Chapter 903: Mastering the Pricing Power, the Beginning of Nanshan Consortium

A single move can affect the whole body.

Against the backdrop of a tight supply situation for power batteries, various battery manufacturers have stepped up their efforts to develop energy storage batteries, which will more or less bring further risks to the supply of power batteries.

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

The delivery cycle of chips is relatively long. This adjustment caused a supply crisis when the auto market recovered rapidly.

At that time, an ordinary automotive-grade chip might be 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 was originally worth only five yuan.

This is caused by a very big change in supply and demand.

Although the situation of batteries will not be the same as that of chips, where the OEM cannot get the goods from the supplier, it can be bought in the market.

But in the end, due to tight production capacity, people cannot deliver the quantity you want on time, which is very likely to happen.

Even this is something that will inevitably happen in the next one or two years.

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

Now Nanshan Battery has signed a 5GWH energy storage station project with Gouda, which will definitely make more OEMs worry that their battery supply cannot be guaranteed.

"Mr. Zhang, Aion's sales situation has been relatively stable recently, but we will soon launch new products, and the demand for batteries will increase further at that time."

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

"Otherwise, there will be a risk of not being able to guarantee delivery according to orders."

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

Zeng Guangda now focuses his main work on Yangcheng Aion and Yangcheng Trumpchi.

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

So 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 Aion, which is now the largest new energy sales company in China after Changan Automobile.

This achievement is definitely beyond many people's expectations.

After all, in the automotive industry, Yangcheng Aion's historical foundation is relatively weak, but it is a latecomer that has surpassed the competition, which is remarkable.

"The entire battery industry is in short supply, and this situation is not new."

"It is for this reason that our new project has just signed some supplementary agreements with Nanshan Battery, specifically making some supplementary agreements for the situation where the production number has not been reached."

"Now the situation has become more severe."

Zhang Jiaqi is still quite confident in Nanshan Battery and is not particularly worried.

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

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

"That's true, but I have another concern, 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 adverse impact on the supply and cost of our power batteries."

As soon as Zeng Guangda said this, Zhang Jiaqi immediately realized that he had just thought too simply.

He just thought that the production lines of power batteries and energy storage batteries were separate, and the supply impact between them was very weak.

And Nanshan Battery had made relevant plans a long time ago, so it would not be in a hurry because of some changes.

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

Now power batteries are basically ternary lithium batteries or lithium iron phosphate batteries. No matter which type of battery, it is necessary to use lithium hydroxide or lithium carbonate and other related lithium mineral products.

And in addition to lithium-related compounds, some other raw materials also have certain commonalities.

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

This means that there may 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 certainly try their best to grab the resources of these raw materials.

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

The originally stable supply has become in short supply, and price increases are almost inevitable.

And the price increase caused by this tight supply is often quite exaggerated.

For example, I am a manufacturer of lithium carbonate. The original product was 30,000 yuan per ton. Now a new customer suddenly said that it was willing to buy it at 40,000 yuan per ton. Will you sell it or not?

If there is no contract signed with the original customer, or the cost of breach of contract is relatively low, many raw material manufacturers will consider selling the materials to customers with higher bids.

In this way, it has a very bad start.

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

You rush, I rush, and it may take less than a few months for the price of lithium carbonate to soar to 100,000 yuan per ton, or even more exaggerated.

In the end, these costs must be borne by the OEM, because battery manufacturers cannot afford to absorb such a large increase in costs.

Even when rushing to buy these raw materials, they will communicate with the OEM in advance and will not rush to buy until the other party accepts the price increase.

Or if you do not accept the price increase, then I will give priority to supplying batteries to customers who accept the price increase.

It depends on whether you still want to produce.

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

Electric vehicle production is not profitable. If the price of batteries, which are the most expensive parts, continues to rise, it will definitely be very detrimental to the development of this industry.

"Has Nanshan Battery made relevant price increase requirements?"

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

The development of Yangcheng Aion must not be lost. 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 raw materials such as lithium carbonate 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 the upward trend will become more and more obvious."

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

It was precisely because he had investigated and learned some information that he was more worried.

He had a hunch that Yangcheng Aion's power battery supply problem would not be avoided in the next year.

And with the emergence of this problem, the price of power batteries will also rise sharply.

Normally, if the production cost rises, the sales price will definitely rise accordingly.

However, in the current competitive landscape of the Chinese automobile market, this logic cannot be realized.

Originally, everyone's prices were similar. Now your product price has risen, and if others have not, then consumers may go to buy other people's products.

Of course, some people may say that everyone's power battery costs must have risen, so why not raise the price together?

In this way, there is no need to worry about too much pressure.

In theory, this situation is indeed possible, but in fact it will never happen in China.

Some car companies even want to take this opportunity to eliminate their opponents and allow themselves to overtake on the curve.

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

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

Yangcheng Aion is likely to be one of the majority of manufacturers.

"Can we hedge the risk of price increase by purchasing futures of related raw materials?"

Zhang Jiaqi has been able to 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 solution to avoid this risk.

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

But slowly, its financial attributes have become more obvious.

"It is feasible in theory, but we don't have talents in this area, and we may cause greater losses if we are not careful."

Zeng Guangda said this, and Zhang Jiaqi couldn't help frowning.

This doesn't work, and that doesn't work, so are we just waiting?

But he didn't get angry.

Because he also knew that as a state-owned enterprise, if it suddenly invested in the futures market, it would be easy to say if it made money at that time, but if it lost money, it would be difficult to explain it clearly when facing various audits.

Obviously, no one is willing to take this risk.

"Let's discuss this with Nanshan Battery to 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 can't accept leaving it alone.

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

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

BYD has also felt the change in the power battery supply pattern.

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

"Mr. Wang, I think the company's battery business can be separated out to form a battery company, and then the battery company can not only supply power batteries to ourselves, but also supply to other domestic customers."

"At present, domestic new energy vehicles are developing very fast, 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 reducing costs."

"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, and manufacturers such as Xinwangda, which originally produced consumer electronic batteries, have also begun to involve in the power battery business."

"If we don't make any changes, we are likely to be surpassed by other power battery manufacturers."

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

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

Not to mention the first in the industry, they don't even have a place in the top three in the industry.

This has led to their battery business not being able to develop rapidly.

After all, BYD batteries are mainly used by itself now, although the issue of supplying to other customers has been discussed before.

But you are not a separate company, and your strength in all aspects is not comparable to Nanshan Battery, so you have not actually achieved any results.

This is why Lu Faxiang proposed today to separate the battery business and establish a new company.

Although even if it is separated, everyone knows that this company will definitely give priority to BYD Auto's needs 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 it will not make everyone feel that the name of this supplier is so strange.

For example, Chery Automobile introduced a new supplier called BYD Auto Co., Ltd., which is absolutely full of disobedience.

Wang Fu naturally understood the situations reported by Lu Faxiang.

So after listening to it, he was silent for a moment and said: "If you 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 and re-establish several companies to operate in the market."

"Just like the relationship between Denso and Toyoda Gosei and Toyota Motor, everyone has a shareholding relationship, but they also have to compete to get orders."

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

Wang Fu will definitely not only consider the battery part when considering the problem.

BYD's cars have many parts produced by themselves.

They have many business units that make various parts.

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

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

"It's OK to separate all the parts business and set up several companies separately."

"However, except for the battery business, we have a relatively obvious industry advantage, and the advantage of other parts may not be very obvious."

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

Lv Faxiang did not beat around the bush and directly expressed his concerns.

He was the one who proposed the topic of setting up an independent company. If the final progress is not ideal, he may have to take the blame.

He is confident that the power battery can be separated and become better than it is now.

But after separating other parts, he is not too confident that the business can be better.

"We definitely don't have an advantage in terms of technology alone."

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

"In the early stages, we mainly communicate with various independent brands to see if we can gradually make some breakthroughs."

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

"But Nanshan Auto Parts can't eat up all the markets."

Wang Fu is not so pessimistic.

In his opinion, Lv Faxiang's proposal is still good.

If it is done well, these companies may be listed separately in the future.

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

Although Lv Faxiang could not oppose Wang Fu's idea of ​​separating all parts businesses, he still wanted to give priority to the power battery business.

Wang Fu did not object to this plan.

...

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

"This time we are going to do it in the medium and long term, and we will launch this round of hype next year according to the situation."

When various battery manufacturers and automobile manufacturers are worried and anxious about the changes in the power battery supply pattern, there will naturally be various related actions within the Nanshan Group's enterprises.

Nanshan Investment, which has always been unknown, has been quietly laying out during this period.

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

"In addition to the price changes of raw materials related to lithium batteries that we have felt, it is estimated that some international capital has also paid attention to the changes in this regard."

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

Although this matter was arranged by Zhang Fugui after Cao Yang personally proposed it.

However, Cao Yang certainly had no way to keep an eye on the specific implementation of the work.

With the rapid development of new energy vehicles, the tight supply pattern of power batteries has been initially formed.

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

Nanshan Investment began to lay out lithium and nickel mines at home and abroad many years ago, and was actually not too worried about the changes in raw material prices.

Because whether the materials rise or fall, it is ultimately the difference between the left hand and the right hand.

Of course, if the price of power batteries is also raised by taking advantage of the opportunity of the rise in the price of raw materials, it will definitely allow Nanshan companies to obtain additional high returns.

This is the benefit of mastering the complete industrial chain.

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

If you are sure that their prices will rise, it would be a waste if you don't make some arrangements.

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 is very low. We can even block others in return."

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

"These are all completely possible."

"And this is all within the scope of the rules."

"For example, we can find various raw material companies to purchase automotive-grade lithium carbonate raw materials in a large scale within a certain period of time, and then simultaneously reduce the shipment volume of our own material manufacturers, so that the supply of lithium carbonate becomes very tight and the price skyrocket."

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

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

She absolutely attaches great importance to this 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 go ahead and do it."

"It would be best if we could control the pricing power of key raw materials for power batteries such as lithium carbonate and lithium hydroxide through this matter."

"In the future, we will only have the share of other companies, and no one else will have the opportunity to cheat us."

As Nanshan's enterprises have grown to their current scale, the perspective of considering issues has naturally begun to change.

It is said that first-class enterprises set standards, and this kind of mastery of pricing power 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 commit suicide, you can basically live a relatively comfortable life.

Many of them are obviously engaged in raw material business, and in terms of technological content, many of them are not particularly high.

But they live a much more comfortable life than many high-tech companies.

Among the Nanshan enterprises, it is obvious that there is a need for the existence of several similar enterprises.

Everyone complements each other, and the role that can be played in the end will be very huge.

The Nanshan Group at that time 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 definitely handle this matter properly."

"It may be difficult for us to have pricing power for other materials, but I think there is still a great opportunity 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 lithium materials for power batteries in the world."

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

Her admiration for Cao Yang can be said to have risen several levels.

Some things, after they happen, everyone can tell one, two, three, as if everyone is a talent and the analysis is very accurate.

But if you are asked to analyze before it happens, few people can give a very accurate conclusion that is finally proven to be correct.

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

Many people are hindsight!