From the battery to the points and then from the vehicle program Wang Chuanfu and Wei Jianjun have a "new cooperation"

There is almost no sign. At noon on March 21, the radio in the Great Wall Motor (601633.SH) plant rang and announced to all employees that the company’s chairman, Wei Jianjun, had to receive important visitors and asked Gaohuan and Test Mountain to ban any vehicles from entering. Violators were heavily penalized. Shortly afterwards, the answer was revealed that the company's chairman, Wang Chuanfu, from Shenzhen BYD Company (002594.SZ) came to Baoding. After Wang Chuanfu and Wei Jianjun chatted in the afternoon, they also tested the WEY P8 new energy SUV under the Great Wall.

The encounter between the two car bosses was spectacular. It was speculated that Wang Chuanfu’s personal visit was intended to sell the company’s batteries to the Great Wall – in the past 2017, the battery company in Fujian exceeded the BYD in the Ningde era and became the world’s largest battery distributor, and the Ningde era won successively. A number of car companies' battery orders, including BMW, Volkswagen, and even BYD's partner Teng Shi, will not unexpectedly exceed BYD's market value if this year's Ningde era is successful.

This made BYD feel a lot of pressure. Wang Chuanfu himself also started to reflect on this. Wang Chuanfu said in an internal speech that the strategy for establishing a vertical system and forbidding the sale of batteries to foreign companies was not correct. In the second half of 2017, Wang Chuanfu began brewing batteries and other parts to the outside world. "To learn the lessons of Nokia's collapse due to strategic mistakes and change the relatively closed business model of traditional car companies." Wang Chuanfu recently said that after internal discussions, BYD decided to open its own smart development platform.

However, no matter how it changes, the first question it faces is how to find a buyer for BYD batteries. For many car companies, buying BYD's battery seems to mean risk - BYD's own vehicle manufacturing business has become the key to opponents taboo. But this time the meeting may not be Wang Chuanfu's first proposal.

The Economic Observer reporter learned that this is not the first contact between the Great Wall and BYD. Not long ago, this meeting in Baoding, Wei Jianjun has sent people to BYD headquarters in Shenzhen, "learning by" and contact, "in the BYD's six-story building, the visit of the Great Wall people BYD is no secret." Informed sources told reporters. For Wei Jianjun, he has an urgent need to meet Wang Chuanfu, and to conduct a frank and sincere exchange with the latter.

The Chinese auto industry will formally begin to implement the assessment of the average fuel consumption in the “double-integration” policy (ie, average fuel consumption and new energy vehicle points) in April. The Ministry of Industry and Information Technology announced in March 2016 the calculation of car value in 2016. Great Wall Motors has already carried a huge amount of points, and its average fuel consumption negative points have reached 234,500, but the new energy points are only a few hundred. In 2019, the assessment of new energy points will also begin, and Great Wall Automobile's pressure will further increase. As the world's largest manufacturer of new energy vehicles, BYD holds a large number of new energy vehicle points, totaling nearly 300,000 points.

Great Wall "Going Out" with BYD from Closed to Open

Under the background of the era when the self-owned car companies are moving toward a new stage, different car companies have made different choices. Obviously, this time holding hands will not only give BYD and the Great Wall a precious opportunity to rectify the already lost strategy. On March 21st, Wei Jianjun did not appear on the listing site of its heavy-duty model H4, and the next day appeared on the groundbreaking ceremony of Great Wall Motor’s production base in Yongchuan, Chongqing. The construction of Chongqing Yongchuan's production base was the first step of Great Wall Motor’s official call “Great Wall Motors”.

The problem with the growth of Great Wall Motors is that due to the start of Baoding City, almost all of its investment has been placed in Baoding, but it is necessary to grow into an international company in the heart of Wei Jianjun. This is a very conservative decision. Although Great Wall Motors has a branch in Beijing, it is basically a form. At the production base, the Great Wall never walks far away from Baoding. Setting up a base in Yongchuan is a step in the true sense of the Great Wall. From Wei Jianjun himself, there are also opinions on new energy vehicles.

In February of this year, Great Wall Motors announced the cooperation with BMW MINI. The cooperation between the two sides was set as a new energy vehicle. In fact, for a long period of time, Wei Jianjun has been seriously questioning new energy vehicles. Although he is also in the field of new energy vehicles, he is still shelling new energy vehicles, "pseudo-environmental protection." The Great Wall, which was not listed on the new energy real vehicles in previous years, was left behind by BYD and others, both at the technology and market levels.

Great Wall Motor released a new energy vehicle development plan in 2018. According to Wang Fengying, president of Great Wall Motor, Great Wall plans to sell 2 million cars in 2025, 700,000 of which will be electric vehicles, which accounts for one-third of annual sales. In addition, Great Wall Motor will plan to invest 20 billion yuan in research and development of electric vehicles by 2020. The Economic Observer reporter learned that Great Wall Motor officially announced the establishment of a new electric vehicle research and development center in Austria, and plans to increase the investment for this center to 20 million euros (157 million yuan) by 2020. The outside world is not optimistic about Great Wall Motor’s practice of placing an electric vehicle R&D center in Austria, which has a very low electric vehicle penetration rate. Especially in the development process of Great Wall Motor's promotion of the core components of electric vehicles, as the core of the core components of electric vehicles, the power battery has not made much progress.

From April onwards, the "double-integration" policy assessment will be officially launched. In the face of this severe assessment, the consequences for non-compliance companies are serious, and even adjustments to the passenger car production or import plans are required. Otherwise, the “Announcement of Road Motor Vehicle Manufacturing Enterprises and Products” of the Ministry of Industry and Information Technology will not be accepted. Whether it is the new energy points that are urgently needed by Great Wall Motors or its critical new energy core technologies such as power batteries, BYD, which possesses the aforementioned dual advantages, seems to have become the best choice for Great Wall Motors' cooperation.

For BYD, the Great Wall has also demonstrated its unique significance. Although GAC and BAIC and other companies have already reached an agreement with BYD, BYD's road to “bike” the battery is still difficult to make. BYD urgently needs a truly heavyweight partner to break the deadlock in the battery field, and the Great Wall, which has annual sales of more than 1 million fuel vehicles, is a great choice for the few new energy vehicles. This is like a good fate of "wrong wedding sedan married to Lang".

For BYD, further opening is on the road. The Economic Observer reporter was informed that BYD's split-power battery business plan has been approved by Wang Chuanfu and the management team. After the follow-up announcement process, splitting the market has become an excellent choice. "At present, BYD's PV and power batteries belong to the second division, and the power battery and PV splitters will soon be on the market. BYD has been docking the major automotive OEMs in the power battery field, and it is sure to continue to advance toward the market. "The insider of BYD told the Economic Observer reporter.

In fact, BYD's opening to the field of power batteries is on the one hand to seek new growth points, and on the other, it is also to occupy the power battery industry standard formulation and output. “BYD's pace of opening up will be faster than everyone imagines. Whether it is a traditional car company or an internet car maker, BYD hopes to achieve strategic cooperation, and it is not just cooperation in the field of power batteries, in many core technologies and parts and components. , BYD are willing to cooperate." The insider said.

Great Wall or Buy BYD Package

The two car owners hold hands together, cooperation may not only be limited to the business of power batteries and new energy points, it may also be a precedent for in-depth cooperation between auto companies. The Economic Observer reporter learned that Great Wall Motor has made clear in its recent performance announcement that it will consider using BYD's power battery. "Prices are talking about, because the battery supply capacity and cycle time, as well as the price and other factors are critical, in the implementation of these details." The informed sources disclosed.

At present, the planning and brand layout of Great Wall Motor's new energy vehicle product layout is being accelerated. The Economic Observer reporter learned that at the upcoming Beijing auto show, Great Wall Motor will officially release its pure electric brand "Eura" and its new energy vehicle and shared travel brand "Eurale Trip". In the high-end models of new energy vehicles, Wang Yufu's WEY's first new energy model, the P8, will also officially appear. Under the overall layout of new energy automotive products, Great Wall Motor’s demand for BYD's power batteries will further accelerate.

In addition, the Economic Observer reporter was exclusively informed that BYD intends to package its cooperation with Great Wall Motors in the field of new energy vehicles. "At present, BYD promotes its power battery by providing a comprehensive core auto parts promotion and technology exchange meeting. It is not just power batteries. Core technologies such as motors, electronic controls and chassis are also being promoted in cooperation," a source revealed. The Economic Observer reporter learned that on March 28, BYD will hold a similar core auto parts promotion and technical exchange meeting at the Beijing New Energy R&D building.

In addition to the peddling of spare parts, BYD prefers to "sell" its own platform. In March 2018, BYD convened a car developer conference, which opened its entire vehicle platform and sensors. BYD said that under the premise of platform agreement standards, global developers can participate in designing various kinds of featured software required by users. For example, BYD provides control of various configurations of vehicles, air conditioners, sunroofs and so on. The foreign developed system controls. This will be an attractive technology for Great Wall and others.

For Great Wall Motors, BYD, which holds a large number of new energy points, has taken a certain initiative. Wei Jianjun may choose to cooperate with BYD in the field of new energy vehicles in the face of new energy points that are highly attractive and worth trading. At present, the new energy vehicle points a value of 800-1000 yuan. However, with the depletion and reduction of points, the price of points will increase. No one can reach 6,000 yuan a year. It is expected that if the sales volume of fuel vehicles in the market remains the same, the maximum score can reach 8,000 yuan. This will be a huge expenditure.

In addition to the new energy points and the cooperation of new energy core components, the Great Wall Motor’s previous visit to BYD could still reveal some clues. On the same day that Great Wall Motor related people visited BYD, Shanghai Sizhi Automotive Engineering Technology Co., Ltd. (hereinafter referred to as “Shanghai Sizhi”) also appeared in the Hexagon Building at BYD headquarters. It has been speculated that Shanghai SiZe, as a company that provides services and support for dynamic performance testing and development in the automotive industry, has emerged with Great Wall Motor, and the possibility of BYD and Great Wall Motors launching full vehicle cooperation has begun to surface.