Rebirth 99 to become a car giant

A single move affects the whole body.

Against the background that the overall supply situation of power batteries is relatively tight, various battery manufacturers have stepped up their efforts in the development of energy storage batteries, which will more or less definitely bring further risks to the supply of power batteries.

Just like when the chip supply crisis broke out in the automotive industry in 2020 in the previous life, one of the important reasons was that various chip companies reserved their production capacity for the consumer electronics market, which is more profitable and everyone thinks it has better prospects.

The delivery cycle of chips is relatively long. This adjustment will cause a supply crisis when the auto market recovers quickly.

At that time, an ordinary car-grade chip might cost five yuan under normal circumstances, but there was simply not enough supply.

In the market, you may need to spend 100 yuan or even more to buy a chip that is originally worth only five yuan.

This is caused by very large changes in supply and demand.

Although the situation of the battery will not be the same as that of the chip, there may be a situation where the OEM cannot get the goods from the supplier, but it can be purchased in the market.

But in the end, due to tight production capacity, people are unable to deliver the quantity you want on time. This is very likely to happen.

Even this is something that is bound to happen in the last year or two.

Yi Jia from Changan Automobile called Cao Yang personally before, worried about this kind of thing happening.

Now that Nanshan Battery has signed a large-scale 5GWH energy storage station project with a big company, this will definitely make more OEMs worry that their battery supply cannot be guaranteed.

"Mr. Zhang, the recent sales situation in Aian is relatively stable, but we will launch new products soon, and then the demand for batteries will further increase."

"Now Nanshan Battery has warned all major customers about the battery supply pattern in advance and requires everyone to lock in orders three months in advance."

"Otherwise, there will be a risk that there will be no way to guarantee delivery as ordered."

"This shows that their battery production capacity is already very tight and there is no way to waste any time."

Zeng Guangda is now focusing his main work on Yangcheng Aian and Yangcheng Trumpchi.

The performance of these two companies can be said to be relatively outstanding, and many people are very satisfied.

Therefore, even if the performance of their two joint ventures is not so impressive, the overall business situation of Yangcheng Automobile Group is still good.

Especially Yangcheng Aian, it is now the largest new energy sales company in China second only to Changan Automobile.

This result is definitely beyond the expectations of many people.

After all, in the automobile industry, Yangcheng Aian's historical background is relatively weak, but it is a latecomer to the top, which is remarkable.

"The entire battery industry is in tight supply. This situation is not known until now."

"Isn't it because of this reason that our new project has just been signed with Nanshan Battery? We have made some supplementary agreements specifically for the situation when the number of production units is not reached."

"Now it's just that the situation has become more serious."

Zhang Jiaqi is quite confident about Nanshan Battery, but he is not particularly worried.

The other party is a group enterprise that has mastered the entire industrial chain of power battery production, and its production expansion speed is definitely the fastest in the industry.

If Nanshan Battery can't handle it, then other battery manufacturers will definitely be even more unable to handle it.

"This is indeed the truth, but I also have another worry, that is, the rapid development of energy storage batteries will inevitably lead to a tight supply of raw materials for the production of lithium batteries."

"This will directly have a very negative impact on the supply and cost of our power batteries."

As soon as Zeng Guangda said these words, Zhang Jiaqi immediately realized that what he had just thought was too simple.

I just thought that the production lines of power batteries and energy storage batteries are separate, and the supply influence between them is very weak.

Moreover, Nanshan Battery has made relevant plans a long time ago, so it will not be in a hurry because of some changes.

But he did not expect the impact that the rapid development of the energy storage battery business would have on the entire industry chain.

Nowadays, power batteries are basically ternary lithium batteries or lithium iron phosphate batteries. No matter which type of battery they are, they need to use related lithium mineral products such as lithium hydroxide or lithium carbonate.

In addition to lithium-related compounds, some other raw materials also have certain similarities.

The development speed of China's power battery industry has exceeded everyone's expectations.

This means that there may also be problems with the development of lithium mines and the production capacity of some other raw materials.

In order to ensure supply, various battery manufacturers will definitely try their best to seize the resources of these raw materials.

This will lead to relatively large changes in the supply and demand situation in the market.

The originally stable supply has turned into a shortage, and price increases are almost inevitable.

And the price increases caused by this tight supply are often exaggerated.

For example, I am a manufacturer of lithium carbonate. The product was originally priced at RMB 30,000 per ton. Now a new customer suddenly says it is willing to buy it at RMB 40,000 per ton. Should you sell it?

If a contract is not signed with the original customer, or the price of contract breach is relatively low, many raw material manufacturers will consider selling the materials to customers with higher bids.

This is a very bad start.

Customer C may buy the goods at a price of 45,000 yuan per ton.

You grab it, I grab it. Maybe within a few months, the price of lithium carbonate will soar to 100,000 yuan per ton, or even more exaggerated levels.

In the end, these costs must be borne by the original equipment manufacturers, because battery manufacturers cannot absorb such a large cost increase.

Even when they rush to buy these raw materials, they will communicate with the OEM in advance and wait for the other party to accept the price increase before they rush to buy them.

Or if you don’t accept the price increase, then I will give priority to supplying batteries to customers who accept the price increase.

It depends on whether you want to give birth or not.

No matter which situation it is, it is definitely not the situation that Yangcheng Aian wants to see.

It is not profitable to produce electric vehicles. Batteries are the most expensive component. If prices continue to rise, it will definitely be detrimental to the development of this industry.

"Has Nanshan Battery made any relevant price increase requirements?"

Zhang Jiaqi quickly figured out the logic and looked at Zeng Guangda worriedly.

There is absolutely no room for failure in the development of Yangcheng Aian. This is the will that has been unified within the Yangcheng Automobile Group.

"Not yet. After all, the procurement of raw materials has a cycle."

"The lithium carbonate and other raw materials used in the batteries delivered now were actually purchased a few months ago, and the prices of these raw materials may have been determined earlier."

"But now the futures price of lithium carbonate has begun to rise, and I am worried that this upward trend will become more and more obvious."

Before discussing this topic with Zhang Jiaqi, Zeng Guangda had obviously made some preparations.

It is precisely because he has already investigated and learned some information that he is even more worried.

He had a hunch that the power battery supply problem of Yangcheng Aian would be unavoidable in the next year.

As this problem arises, the price of power batteries will also rise significantly.

Normally, when production costs rise, sales prices will definitely rise accordingly.

But in today's competitive landscape of China's automobile market, this logic cannot be realized.

Originally, everyone's prices were about the same, but now the price of your product has increased, and if others have not, then consumers may buy other people's products.

Of course, some people may say that the cost of everyone's power batteries must have increased, so wouldn't it be enough for everyone to increase prices together?

This way, you don’t have to worry about being too stressed.

In theory, this situation is indeed possible, but in fact it will not happen in China at all.

Some car companies even want to take this opportunity to eliminate their opponents so that they can overtake in corners.

Therefore, the final result is likely to be that only some manufacturers will increase prices due to rising costs, or manufacturers with stronger brand bargaining power will consider raising prices.

Most manufacturers will only choose to bite the bullet and bear this price increase.

Yangcheng Aian is probably one of the majority of manufacturers.

“Can we hedge the risk of this price increase by purchasing futures on related raw materials?”

Zhang Jiaqi can always sit in the position of general manager of Yangcheng Automobile Group, so his vision and ability are naturally very good.

Now that Zeng Guangda has reported this risk to him, he quickly thought of a plan to avoid this risk.

In fact, the purpose of futures is to hedge the risks of related companies.

But slowly, its financial attributes became more obvious.

"Theoretically it's feasible, but we don't have the talent in this area, and if we're not careful, we may cause greater losses."

When Zeng Guangda said this, Zhang Jiaqi couldn't help but frown.

This won't work, that won't work either, so why not just wait?

But he didn't get angry either.

Because he also knows that as a state-owned enterprise, if it suddenly invests in the futures market, it will be easy to say if it makes money by then, but if it loses money, it will be difficult to tell clearly when facing various audits.

Obviously no one is willing to take this kind of risk.

"Let's discuss this matter with Nanshan Battery and see if they have any better solutions."

"Or we can just pay in advance and buy all the battery orders for this year."

As long as the relevant risks are predicted in advance, there are definitely ways to avoid them.

Anyway, Zhang Jiaqi couldn't accept letting things go.

"Well, I'll call Lin Cheng to communicate and go over to talk in person."

Zeng Guangda couldn't find any other better way, so he could only go and talk to Nanshan Battery first.

Naturally, BYD is also feeling this change in the power battery supply landscape.

In response to this change, BYD is also discussing some new change plans internally.

"Mr. Wang, I think the company's battery business can be spun off separately to establish a battery company. Then the battery company will not only supply power batteries to ourselves, but also to other domestic customers."

"Currently, domestic new energy vehicles are developing rapidly, and the demand for power batteries is already in short supply."

"Many OEMs are considering introducing more power battery manufacturers to avoid future supply risks and contribute to cost reduction."

“Our company’s power battery business has always been second only to Nanshan Battery.”

"But during this period, battery companies such as Guoxuan have been continuously expanding their production capacity. Manufacturers such as Sunwoda, which originally produced consumer electronic batteries, have also begun to get involved in the power battery business."

"If we don't make any changes, we will probably be surpassed by other power battery manufacturers."

As the head of BYD's battery business, Lu Faxiang still has a strong sense of crisis.

Although BYD attaches great importance to new energy vehicles and launched electric vehicles and plug-in hybrid vehicles relatively early, the sales of electric vehicles are somewhat unsatisfactory.

Let alone being number one in the industry, they do not have a place among the top three in the industry.

This has resulted in their battery business being unable to develop rapidly.

After all, BYD's batteries are now mainly for its own use. Although it has also discussed supplying to other customers before.

But you are not an independent company, and your strength in all aspects cannot match that of Nanshan Battery, so you have not actually achieved any results.

This is why Lu Faxiang proposed so simply today to spin off the battery business and establish a new company.

Although even if it is spun off, everyone knows that this company will definitely give priority to ensuring the needs of BYD Auto, and may share its information with BYD Auto.

But after all, they are two companies, and some situations will still change.

The most important thing is that when introducing a new supplier, at least everyone will not think that the supplier's name is so strange.

For example, when Chery Automobile introduces a new supplier called BYD Automobile Co., Ltd., it is definitely full of violation.

Wang Fu naturally understood the situations reported by Lu Faxiang.

So after listening, he was silent for a moment and said: "If we want to spin off the battery business to find new customers and give it a better development space, then it is necessary to spin off other parts businesses as well. , re-establishing several companies to operate in the market.”

"Just like the relationship between Denso, Toyoda Gosei and Toyota Motor, we have a shareholding relationship, but we also have to compete to obtain orders."

"This will also allow external customers to more fully understand our determination to operate the subsidiary in a market-oriented manner."

When Wang Fu considers the problem, he will definitely not only consider the battery component.

Many parts of BYD's cars are produced in-house.

They have many internal divisions that make various parts and components.

Even some of the parts supplied by Nanshan Auto Parts will also be produced internally by BYD.

This situation is relatively rare in the entire Chinese automobile industry.

"We can also spin off all parts and components businesses and set up several companies separately."

"However, except for the battery business where we have obvious industry advantages, the advantageous position of other components may not be very obvious."

"Bosch, Continental, Denso, Nanshan Auto Parts and many other giants in the parts industry have obvious technical advantages in key parts."

Lu Faxiang didn't beat around the bush and directly expressed his worries.

He was the one who brought up the topic of establishing an independent company. If the final progress is not ideal, he may take the blame.

By separating the power battery, he is confident that it can become better than it is now.

But after separating other parts and components, he doesn't have much confidence in whether the business can get better.

"We definitely have no advantage in simply comparing technology."

“But if we strike a balance between technology and cost, we still have unique advantages in this regard.”

"In the early stage, we mainly communicated with various independent brands to see if we could slowly make some breakthroughs."

"Especially in Sanden parts, we still have certain advantages. Except for Nanshan Auto Parts, other manufacturers may not do better than us."

"But it is impossible for Nanshan Auto Parts to eat up all the market."

Wang Fu is not so pessimistic.

In his opinion, Lu Faxiang's proposal was quite good.

If we do well, we may be able to list these companies separately in the future.

"Well, then I will sort out the independent solution for the power battery first, and then use it as a pilot first. After all preparations are completed, I will immediately expand to other parts business?"

Although Lu Faxiang could not object to Wang Fu's idea of ​​making all parts and components businesses independent, he still wanted to prioritize the power battery business.

Wang Fu did not object to this plan anymore.

…

"Mr. Cao, our layout in lithium carbonate, nickel metal, and cobalt metal has been basically completed."

"This time we are preparing for the medium and long term, and will launch this round of hype next year based on the situation."

When various battery manufacturers and automobile manufacturers are worried and anxious about changes in the power battery supply pattern, companies in the Nanshan Group will naturally take various related actions.

Nanshan Investment, which has always had a low reputation, has been quietly making plans during this period.

Now that the layout is almost completed, Zhang Fugui brought Lin Ling over to give Cao Yang a special report.

"In addition to the price changes we feel in lithium battery-related raw materials, it is estimated that some international capital has also paid attention to changes in this area."

"You guys should be careful not to become the meat in someone else's pot."

Although this matter was proposed by Cao Yang personally, Zhang Fugui arranged the work.

But when it comes to the implementation of specific work, Cao Yang definitely has no way of keeping an eye on it.

With the rapid development of new energy vehicles, the tight supply of power batteries has initially taken shape.

Then the next stage of impact is an increase in raw material prices.

Nanshan Investment began to develop lithium and nickel mines at home and abroad many years ago. In fact, it is not too worried about changes in the price of such raw materials.

Because whether the material is rising or falling, it is ultimately the difference between the left hand and the right hand.

Of course, if we take advantage of the rise in raw material prices to increase the price of power batteries, it will definitely allow Nanshan-based companies to gain additional high profits.

This is the benefit of mastering the complete industrial chain.

However, before that, there is another amount of money that Cao Yang does not want to miss, and that is the income from the futures market.

It would be a waste not to make some arrangements when it is certain that their prices will rise.

This is obviously not in line with Cao Yang's style of doing things.

"We have more cards to play in this matter, and the possibility of being blocked by others is very low. We can even block others in turn."

"For example, we use our own battery company or raw material price company to artificially change the supply and demand pattern and raise or suppress the prices of related raw materials."

"These are all things that are entirely possible."

"And it's all within the rules."

"For example, we can significantly purchase automotive-grade lithium carbonate raw materials from various raw material companies within a certain period of time, and then simultaneously reduce the shipments of our own material manufacturers, making the supply of lithium carbonate very tight, and there will be The situation of skyrocketing prices.”

"Similarly, we can also operate in reverse and suppress the prices of related raw materials."

As the most powerful trader in Nanshan Investment, Lin Ling has rich experience in all aspects.

She definitely attached great importance to this kind of plan arranged by Cao Yang himself.

She is absolutely sure that Nanshan Investment can make a lot of money in this operation.

"Since you have confidence, then act boldly."

"It would be best to have the pricing power of key raw materials for power batteries such as lithium carbonate and lithium hydroxide in our hands through this matter."

"From now on, we are the only ones involved in other companies, and no one else has the chance to cheat us."

As enterprises in the Nanshan Group have grown to their current scale, their perspective on issues has naturally begun to change.

It is said that first-class companies set standards. This kind of control over pricing is actually equivalent to setting standards.

It is very difficult for any company that has pricing power to make losses.

As long as you don't seek death, you can basically live a relatively comfortable life.

Many of them are obviously in the raw material business, but in terms of technological content, many of them are not particularly high-tech.

But my life is much more comfortable than that of many high-tech companies.

Among the enterprises in the Nanshan system, it is obvious that there are several similar enterprises of this kind.

Everyone complements each other, and the ultimate impact it can play will be very huge.

The Nanshan Group that year became five groups, and will gradually become the Nanshan Consortium in the future.

As a consortium, it must develop all aspects of business in an all-round way.

"Don't worry, Mr. Cao, we will handle this matter properly."

"It may be difficult for us to have pricing power for other materials, but I think there are still great opportunities for materials such as lithium carbonate and lithium hydroxide used in power batteries."

"The lithium mines we directly and indirectly control now supply more than 50% of the world's lithium materials for power batteries."

When Lin Ling said this, she thought of how Cao Yang arranged for Nanshan to invest in lithium mines all over the world a few years ago.

It can be said that the admiration for Cao Yang in my heart has risen several levels.

After some things happen, everyone can tell you one, two or three. It seems that everyone is a talent and their analysis is very accurate.

But if you analyze it before it happens, few people can give very accurate conclusions that are ultimately proven correct.

This kind of thing is most obvious in the stock market.

Many people do this as an afterthought!