Rebirth 99 to become a car giant

If you want to check the situation of an American company, it may be inefficient to check Yingang Trading or Nanshan Group companies yourself.

But after Hu Yingang told Zhao Siyu about the strange order, he immediately asked Pan Jun to help find relevant departments to assist in the investigation.

In the end, the situation was quickly figured out.

Although some information is not particularly clear, the situation in each chain is generally clear.

"Mr. Cao, judging from the current situation, this is completely the work of a white-glove company established by powerful figures from relevant departments in the United States."

"Tens of millions of dollars in gallium nitride power components should be used in the new generation of electronic reconnaissance ships produced by Northrop Grumman."

"I estimate that the performance of the 915 electronic reconnaissance ship in the southern waters has brought them a lot of excitement."

After Zhao Siyu figured out the situation, he immediately went to report to Cao Yang.

Although I had previously thought about controlling the export of Nanshan Semiconductor’s gallium nitride power components.

But these things definitely depend on the situation.

If there is no way to produce gallium nitride power components in the United States, then they must use various methods to prevent their products from being bought by American companies.

But now companies in the United States can actually produce gallium nitride power components, but the production efficiency is lower and the cost is higher.

In this case, Nanshan Semiconductor's export restrictions will naturally become much more flexible.

Regardless of whether the money is earned or not, the U.S. electronic reconnaissance ships will eventually use gallium nitride power components.

In this case, it would be better for Nanshan Semiconductor to earn this money.

The profit margin for this kind of export orders is definitely much higher than those sold to Aerospace Technology and AVIC.

"They move very quickly."

Although Cao Yang was a little surprised by what Zhao Siyu reported, he didn't think it was strange after thinking about it.

People who are used to being the boss in the world will never allow others to challenge their status easily.

Now that China is rapidly rising in the field of electronic reconnaissance ships, the United States must follow suit and make some noise.

Although the electronic reconnaissance ship that was paralyzed during the exercise was not considered an advanced product in the American system, they had more powerful warships that did not participate in the exercise.

But combined with the results of the electronic countermeasures in that exercise, even if they sent out their most advanced electronic reconnaissance ships, they were not confident of victory.

It's not easy to even get a tie. At most, you won't lose so miserably.

This situation is obviously not acceptable to them.

Although the situation of the 915 electronic reconnaissance ship is kept secret from the outside world, if the United States is determined to inquire, it can still get some information.

Therefore, it was inevitable that people would immediately start using gallium nitride power components on a large scale to produce related equipment and remodel an electronic reconnaissance ship.

"Mr. Cao, during the course of this investigation, we also discovered an interesting thing."

"That is, one of the companies involved in this transaction has purchased a lot of drones from DJI. Many of these drones have gone to relevant departments in the United States."

"The most exaggerated thing is that the final sales price of those drones is almost ten times the export price from DJI."

Zhao Siyu did not make any detours and directly told Cao Yang all the information he had learned.

Of course, when he told this matter, he didn't just tell it as a joke.

Rather, he wanted to use this incident to make Cao Yang understand that these white glove companies in the United States import parts from Nanshan-based companies and then sell them to relevant departments. There seems to be no need to eliminate this kind of business.

After all, this is a win-win result for the companies in the Nanshan Group and the white gloves of the United States.

Anyway, even if these things are not purchased from China, they can actually produce similar products in their own country.

It's just that the purchasing cost may be higher.

It seems that companies in the Nanshan Group are helping relevant departments in the United States save money, and this cannot be done.

In fact, taking this opportunity to completely suppress the relevant industrial chains in the United States will have a huge impact in the long run.

One day in the future, if people discover the situation of white glove companies and think about switching to domestic procurement, it will definitely be more difficult than it is now.

"In this case, then the business of Yingang Trading can be carried out normally."

"But in terms of price, the selling price to the United States can be appropriately increased in the future."

"Anyway, even if the price doubles, it's still a very cheap price for them."

"There is no need to let money go without making money."

Now let’s squeeze the living space of other gallium nitride power component companies and reduce their demand.

In a few years, if Cao Yang suddenly interrupts the supply of related components, it will definitely make the other party uncomfortable.

Of course, when and whether to do this kind of thing will definitely depend on the needs of the development of the situation.

…

Throughout April, Cao Yang and the others focused a lot of their attention on the 915 electronic reconnaissance ship and a series of related matters.

But for many people, they are simply not in the mood to pay attention to these things.

Because the prices of raw materials used in power batteries, such as lithium carbonate, lithium hydroxide, nickel, and cobalt, have skyrocketed this month.

Different from the previous few points of increase, these materials have generally increased by 20% to 30% this month.

For a kind of raw material, the price has increased by 20 to 30% in one month, which is definitely a very exaggerated increase.

Power batteries are the most expensive component of electric vehicles, and raw materials account for the largest proportion of the cost of power batteries.

The price increased by several percent, and many people immediately felt the crisis.

"Mr. Lin, although the price of raw materials has risen sharply this month, no one is sure whether it is sustainable."

“Isn’t it a little early to start discussing price increases now?”

As the deputy general manager of Changan Automobile, Zhang Lin was discussing the battery price increase with Lin Chengzai, the visiting general manager of Nanshan Battery.

In the past, the prices of various materials were relatively stable. After everyone set the price of the entire battery pack, there was basically no price adjustment.

Of course, except for the effect of annual price reduction negotiations.

Under this circumstance, Nanshan Battery proposed to adjust the raw material prices of batteries, but many companies are definitely unwilling to do so.

After all, the so-called price adjustment is actually a price increase.

Even if they know that the prices of relevant raw materials on the market are indeed rising, they are not happy.

No company is happy to see its costs increase.

"Mr. Zhang, according to our current plan, it is recommended to adjust the battery material price every quarter."

"For example, the prices in the third quarter will be adjusted based on the average price in the second quarter in early July, and so on. Each quarter, the prices of the previous quarter will be used to adjust material prices."

"When prices go up, we go up with them; when they go down, we lower prices at the same time."

"In this way, it is a reflection of market price fluctuations."

Since Lin Cheng has officially put forward the plan and is preparing to take the upper-level route and communicate directly with Zhang Lin, who is in charge of the specific business, he naturally hopes that this matter will be finalized as soon as possible.

Otherwise, it is estimated that the discussion on the connection between Nanshan battery sales and Changan Automobile's procurement will be fruitless for several months.

People can use various methods to delay, or assign homework to you, which will delay the time for a long time.

This is obviously not a situation Nanshan Battery wants to see.

According to Nanshan Battery’s estimates, the rise in prices of raw materials such as lithium carbonate is definitely not something that just happens this month.

In the next one or two years, the prices of these raw materials are likely to continue to rise.

Even if there is a drop in the middle, it is impossible to return to the previous low price.

After all, the development speed of new energy vehicles is too fast.

Objectively speaking, the supply situation of relevant raw materials is indeed a bit tense.

Coupled with the capital fueling the situation, the final impact will be even greater.

Of course, Lin Cheng would definitely not share all this information with Zhang Lin.

"Mr. Lin, in business negotiations, normally we have negotiated the price of power batteries before. Whether it is an increase in material prices or a decrease in material prices, this is a matter for Nanshan Battery to be responsible for its own profits and losses."

"Now that prices have risen, you are asking for market linkage of material prices. It seems fair, but in fact it may not be the case."

"If material prices drop significantly this year, I believe Nanshan Battery will not take the initiative to link material prices with market conditions and provide us with additional price reduction contributions, right?"

Zhang Lin said a little unhappy.

In his opinion, Nanshan Battery's approach is a bit excessive.

Of course, this kind of thing is completely decided by the butt.

From the perspective of Nanshan Battery, the price of raw materials in the market has increased, and I request an adjustment in the price of battery packs. This is also a normal market behavior.

We can't provide you with parts at a loss, right?

"Mr. Zhang, in fact, when we made the earliest quotation, we had already clarified the material timing of various raw materials used at that time."

"And we have specially noted that Nanshan Battery needs to adjust the cost of battery packs based on changes in market raw material prices."

"This is a relatively common situation in the industry."

"Just like the hot stamping parts provided by Yangcheng Huaqiang Factory, the price of raw materials must be adjusted regularly."

"Some parts such as aluminum wheels also have regular material price adjustments, right?"

"And looking at the entire industry, whether it is Toyota, Volkswagen or other car companies, they will link the prices of some raw materials to market conditions."

Lin Cheng knew that in this kind of negotiation, the other party would not immediately agree to it as soon as he made a request.

Regardless of whether they can accept it or not, there must be some resistance.

Otherwise, he would not be able to communicate within the company.

So no matter what Zhang Lin said, he was not angry.

But he will not change Nanshan Battery’s attitude.

In the context of the substantial increase in the price of battery raw materials, he believes that not only Nanshan Battery will make such demands, but other battery manufacturers will certainly do the same.

Otherwise, it would simply not be able to withstand such a large-scale increase.

It’s nothing more than other battery manufacturers, maybe we’ll mention it later.

After all, the price of raw materials for batteries is not rising now, but the price of materials used in production will rise immediately.

Because these materials are ordered some time in advance, each manufacturer will also have some inventory.

Therefore, there will be a certain lag in price changes in the market before they are reflected in the actual materials used.

This is why Lin Cheng just proposed to use the market price of the previous quarter to adjust the price of this quarter.

"What you said may be true, but for those parts that are currently undergoing material adjustment, the material adjustment rules have been determined by both parties before our products are mass-produced."

"For example, for parts such as battery packs, although you included some terms and conditions when quoting, the two parties did not reach an agreement."

“In our view, this is more like a unilateral claim by Nanshan Battery.”

"I think it will ultimately be determined based on the communication between the two parties."

Zhang Lin continued to refute Lin Cheng's words.

But in fact, he also knew that his rebuttal was a bit weak, and he would definitely agree to Nanshan Battery's plan in the end.

On the one hand, Nanshan Battery’s proposition is not a rash attempt to bully Changan Automobile, but is based on objective market conditions.

On the other hand, Nanshan Battery is currently the only battery supplier of Changan Automobile. If Changan Automobile does not agree to the price increase, the other party can make a fuss about the guarantee of parts supply.

This year, Changan Automobile is focusing on promoting two electric vehicles, Changan MINI and Changan Star, which are aiming to hit the number one sales volume in the electric vehicle industry this year.

"Mr. Zhang, we actually have another proposal for your reference."

Seeing everyone talking about things on two parallel lines, Lin Cheng did not keep arguing with Zhang Lin, but changed another dimension to discuss with the other party.

"Some current OEMs will negotiate prices with material manufacturers, and then ask component manufacturers to purchase from raw material manufacturers at the specified price."

"Or it can be said that the OEM buys it directly and gives it to the supplier for use."

"In this way, the OEMs also need to worry about us as suppliers making money in terms of raw material prices."

"The overall demand of OEMs is often relatively large, and sometimes they can give full play to their special advantages."

"I think a similar method can be used for the main raw materials of our batteries?"

Although he knew that Changan Automobile could not buy cheaper raw materials than Nanshan Battery, Lin Cheng still proposed it.

This can also be regarded as a means of business negotiation.

It seems like the initiative has been given to the other party, but in fact the other party simply has no better choice.

Overall, there are several solutions provided to the OEMs, which will not make the OEMs think that you are too strong a supplier and difficult to deal with.

But in fact, nothing has changed in essence.

Sure enough, after listening to Lin Cheng's words, Zhang Lin said very depressedly: "Nanshan Battery is the world's largest power battery manufacturer, and you must have greater bargaining power on lithium carbonate and other materials."

"If you can't purchase low-price raw materials, it will be even more difficult for us at Changan Automobile."

We are all old acquaintances, so it doesn't matter what we say.

However, Lin Cheng also knew that the other party must be unhappy, so when it came to the end, he gave another step.

"Mr. Zhang, actually facing this current situation, we are also having a headache."

"The development speed of new energy vehicles in China and even the world is too fast, which will have a greater stimulating effect on the price of power battery raw materials."

"It is likely that prices will continue to rise in the future, so we can only raise this issue."

"Of course, we can also understand Changan Automobile's difficulties."

“In today’s electric vehicles, the cost of power batteries is already very high, and the entire electric vehicle is almost unprofitable.”

"So our company is actually thinking about how to reduce the cost of power battery packs."

When Lin Cheng said this, Zhang Lin's face really looked much better.

This is the attitude a normal supplier should have.

How can we poke the lungs of the OEM all the time?

"Mr. Lin, do you have a specific price reduction plan?"

"If this price reduction plan can make up for the increased cost of material changes, we are not unable to agree to adjust the material price."

Zhang Lin also breathed a sigh of relief.

The conditions are getting closer step by step, and everyone needs to consider how to make concessions.

"Due to energy density, ternary lithium batteries are currently commonly used in passenger cars in the industry."

"Only commercial vehicles such as buses and coaches and a small number of passenger cars will consider using lithium iron phosphate batteries with lower energy density."

"However, compared with ternary lithium batteries, lithium iron phosphate batteries require much less lithium carbonate."

"So in the context of rising prices for this material, the cost advantage of lithium iron phosphate batteries has become even more obvious."

"We at Nanshan Battery have not given up research on lithium iron phosphate batteries in recent years."

"The electric buses and electric buses produced by Yangcheng Nanshan Commercial Vehicle are now selling well both at home and abroad, and most of the batteries are lithium iron phosphate batteries."

"Now we have achieved a new technological breakthrough in lithium iron phosphate batteries, which has greatly reduced the energy density difference between lithium iron phosphate batteries and ternary lithium batteries."

"Using lithium iron phosphate batteries can also increase the cruising range of passenger cars to more than 500 kilometers."

Lin Cheng had prepared many tricks to deal with Changan Automobile today.

There are soft and hard ones, it’s up to you to choose.

Nanshan Battery has so many customers. Except for important customers such as Changan Automobile, which he negotiates personally, other customers are negotiated by the sales staff below.

But some negotiation strategies must have been discussed many times within the company.

How to deal with OEMs and what negotiation strategies should be adopted have all been discussed before.

Now it's just a matter of using various tricks step by step.

"Lithium iron phosphate battery?"

Zhang Lin's eyes lit up. If the performance of lithium iron phosphate batteries can meet the performance requirements, then it can really be considered.

For models such as Changan MINI and Changan Star, consumers who buy them basically don't pay attention to whether the battery is a lithium iron phosphate battery or a ternary lithium battery.

"If we use lithium iron phosphate batteries, can the cost be a little cheaper than the previous ternary lithium batteries before the material price was adjusted?"

For electric vehicles, the importance of battery cost cannot be overstated.

If the cost of this part is not competitive, it basically means that the entire vehicle is not competitive.

"It should be possible, but although the cost of lithium iron phosphate batteries is relatively low, the price of materials also has a certain impact, so in the end it will not be much cheaper than the previous ternary lithium batteries."

Lin Cheng didn't make the cake too big.

After all, no matter which technical solution the battery is, it is affected by rising material prices.

It's just that ternary lithium is more affected, and it is already more expensive, so it can reflect the cost advantage of lithium iron phosphate batteries.

"I will arrange for the R\u0026D personnel to have a good discussion with you later to see if the batteries of some models can be changed to lithium iron phosphate batteries."

"However, it is unlikely that all of them will be replaced with lithium iron phosphate batteries in a short period of time."

"Do you have any cost reduction plans for current ternary lithium batteries?"

Zhang Lin also knows that even if lithium iron phosphate batteries can be used in the future, it will take time.

Various preparations and test confirmations will definitely not be used until next year.

If we keep focusing on this topic, we will be led astray.

How to reduce the cost of ternary lithium batteries is what needs to be considered most now.

"Of course there is!"

Lin Cheng gave an affirmative answer without any hesitation.

As the main technical direction of Nanshan Battery, technical research related to ternary lithium batteries is definitely the top priority of Nanshan Battery.

After so many years, it would be false to say that it has no effect at all.

The company has so many R\u0026D personnel and registers so many patents every year. It’s almost time to show them off.

"In current ternary lithium batteries, the ratio of nickel, cobalt and manganese is generally 3:3:3. In our industry, it is commonly known as 333 ternary lithium battery."

"We all know that the price of nickel is much cheaper than that of cobalt, and the price increase of cobalt during this period is also much greater than that of nickel."

"So how to increase the proportion of nickel and reduce the proportion of cobalt is a good direction for reducing the cost of ternary lithium batteries."

"As long as we can move in this direction, we can reduce the cost of battery production and also significantly increase the energy density."

"Today, our Nanshan Battery has successfully mass-produced 523 ternary lithium batteries and is doing forward-looking research and development of 811 ternary lithium batteries."

"If Changan Automobile's new cars use 523 ternary lithium batteries, it can effectively hedge against the impact of this material price increase."

Lin Cheng did not fool Zhang Lin, but actually came up with some solutions.

Although these plans cannot be implemented immediately by Changan Automobile, compared with the lithium iron phosphate plan just now, they can be changed much faster.

It doesn’t even matter the size of the battery pack. Just replace the battery cells and simultaneously upgrade the battery management system and other peripheral parts.

For Changan Automobile, this is obviously still very attractive.