2003: Starting with Foreign Trade

Chapter 900 The New Players' Arrival Elements

On the eve of National Day, Musk is preparing for his second trip to China this year to promote his Shanghai Gigafactory plan. Meanwhile, on the other hand, the secondary market investment team at ByteDance's advertising platform is having a heated discussion about Tesla's stock price fluctuations.

"Tesla's deliveries hit a new high in the third quarter, but if you look at the specific data, they actually have a lot of problems."

"The Maodou X performed brilliantly and truly lived up to its reputation, but the Maodou S's delivery volume only ranked third in history and did not achieve a true new delivery record."

"In the United States, the Model S has sold more than 7000 units for five consecutive quarters, which means that the sales of the Model S alone have exceeded the combined sales of the Porsche Panamera, Mercedes-Benz S-Class, Audi A8, and BMW 6 Series and 7 Series for 15 consecutive months."

"While reaching a new high, the delivery of the Model S only ranks third in history, which indicates that the sales of this model in North America have reached a ceiling and have entered a period of sluggish growth."

"Maodou S has entered a period of slow growth, but with Maodou X taking over, the problem is not too big. However, their biggest problem right now is actually with Maodou 3."

At the end of July, Musk and Tesla announced the delivery plan for the Model 3. Starting in September, 1500 Model 3s will be delivered every month. Musk has also repeatedly stated that the Model 3 production line is working properly and everything is normal.

However, judging from the actual delivery and production data, this is just a way to appease investors; only 260 Maodou 3s were produced in September.

Even hand-made products have a production capacity of more than this, so it's obvious that there's a major problem with the North American Gigafactory or the Edamame 3 production line.

"We have no way of knowing what went wrong at the North American factory, nor how long it will take to resolve the issue, but in any case, the delivery of the Maodou 3 this year will definitely fall short of expectations."

"Furthermore, even if Musk manages to secure the rumored Shanghai Gigafactory, it will still take at least a year and a half before mass production begins. This period of about a year and a half will be the most difficult time for Tesla."

"Yes, that's why Tesla's stock price plummeted after the official data was released. If the production capacity issue of the Model 3 isn't resolved, the growth of the Model X alone won't be enough to support the current market value."

"While it's possible that Tesla's stock had very good initial prospects and expectations, it currently has significant problems and is not worth buying further at present. The risk is too high, or rather, it's not worth it."

"If a situation like 2008 were to occur again, Tesla would be plunged into crisis once more."

Ten months have passed since the end of last year, and Tesla still cannot solve the production capacity problem of the Model 3. So, the large number of orders it has are not just orders, but a time bomb that could plunge Tesla into an unprecedented crisis at any time.

"So what are your opinions?"

While flipping through the documents in his hand, Tan Jincheng listened to his subordinates' analysis and also thought quickly.

"Our suggestion is to suspend the acquisition of Tesla stock, and even short their stock like other institutions. I wonder what the boss thinks?"

While poor Factory Director Ma was in a state of utter chaos, his business partners' subordinates were preoccupied with how to further exploit him.

Through negotiated transfers and large-scale reductions, the total Tesla stock held by ByteDance, whether publicly or covertly, is far from 5% of the total share capital, and has long exceeded the stipulated short-term trading timeframe.

From any perspective, ByteDance's manipulation of Tesla stock is not illegal. Although Tan Jincheng gave Musk some negotiation advice and acted as a private consultant, he did not receive any benefits. Even though Weilai Auto has a cooperation with Tesla, it does not constitute insider trading.

The same applies to Nvidia; both are fully tradable and freely traded stocks.

"Alright, let's give up on Tesla stock for now and increase our holdings when you think it's appropriate. As for shorting, let's forget about it. After all, we're an important partner, so it's not worth it."

After thinking for a moment, Tan Jincheng accepted the investment team's suggestion.

He was mistaken. Under the current circumstances, Tesla's performance is indeed as the team analyzed: Tesla is not enough to support its current market value of over $450 billion.

From the worst-case scenario, if the Shanghai Super Factory project fails to be finalized, and the robotic automated factory project continues to struggle with its production capacity issues, then Maodou3's orders are indeed like a ticking time bomb.

Judging from the perspective of the capital market, it is indeed not advisable to buy before these potential risks are cleared or explode. Wall Street's short selling of Tesla is not without reason.

If Tesla's production capacity for the 3D Supercharged Model 3 does not improve effectively within a year, or if the Shanghai Gigafactory project fails to be finalized, Tesla could indeed face a crisis similar to that of 2008.

Good heavens, forcibly launching a robotic automated factory with a monthly output of several hundred vehicles when the technology is not yet mature—isn't this the same tactic they used when they messed up their rocket project twice and almost ruined the company?

This is so Musk-like.

"Okay, let's stop here for now, but it's a bit of a shame not to short it."

"The main purpose of the secondary market is to make money, but we are not only focused on the secondary market. We still need to be careful with partners like Tesla and not go too far."

"As for the other companies, you can choose whichever you like."

ByteDance is a well-known investment company, but from a broader perspective, it is the controlling shareholder of a series of assets belonging to Tan Jincheng. Through ByteDance, it controls his assets, and secondary market investments are just another business.

While the secondary market is primarily driven by profit, it must also be subordinate to the overall industry. Sometimes, even if the stocks you buy don't make money or even lose money, you still have to buy them. This cannot be viewed from a purely investment perspective.

Take the private placement in Junsheng Electronics as an example. The placement price was 32.01 yuan, and it needs to be locked up for one year. Junsheng's stock price is currently only 35.48 yuan, with a total market value of 337 billion yuan. One year later is October 2018. Tan Jincheng can be almost certain that this investment is unlikely to make money.

However, this kind of fixed investment is still necessary. The 4.93% stake in Junsheng Electronics is much more useful than the stock price, especially since Junsheng has already taken the lead in the bankruptcy reorganization of Takata through KSS.

$15.88 billion, roughly 108 billion yuan, is about one-third of the company's market value. In addition, his controlling stake in Junsheng was diluted from over 45% to 33.37%. It has to be said that Wang Jianfeng was quite bold.

However, if Junsheng can absorb and integrate Takata, it will see a significant improvement in both its own technology and its position as an automotive parts supplier.

"To be honest, if it weren't for the trend of the new energy vehicle sector, Tesla's absolute influence in Europe and North America, and its status as one of the well-known technology stocks in the US stock market, Tesla really wouldn't be considered a good stock."

"That's true. They're constantly jumping around, and there's always a big drop in price."

Truly good stocks are like Nvidia after 2016, steadily rising every month, with the stock price climbing in a slow and steady upward trend. Once you buy them, you don't need to put in too much effort unless there are critical time points or performance fluctuations.

The current Tesla is different; it requires a significant amount of effort to keep an eye on it.

As for short selling, times have changed. ByteDance is not short of money now, and it really can no longer manipulate the stocks of its high-level partners.

Normal share purchases are fine, and cashing out when the stock price rises is no problem. However, following suit and shorting when the other party encounters problems could damage the cooperative relationship if discovered.

Thinking of this, Tan Jincheng seemed to have thought of something else: "Alright, that's settled. If you think Tesla's stock still has a lot of room to fall, and you want to reduce your losses by selling our publicly traded shares, that's not impossible. Just report to President Cheng directly then."

Musk is going to visit China again, and this time, apart from informing Tan Jincheng, he did not ask for his opinion.

"They must already have an idea, right?"

Tan Jincheng walked out of the ByteDance office with a relaxed gait.

For a brief moment, he even considered causing some trouble for Musk by manipulating things like factory construction and short selling, to buy Wei more time.

But after calming down, I decided to suppress this thought.

Times have changed, and Tesla is no longer the Tesla of 2008. In the field of new energy vehicles, the fragmented European region has not made much progress. As an American and a global benchmark for new energy vehicle performance, Tesla, even if the old man and the madman don't get along, will not stand by and watch it be brought down by certain capital.

Just as we would bail out a large company in crisis, the Americans would do the same.

Since we can't take them down, there's no need to offend important partners for a little bit of profit. The benefits of helping Musk implement the Shanghai Supermarket project as soon as possible are far greater than those of sabotage.

Yu Province.

At the Haima Automobile factory in Zhengzhou, the capital city of Henan Province, a meticulously planned press conference is in the final stages of preparation.

"Mr. Tan, welcome, thank you very much."

When Tan Jincheng's car appeared outside the press conference venue, He Xiaopeng rushed over, clasping his hands in a fist and beckoning with a smile.

He Xiaopeng, who is not tall, looked spirited in a gray casual jacket paired with a white inner layer.

"Mr. He, congratulations on becoming the first new energy vehicle company to mass-produce vehicles. I wish Xiaopeng Motors great success on its market launch."

Tan Jincheng smiled and clasped his hands in greeting. He had been invited to attend the launch event for Xiaopeng Motors' mass-produced vehicle. New energy vehicle startups had been making moves since the National Day holiday, and Xiaopeng was the first to actually produce a real car. "Thank you for your kind words. Please, let's have a couple of drinks after this."

"Okay."

Upon entering the press conference venue, the first thing that catches the eye is a red SUV, which is the production version of the Xiaopeng 1.0. It looks quite beautiful under the lights. Tan Jincheng had seen spy photos of this car before.

The entire car is filled with "X" elements and has its own independent design language.

"Let imagination happen"

The huge poster features five large white characters above the logo of Xiaopeng and Haima.

Zhao Xinyi couldn't help but mutter to herself, "Why does this slogan feel so familiar?"

"Of course I'm familiar with it, isn't that just what Accountant Jia said?"

Even after moving to the United States, Jia Yueting still hasn't given up on his dream of building cars. However, few people in China remember him anymore, except for LeEco shareholders.

LeEco, suspected of financial fraud, officially suspended trading on April 14 this year. On the day of the suspension, LeEco closed at 30.67 yuan, with a market value of 612 billion yuan. After the suspension, LeEco was hit with a series of scandals, which made headlines for several months.

What's rather absurd is that despite all the scandals, LeEco still managed to distribute a 10-for-10 bonus share and a 0.28 yuan dividend in August of this year. It seems that Jia Yueting squeezed every last drop of blood out of LeEco.

At the end of September, China Post Fund was the first to issue an announcement, stating that the valuation of some of the LeEco shares held by the company's funds had been adjusted again, with the valuation price adjusted to 3.92 yuan per share.

Less than a week after China Post Fund, several other funds, including Invesco Great Wall, E Fund, and Nuoan, adjusted their valuations of LeEco, with prices roughly equivalent to those of China Post Fund.

Based on LeEco's price of 15.33 yuan after the transfer, LeEco.com, which has not yet resumed trading, has already been set at a 75% drop, equivalent to 13 consecutive limit-down days after trading resumes.

What pained them the most was that when the Fund News interviewed Cheng Linfeng, the general manager of the investment department of ByteDance's Big Data Engine, and asked him about his views on the valuation of LeEco, Cheng Linfeng bluntly stated that LeEco's stock was worthless to ordinary shareholders and that they should cut their losses as soon as trading resumed.

This National Day holiday was anything but pleasant for the 18 retail shareholders of LeEco.

Who says Jia Yueting doesn't rip off ordinary people? That's because there are 18 "leeks" (a derogatory term for inexperienced investors) who pay for their schemes!
"Goodness, no wonder everyone says they're building cars based on PowerPoint presentations. This slogan is a bit ominous."

Zhao Xinyi muttered to herself, "Why did you have to imitate Lao Jia of all people?"

The production car, tentatively named Xiaopeng 1.0, is more of a concept. Only 15 units will be produced initially, available in red and navy blue, and will not be sold to the public. In reality, it is a test vehicle.

However, this is already quite good. The concept of new energy vehicle manufacturers was first proposed in 2014. The "PPT car manufacturing" was criticized for four years. During these four years, countless players rushed in one after another, but they just couldn't produce a real car.

The most impressive one is Xiaopeng, the predecessor of WM Motor in the industry. It completed 12 rounds of financing within two years, with a total amount of RMB 350 billion. Internet giants such as Baidu and Tencent are its main investors.

This leading company couldn't even obtain a production license.

Of course, Xiaopeng also lacks production qualifications, otherwise the press conference wouldn't have featured the Haima Automobile logo. In the first half of this year, Hozon Auto, also known as Nezha Auto, obtained the last new energy vehicle production qualification, after which the Ministry of Industry and Information Technology officially suspended the issuance of new energy vehicle production qualifications.

Most people may know about Nezha Auto from Zhang Yong, the CEO who was treated like a grandson by Zhou Hongyi, but in fact, Nezha Auto was not founded by him, but by Fang Yunzhou who came from Chery.

Of course, Zhang Yong is now the CEO of Weilai Group, and has a very high status in the industry. It is no longer possible for Zhou Hongyi to treat him like a grandson, not even if he leaves Weilai.

Like Li Bing, the founder of Hezhong is also from the same hometown as Tan Jincheng, both belonging to the greater Yicheng urban area.

When Hozon Auto obtained its last new energy vehicle production license, the Anhui Daily even published a special report titled "Anhui's Strength in the New Forces," highlighting three people from Yicheng, including Tan Jincheng.

Chery, BYD, Weilai, Wenjie, and Hozon Auto—five of these are independent brands founded by people from Anhui Province. If we include the future head of automotive business at Chery, and JAC Motors, the strength of Anhui in the new energy vehicle sector is indeed considerable.

For emerging players, they either have to acquire Lifan's production license indirectly to obtain automobile production qualifications, like Li Bing's Wenjie, or they will be forced to withdraw due to qualification issues.

In just a few months, several emerging electric vehicle companies have announced their withdrawal from the car manufacturing industry, revealing the industry's harsh reality.

The current industry landscape is dominated by Li Bing's Wenjie, He Xiaopeng's Xiaopeng, and WM Motor, who are the leading companies among the new energy vehicle startups. He Xiaopeng is currently collaborating with Haima Automobile to manufacture cars, and he will likely acquire that company in the future.

Li Bing has secured the necessary qualifications and developed a concept car, which is expected to be released in December this year. Since leaving Yiche, this guy seems to have unlocked his full potential, and his fundraising has been very smooth. It seems that the capital city is going to be very lucky for him.

Of course, this guy also spends money like crazy. He even held a press conference in London, which cost tens of millions of dollars. He also plans to hold another press conference at Wukesong at the end of the year. He's really showing off.

Unlike He Xiaopeng, who started with cars, Li Bing, who took the circuit route, was focused on going public and hoped to raise more funds through the platform of a listed company.

If He Xiaopeng still had some traditional automotive thinking in mind, then Li Bing was purely internet-minded: hype up the concept, go public and raise funds, and then think about product issues.

As for another leading company, WM Motor, it is currently in talks with Dalian Huanghai regarding an acquisition, hoping to indirectly obtain automobile production qualifications through the acquisition. It's a bit unreasonable that it has raised more than 300 billion yuan but doesn't even have a qualification.

Dalian Huanghai is the holding company of Shuguang Automobile, one of Tan Jincheng's initial partners. At that time, Tan Jincheng only acquired Huanghai's bus business and Changzhou factory; he did not acquire the business located in Northeast China.

Huanghai Automobile in Northeast China currently operates some automobile chassis and other parts businesses, and no longer has any complete vehicle business. However, they still have an automobile production license.

That's the advantage of being a long-established manufacturer.

While He Xiaopeng was giving a passionate speech on stage, Tan Jincheng's thoughts had already wandered far away. The configuration of Xiaopeng 1.0 version was not particularly new to him. The three electric components and one screen were standard, and the battery used was still the 18650 battery produced by Weilai. The vehicle system also applied some Horizon Robotics technology.

If you ignore the exterior, the interior of the car is very similar to that of the WooLan brand, with components such as the central control screen and motor being supplied by the same company.

Like Li Bing's Wenjie, Tan Jincheng, who is also one of the shareholders of Xiaopeng Motors, provided a lot of help in the early days of Xiaopeng Motors. Both of their models have Wei Lai elements.

He Xiaopeng spoke eloquently and seemed somewhat excited, but his caution was also very evident in his words.

"As a car company that is ridiculed by the public for its PowerPoint presentations, we are the first to be validated. The first car may not be perfect, but iterative thinking is an inevitable path for Internet products. We will discuss with the first batch of users, iterate and optimize the hardware, and then launch a 2.0 version that is more suitable for the general public."

"As someone in the internet industry, I had never experienced the complex process of a car going from production to delivery before. At UC, it took us ten years to grow the company from 2 people to 3000 people, but at Xiaopeng Motors, it only took two years to grow to 3000 people."

"In addition, I would like to thank Mr. Tan Jincheng, the president of Weilai. Xiaopeng Motors was able to become the first new car manufacturer to produce a mass-produced car thanks to the great help of Mr. Tan Jincheng and Weilai."

"Mr. Tan has been very generous to us in terms of both funding and technology. He even took me to visit Weilai's production line and let me experience their new products. I am very grateful."

He Xiaopeng followed the same historical trajectory as Ali, serving as a senior executive. He officially resigned a month and a half ago to become the chairman of Xiaopeng Motors. This move was not without its advantages, as He Xiaopeng received a huge investment from Ali.

In May of this year, Xiaopeng Motors signed an agreement with ZQ City to acquire 3000 mu of land with a total planned investment of 5 billion yuan in two phases, and now owns its first production base.

On stage, He Xiaopeng smiled and pointed to Tan Jincheng, who was sitting in the middle of the first row. Tan Jincheng smiled and waved in response.

In fact, neither of the previous "Wei Xiaoli" brands were the earliest or the most powerful new energy vehicle brands. The founders are probably the reason why these three companies were able to stand out from a bunch of internet car manufacturers and become leading new energy vehicle brands.

Li Xiang is an outstanding product manager. Tan Jincheng recognized his abilities and recruited him. Now, Li Xiang is the president and CEO of Lotus China, controlling the only supercar company in the country, enjoying immense success.

The relatively pragmatic He Xiaopeng and the capital-driven Li Bing are not actually very successful among today's new energy vehicle brands. In fact, their fame is not as great as Jia Yueting's LeEco Auto, and they are even less comparable to the arrogant WM Motor.

In some ways, their current brand recognition is not as high as that of Youxia Motors.

Many people may not have heard of Youxia Motors, which was founded in 2014, but they were very successful in the first two years, despite being known as the pioneer of PPT car manufacturing.

Perhaps for this reason, the relatively pragmatic He Xiaopeng thought of building the car first and getting out of the pit of "PPT car manufacturing". In terms of reputation, they are not as good as other new forces, and in terms of financing ability, they are not as good as Li Bing.

"It's a smart move, but I wonder what he wants to talk to me about tonight."

He didn't believe He Xiaopeng was just expressing his gratitude; everyone was so busy.

(End of this chapter)