure from the capital market, after the failure of full automation, Musk had no choice but to turn his attention back to China.

A well-developed infrastructure, a plentiful labor force, and an efficient government system are all things that Musk could not achieve in North America but longed for.

The meal prepared for Musk was simple. It wasn't mealtime yet, so I ordered him KFC and made myself a cup of coffee while I listened to Musk talk about the purpose of his trip to China.

"I understand. You want me to help you with the introductions, right? By the way, are you planning to build a factory in Shanghai?"

"Yes, that's right. I'd like to ask you, Tan, to introduce me to someone."

Musk nodded as he stuffed a hamburger into his mouth.

Actually, he had discussed this matter back in 2014, but Musk didn't understand our evasive tactics at the time and was completely fooled. As a result, he returned without gaining any benefits.

It's not that they gained nothing at all. From then on, Musk's battery station business began to expand in China, and Tesla's market share of battery stations gradually increased, and the business was able to get off the ground.

This time he learned his lesson and knew to ask someone for a recommendation.

Tan Jincheng pondered whether or not to help him make an introduction.

This guy is really powerful, so of course he knows about it. The question is whether he should get involved in Tesla's factory construction.

What benefits would it bring him to get involved?
Musk was certainly aware of what he would have to give in exchange for Tan Jincheng's help in making introductions. The cooperation between the two was relatively pleasant, but given that both sides are currently evenly matched, it is certain that Tesla's decision to build a factory in China will bring competitive pressure to Wei.

"We have a lot of orders for the Maodou 3. Our biggest problem right now is that we can't solve the production capacity problem. The battery supply problem is also a big issue. So, in addition to building a factory, we also want to sign a new battery supply contract with Jinshidai."

Although Tan Jincheng's battery business belongs to Weilai Group, the battery supply to other companies is still mainly through the subsidiary Luzhou Jinxin Times. This is partly for easier accounting and partly to reduce Weilai's influence in battery supply.

In business competition, even within the same company, there will be business competition. As long as Tan Jincheng or Zhang Yong, the management of Jinshidai, do not need to pay attention to the opinions of other management personnel.

For them, growing their business is only beneficial and has no drawbacks.

"Okay, don't worry, I'll contact them for you and give you an answer as soon as possible."

According to his description, he has been driven to the brink of collapse by production capacity issues lately. He often wakes up in the middle of the night in a panic due to production disruptions, and he is unable to control his emotions. He frequently verbally abuses and fires employees.

"Okay, I hope you can hurry up, Tan. You know my schedule is quite tight."

"Don't worry, it won't be too late. I'll introduce you to each other as soon as possible."

Tan Jincheng smiled. This madman's pressure probably comes not only from the pressure of production capacity, but also from the pressure brought by that old man taking office. The two are not on good terms. 2018 was a particularly tense year for their relationship. The fact that the madman Ma was able to go all in on us that year could be a form of self-protection.

If it weren't for this all-in bet that helped him get through it, given his relationship with that person, it's uncertain whether he could have survived.

Tan Jincheng believed the pressure he mentioned. In the past two years alone, more than 20 executives at the vice president level or above have left Tesla. Which company can withstand such turmoil?

If he wasn't under too much pressure, would he have come running over with a scruffy beard? If he wasn't under too much pressure, would this guy have been smoking a big MAS in front of the camera?

They even went so far as to make outrageous claims about taking Tesla private. Isn't that ridiculous?
How am I supposed to make money if you privatize me?

Tesla's stock price has been rising for several months, but it has recently been heavily shorted. Even with institutional short selling, some unrelated accounts are secretly accumulating Tesla shares. When you're in the business world, you need to have multiple aliases.

It's relatively easy to get Masla introduced to someone.

"But Tesla's demand is full ownership, which makes things a bit difficult."

He knew Tan Jincheng very well, and in a sense, the two had a fairly close relationship.

Tan Jincheng's businesses in Zhejiang Province, Jiangsu Province, and the expansion of his factory in Shanghai have all been observed by the other party. The battery factory in Shanghai will definitely continue to expand in the future.

Tan Jincheng even set his sights on Chongming Island. If Weilai's sales were to experience a major surge in the future, it wouldn't be impossible to build a new factory on Chongming Island.

When Musk arrived in Shanghai, the first person he sought out was Tan Jincheng. Immediately afterward, Tan Jincheng requested to meet with him, and Musk clearly knew why.

The opening up of capital is a gradual process. After the establishment of the first joint venture company in China after the opening up of capital, Yuchi Power, the joint venture project between JAC and Volkswagen was also finalized. The emergence of the second one was faster than everyone expected.

If all goes as expected, both companies will be able to obtain production licenses this year, and the pace of investment liberalization is indeed accelerating. However, the problem is that few local governments dare to take on projects like Musk's, which involve directly moving to wholly-owned subsidiaries.

"But don't worry, I will definitely meet him. I can't let such an opportunity pass me by. Do you have any suggestions?"

Looking at the entire new energy industry in China, massive subsidies have been poured in, forcibly creating a market segment with money. So far, the investment has likely exceeded 2000 billion yuan, representing a significant learning experience.

However, the level of students, including emerging car manufacturers and traditional car companies, is only qualified with the exception of Woolai and BYD. Geely and Chery, which started last year, can barely be considered qualified.

The cars they produce are getting further and further away from Tesla in terms of quality, reputation, and scale. Weilai has always benchmarked Tesla's quality and has also matched Tesla in terms of service and intelligence, making it arguably the best company in the industry.

But what the higher-ups clearly want to see is not just hundreds of billions invested with only one leader, but rather the revitalization of the entire industry.

While establishing leading companies is important, the growth of the entire industry is in the national interest. Last year, a large-scale subsidy fraud scandal was exposed, and the higher authorities are also looking to change the current situation.

"I wouldn't call it advice, but I do have a few humble opinions of mine, so please take them with a grain of salt."

"Tell me about it." "Tesla's sole proprietorship is not impossible. We can learn from Apple's model. I'm not bragging, but the quality of new energy vehicles in China is indeed worrying. Even if we in Weilai make great efforts in this regard, we can't support the whole country alone."

So-called market competition can only be considered real competition in a fair environment. In the past few years, the subsidy method of giving money first has always been profitable no matter how you do it. Apart from people like Tan Jincheng who have a cheat code for the future, who would seriously develop technology?
Even BYD is like this; many of their technologies are very outdated. It was only after raising the technological threshold this year that they increased their R&D investment and accelerated industrial upgrading.

These are relatively ambitious car companies. Some car companies that are purely focused on subsidies and have no intention of selling cars are even more outrageous. Their so-called new energy vehicles cannot even be considered new energy vehicles.

With a van and a few batteries, he received several hundred thousand yuan in subsidies.

No matter how much Wei Lai upgrades its technology, it has no impact on such manufacturers. There is no need to actually enter the market, so how can there be competition? I don't care how you upgrade. Some owners of host manufacturers even think that Tan Jincheng is a bit stupid.

Besides the fact that the money is too easy to make, another reason is that most OEMs are unwilling to give up their existing gasoline vehicle business, while also being pessimistic about the new energy vehicle industry.

Even if Weilai has already achieved annual sales of 10 vehicles, and Tesla's orders are booming, with the market share of new energy vehicles only at 1%, who would be willing to truly invest?
“You make a lot of sense, which is why a lot has changed this year, but what does that have to do with agreeing to Tesla’s wholly-owned factory?”

“We can learn from Apple’s model, introduce a disruptive force into the market, and drive the technological upgrade of the entire industry.”

Most of the new energy vehicle brands were established between 2014 and 2016. After two or three years of hype, whether they were genuinely doing it or not, the first batch of brands had to launch their actual cars to the market, otherwise they would not be able to raise new funds.

Companies like Xiaopeng, Wenjie, and WM Motor have all released their first models and announced their sales dates. Tesla's factory construction being a month or two earlier won't have a significant impact.

The period from large-scale subsidies to forcibly create a market segment to industry protection has basically passed, and domestic automakers have gained enough time to narrow the gap with Tesla.

The rapid development of Geely in the past two years, the outstanding performance of Chery in overseas markets, and the strong rebound of BYD in the second quarter, all prove this point.

It's time to put some pressure on domestic automakers.

The leader smiled meaningfully and said, "But agreeing to Tesla's factory construction plan will also put a lot of pressure on Wei."

He certainly understood the Apple model. Once Tesla was produced domestically, it would mean that it would enjoy the same treatment as Weilai in terms of both price and subsidies. Currently, Weilai's prices are almost comparable to Tesla's models.

Once the price and policy advantages are lost, the competition will be extremely fierce. He didn't quite understand why Tan Jincheng would act as an advocate.

"Yes, it does bring a lot of pressure, but at the same time it can relieve our stress."

The leader laughed and pointed at Tan Jincheng, saying, "You little rascal."

As a key national project, the new energy sector has been one of the hottest topics in recent years. However, the internet and real estate industries have led to a large number of offline stores facing operational crises, and even major players like Yintai have been forced to sell themselves.

While the industry is plagued by negative news such as ostentatious displays of wealth, outrageous remarks, and loan sharking, leading to a decline in reputation, the reputation of physical new energy vehicle manufacturers, led by Wei Lai, is steadily rising due to their business style.

His focus on technology and service, high-value cars, and good treatment of employees are considered "unconventional" in China, which has put considerable pressure on this young man over the years.

Take the acquisition of Meizu before the Lunar New Year as an example. It was just a normal capital merger and acquisition. Even if some tricks were used in the process, it shouldn't have caused such a huge wave of attacks on the Internet.

Such acquisitions are countless among BAT (Baidu, Alibaba, Tencent), but he only did it once, and it almost triggered a public opinion crisis.

Ultimately, his actions not only affected the interests of some people, but also made others disapprove. Everyone else is drinking, so why shouldn't you?

He knew Tan Jincheng's career development process all too well. To be honest, if it weren't for this little guy's cleverness in seizing the opportunity and his sensible and hardworking style that made people protect him, his career would at most be limited to Flash Technology.

FlashTech couldn't even make it into the top five in the domestic electric vehicle industry, let alone become the first listed company in the industry.

Of course, this little guy is also very lucky. He has been inexplicably connected with two consecutive sessions, and even his business trajectory in Jiangsu, Zhejiang and Shanghai is the same. Such luck is something that ordinary people cannot grasp.

Tan Jincheng smiled too. Since the other party had seen through his little scheme, there was no point in hiding it anymore.

"Over the years, I have been committed to driving technological progress in the industry. Unfortunately, my abilities are limited. Now, by bringing in this maverick Musk, in addition to spurring on our competitors, we can also share some of the pressure."

"As for competitive pressure, it is unavoidable. Without Tesla, there would be other companies. In addition, Tesla's factory construction in China is not all pressure for us, but also has benefits."

"That means Musk has initially agreed to let us enter the battery supply chain for the 3D Model 3. If that's the case, we'll have to speed up the expansion of our factory in Lingang."

Tesla is not just a pure electric vehicle company. Like Wynn and BYD, Tesla is now a company with a complete new energy industry chain. Previously, he even invited Tan Jincheng to help him with the factories he set up in North America.

The ambitious factory manager, Mr. Ma, actually wanted to take over the entire industrial chain of the Maodou 3, or at least its entire battery supply chain. He excluded Wei Lai from the battery supply of the Maodou 3.

This ambition is understandable; who wouldn't want to eat their fill? And the entire industry chain is indeed the safest option.

However, it is clear that he cannot handle this aspect for the time being. This time, he got anxious and agreed to let Weilai enter the supply chain of Maodou 3, which will greatly promote Weilai's battery industry.

"I see. No wonder you pleaded for him."

The leader suddenly realized something, and at the same time, he felt a little emotional. If introducing Tesla could also encourage Wei Lai to continue investing in Shanghai, then it might be worth a try.

"Okay, I understand. You can go back now. We will send Mr. Musk a formal invitation."

"Okay, then I won't disturb your work."

He didn't get a clear answer, but that wasn't his concern anymore. He had said what he needed to say, and saying anything more would be presumptuous.

When he returned to the Weilai Building, Musk was still waiting for him in his office. This guy had been in Shanghai for two days and one night, spending all his time in the Weilai Building without going out. Obviously, he didn't plan to show his face in public before the formal meeting.

"Don't worry, the leader promised to meet with you as soon as possible; come on, I'll take you to see our Weilai Battery Factory?"

Musk exclaimed with delight, "Really? Thank you so much, Tan!"

"By the way, Tan, what do you think are the chances that we can cooperate?"

The factory manager is really pushing them to the brink; that's true, anyone would be anxious in that situation. For Tesla, the concern isn't just about production capacity, but also about the political crisis. If it can't be resolved quickly, Tesla could really fall into bankruptcy again.

The prerequisite for solving all of this is to resolve the production capacity issue and deliver all the orders for Maodou 3. Only by having a large enough scale can we weather this crisis.

"The probability is high; it all depends on how you negotiate."

"Really?"

"Really, why would I lie to you? Of course, it probably won't be that quick. The negotiation process may take a little longer, but we think we should have a result before the end of this year."

The competition in top-level business is definitely not just a competition on a business level.

Musk wants sole ownership, and no city other than Shanghai dares to take this risk, even if they can foresee the huge potential profits. This is not just a business matter.

This is completely different from the cooperation between Weilai and BMW, or between Volkswagen and JAC.

The unique location of the Shanghai Stock Exchange and the current leader are the reasons for Tesla's Shanghai Gigafactory. It's okay for family members to make small mistakes, but what about those who aren't family members?
"Is that so? Well then, I'll take your kind words."

In high spirits, Musk, led by Tan Jincheng, visited the Weilai Battery Factory in the Lingang Industrial Zone. That evening, images of Tan Jincheng and Musk walking side by side went viral online, sparking further speculation about a potential collaboration between the two.

Tesla and Weilai have long been partners, but since last year, with the construction of Tesla's North American battery factory and the absence of Xuanwu Battery from the list of battery suppliers for the Model 3, rumors have circulated twice in the market that the cooperation between the two parties is about to be terminated.

Furthermore, the large-scale reduction of Tesla's holdings by ByteDance's engine at the beginning of this year made the rumor seem increasingly credible, and even caused the stock price of the company to fall at one point.

Although Weilai Co., Ltd. refuted these rumors on its investor interaction platform, the market did not seem to buy it.

Musk's sudden appearance sparked renewed speculation in the market, but neither WILTECH nor Tesla responded to the cooperation for several days, during which WILTECH's stock price fluctuated little.

Tesla's stock price, after surging nearly 20% for two consecutive weeks, has finally stabilized. This week, Tesla rose 4.65%, basically stabilizing its downward trend.

"That old rascal is quite shrewd when he's not angry."

As the "world's richest man," his judgment and execution abilities should not be underestimated. When he calms down, manipulating secondary market investors is incredibly easy for him.

"Let's go to Zhangjiagang, let's not worry about him."

(End of this chapter)