Chapter 1000
The Real Capital Market, Confident and Proud Netizens
Cooperation is a two-way street. While Galaxy Technology has placed higher demands on BYD, it has also provided more benefits.
Otherwise, the boatman wouldn't have been so easy to talk to and readily agreed to Liao Qingfeng's conditions.
In the end, the two reached an agreement.
Fudi Battery will cooperate with Galaxy Energy's management standards and compensation system, and the cost of production line upgrades will be shared according to equity ratio.
The R&D team needs to retain some autonomy, and BYD's own battery technology also needs to continue to move forward. It cannot rely entirely on the Xuanwu battery.
Fudi's contract manufacturing of Xuanwu batteries is limited to usage rights only; the core patents remain with Galaxy Technology.
Boatman is the founder of BYD, and Liao Qingfeng also has Wang Donglai's trust and arrangements, so making decisions becomes very simple.
Once these key points are agreed upon, the subsequent details can be handled by the staff below.
After seeing the boatman off, Liao Qingfeng went to see Zeng Qun.
CATL's relationship with Galaxy Energy predates and is deeper than that with Fudi.
He was the first to do OEM manufacturing for Xuanwu Battery, and also the first to be told by Wang Donglai to his face that his "wage was too low".
He did raise salaries after that, and employee benefits improved significantly. This demand thoroughly offended Zeng Qun.
Zeng Qun only refrained from turning against them because of the potential benefits.
They're all super-rich; who wouldn't have a temper?
In the past, when we were on good terms, Zeng Qun would restrain his temper and lower his head; it was nothing unusual.
But that's not necessarily the case now.
Liao Qingfeng was not optimistic about his meeting and conversation with Zeng Qun.
Zeng Qun sat opposite Liao Qingfeng, his hands clasped together on the table.
He sat upright, his eyes were fixed on him, but he didn't speak.
After Liao Qingfeng made his point clear, he did not follow the paved steps down like the boatman.
The silence didn't last long, but every second increased the pressure.
"Mr. Liao, neither of the two paths you just mentioned, full acquisition or controlling stake, is an acceptable route for me."
Zeng Qun finally spoke, his voice calm but carrying a hint of pressure.
“CATL and Galaxy Energy have been working together for a long time, with the volume of contract manufacturing constantly increasing and the quality remaining consistently stable. CATL attaches great importance to these collaborations and has invested significant resources to ensure delivery.”
"Mr. Liao, you requested that the management standards of the contract manufacturing lines be aligned with yours, and we did that; you requested higher wages and social security contributions, and we did that too. But the proposal you put forward today touches upon CATL's most core issues: equity and control. I cannot accept it!"
Zeng Qun's refusal was very decisive, clearly indicating that he had been mentally prepared for it.
Judging from his expression, he had probably been thinking about it for a long time.
Perhaps Zeng Qun had already considered this a long time ago.
Liao Qingfeng naturally wouldn't just go along with Zeng Qun's words so easily, so he said, "President Zeng, I understand your concerns. But I need to make it clear to you that this is not just a matter of expanding the scale of OEM manufacturing."
"As soon as the second-generation battery came out, global production capacity demand exploded. At the negotiation meeting, there were 30 billion yuan of letters of intent in front of us. We are now building our own factories in Shenzhen, Chengdu and Chongqing at the same time, and discussing in-depth transformation with contract manufacturing partners who are willing to accept equity cooperation."
"The priority of capacity expansion is not my decision alone, but a logic driven by market demand. If CATL cannot accept the equity investment, then the future OEM share will gradually shrink. This is not a punishment, but an inevitable result of resource allocation."
After hearing this, Zeng Qun did not, as many people in this position would, begin to try to appease or evade the issue.
He slowly sat up straight, took his hands off the table and placed them on his knees, then spoke, his voice carrying a hint of determination: "CATL's business structure is rather unique. We are involved in both battery production and sales, as well as battery recycling and materials. These are our own foundations. As for equity investment, we would actually welcome a closer relationship with your company, but your company is asking for too much."
Liao Qingfeng looked at him without saying anything, but slowly picked up his teacup and took a sip.
Zeng Qun's expression remained unchanged as he continued, "President Liao, could we put the investment matter on hold for now?"
"Why don't we first expand our OEM scale, make a longer-term plan for the next generation of products, and then renegotiate after the business structure is adjusted and some projects become clear?"
Liao Qingfeng laughed, a hint of mockery in his smile.
“CATL is a great partner, and our OEM cooperation has been excellent over the past year. But I must make it clear to you that the cooperation model must move forward. If CATL cannot accept equity investment, our future OEM share will be gradually reduced, prioritizing the capacity utilization of our own factories and the partners who accept equity investment.”
Zeng Qun's eyes flickered.
He knew this was the truth, of course. Galaxy Energy couldn't afford to bet too much on a partner who only cared about short-term contract manufacturing profits and was unwilling to accept a deeper level of commitment.
He remained silent for a long time, his fingers tapping lightly on the table in a slow and heavy rhythm.
The meeting room was so quiet that you could hear the ticking of the clock on the wall.
"Mr. Liao, how long has CATL been cooperating with Xuanwu Battery? During this time, we have consistently delivered orders with high quality and quantity. I know that the technology and standards are yours, but CATL's production lines, equipment, and workers were also built brick by brick by ourselves."
"I know your company has been working hard to improve employee benefits, but frankly, this is just wishful thinking on your part."
“Our market is here, our working environment is here, and you insist on being different from everyone else, trying to control everyone and every company with your standards.”
"Many companies and bosses agreed to your terms for the sake of profit, but isn't this behavior a form of hegemony?"
"Those who listen to you will have food to eat, those who don't will not. How domineering!"
“I value the cooperation with Galaxy Technology very much, not only because your company offers more discounts, but also because your company’s technological research and development capabilities are leading the world, which I personally admire very much.”
"However, as a businessman, I do not agree with your company's development strategy."
“Before, I was willing to bow my head, but now I am not.”
"If your company cancels the cooperation for this reason, I will not go back on my word!"
Zeng Qun's words were resolute and unequivocal.
He had already thought it through: while Xuanwu batteries have excellent performance, they may not be available in the global market.
In addition to the high-end market, there is also a huge mid-to-low-end market.
While the high-end market offers higher unit prices and profit margins, the mid-to-low-end market is much broader. With a strategy of low profit margins and high sales volume, profits may still be substantial.
After hearing Zeng Qun's words, Liao Qingfeng had only one thought in his mind: those who walk different paths cannot make plans together!
With a sigh, Liao Qingfeng said, "Since President Zeng has brought this up, we have nothing more to say."
After speaking, Liao Qingfeng stood up and extended his hand.
Zeng Qun's expression remained perfectly calm, but a barely perceptible sense of bewilderment lingered deep in his eyes.
"President Liao, I don't think your company's approach is wrong, but I think it's too aggressive. If you're willing to correct it, I think the results will be much better, and the development achievements will far exceed what we have now!"
Zeng Qun said this to Liao Qingfeng with a serious expression.
Liao Qingfeng, however, had lost interest in talking to Zeng Qun. He smiled faintly and remained silent. Clearly, their conversation had completely broken down.
……
The outside world has paid considerable attention to this negotiation meeting for the second-generation Xuanwu battery.
Less than half an hour after the signing ceremony ended in the venue, the first batch of on-site photos and written transcripts had already been leaked through the media channels.
The digital bloggers on Douyin squatted in the media area outside the venue, flipping through the signing data they had obtained from insiders while rapidly broadcasting it to the camera.
Four of the top ten trending topics on Weibo were related to Xuanwu batteries.
"Second-generation Xuanwu battery released", "30 billion yuan in intended contract", "State Grid Energy Storage 10 billion yuan order", "SU7 facelift will be equipped with second-generation battery".
Financial media reacted the fastest.
Reporters from CBN set up a temporary studio outside the venue, with the huge silver dome of the Galaxy Sports Center as the backdrop.
Holding a freshly printed list of signed contracts, the host's voice brimming with barely suppressed excitement: "Viewers, I am currently at the Galaxy Sports Center in Tangdu High-tech Zone. This morning, Galaxy Energy announced the complete technical parameters and pricing strategy for its second-generation Xuanwu battery at the Xuanwu Battery Global Procurement Negotiation Conference. According to the latest data we obtained from the scene, as of press time, the total value of the intended contracts signed at this conference has exceeded 30 billion RMB, involving numerous major global automakers, consumer electronics brands, and energy storage operators."
The scene shifts to a snapshot of the signing ceremony inside the venue: the moment the head of the State Grid Energy Storage Division stood up and shouted "10 billion RMB", the moment Masla raised his placard to lock in the deal, and Lei Jun's profile when he said "2 billion RMB".
Each photo was quickly spread, enlarged, and captioned, and the comment section exploded like a powder keg with a lit fuse.
"Three hundred billion yuan! A single trade fair resulted in the equivalent of someone else's entire year's GDP!"
"The State Grid immediately offered 10 billion yuan. The purchasing volume of the electric vehicle giant is indeed not on the same level as that of car companies. This is a real big buyer."
"Tesla personally came to Tangdu to sign the order. Tesla is going to deploy Xuanwu batteries across its entire product line."
"Mr. Lei, with 2 billion RMB, will the range of the SU7 be directly labeled as 2,000 kilometers?"
"Apple has already placed the order, and the battery life of the next generation iPhone is going to take off. In the past, Apple's supply chain supported Chinese companies, but now the Chinese supply chain is supporting Apple."
"Yu Dazui has 1.2 billion, and both the 'Ask the World' and mobile phones are going to use Xuanwu batteries. After the return of the Kirin chip, Huawei has truly made a full recovery."
A more subtle emotion was surging in the comments and bullet screen: pride.
It's not the kind of pride that comes from shouting slogans, but a more down-to-earth confidence that grows naturally from technical parameters and market data.
“In the past, we were the ones chasing after Samsung screens, Sony sensors, and Qualcomm chips. Now it’s the other way around. Apple and Samsung are lining up to buy our batteries. And our first-generation batteries cost 400 RMB per kilowatt-hour and our second-generation batteries cost 500 RMB per kilowatt-hour. They are the most expensive in the world, but everyone is scrambling to place orders. What does it mean to be technologically advanced? It means that even if you are expensive, others still have no choice but to buy from you.”
"How long has it been since the first generation of Xuanwu batteries? The energy density has increased by 30%, and the low-temperature performance has broken through minus 40 degrees Celsius. People used to say that China only knew how to copy, but is this still considered copying? This is defining the industry standard."
"Have you noticed that Galaxy Technology never participates in any international consumer electronics shows or goes out to promote itself? It's the global giants who fly to Tangdu and line up. Moreover, today's negotiation meeting was hosted by Liao Qingfeng, and Wang Donglai didn't even go on stage. A press conference where even the chairman didn't need to personally appear resulted in the signing of 30 billion yuan in contracts. That's the real source of their confidence."
“I’m more concerned about when the price of first-generation batteries will drop. Four hundred dollars per kilowatt-hour is still expensive, but Liao Qingfeng said that there can be additional tiered discounts. If mobile phone manufacturers can get enough discounts, will phones costing two or three thousand dollars be able to use Xuanwu batteries?”
"I agree with the comment above. My current phone only lasts two charges a day. If I could upgrade to a Xuanwu battery, I'd be willing to pay a few hundred yuan more for the phone. I'm really fed up with the phone freezing and shutting down outdoors in winter."
"Some bloggers have already done the math: assuming a car company sells hundreds of thousands of cars a year and each car uses tens of kilowatt-hours of electricity, the procurement cost of Xuanwu batteries is indeed high. But right now, charging anxiety is the biggest obstacle to buying a car. Whoever solves the range anxiety first will have the pricing power, and consumers will be willing to pay a higher price."
While netizens were excitedly discussing the new product and urging the brand to switch to Xuanwu batteries as soon as possible, another message began to spread rapidly in financial and investment circles.
The significance of this news is far more alarming to industry insiders than the contract amount itself.
Galaxy Energy will significantly expand its own battery factory.
The three factories in Shenzhen, Chengdu, and Chongqing are being developed simultaneously, and the equity structure of the contract manufacturers is also being restructured.
Following the news, BYD responded positively. The boatman and Liao Qingfeng, president of Galaxy Energy, have reached a preliminary agreement on equity cooperation in Fudi Battery. Galaxy Technology will invest in Fudi Battery and promote the alignment of management standards and compensation systems with its own factories.
Meanwhile, CATL's negotiations have stalled.
The closed-door meeting between Zeng Qun and Liao Qingfeng failed to reach a consensus, and CATL rejected Galaxy Energy's request for a controlling stake.
These two pieces of news were released almost simultaneously.
The capital market reacted as quickly as a knife.
After the news was released, BYD's stock price surged.
Starting mid-session, buying orders surged in like a tidal wave, with large orders of over 10,000 lots being executed consecutively, causing the stock price to quickly reach a new high for the period.
Analysts were rapidly updating their commentary on trading software, with one report titled: "BYD's alliance with Galaxy Energy: The biggest winner in Xuanwu Battery's capacity expansion."
The article's analysis is quite straightforward: once BYD Battery is incorporated into Galaxy Energy's system, it will not only be able to secure OEM orders for second-generation batteries, but will also be able to directly share management standards and supply chain resources.
BYD is also a major customer of Xuanwu Battery. With this dual identity, the certainty is extremely high, and the target price has been raised across the board.
CATL's stock price, however, plummeted.
Selling orders surged out like a burst dam. During the continuous auction phase, green numbers flashed rapidly on the trading software, and an analysis report from a leading brokerage firm offered the most sobering assessment: "CATL's rejection of Galaxy Energy's controlling stake is a short-term risk aversion move, but will put it under pressure in the long term."
The report points out that after CATL rejected equity cooperation, its future contract manufacturing share will be gradually diverted to its own factories and BYD Battery.
Although CATL still retains a large share of the low-to-mid-end market and materials business, its influence in the high-end power battery sector will be further weakened. It is recommended to closely monitor subsequent capacity diversion data and changes in OEM orders.
A well-known financial blogger posted a short message with a side-by-side comparison of two candlestick charts: one red line pointing vertically upwards and the other a green line pointing vertically downwards.
"Today, the capital market cast its vote with real money. Those who follow Galaxy will rise, and those who refuse Galaxy's hand will fall. Xuanwu Battery is no longer just a battery; it is becoming a rule-maker in the battery industry."
The messages exchanged in brokerage firm internal groups are even more blatant than public announcements.
One analyst in the group made a very direct statement: "CATL's refusal to invest this time may have preserved its control in the short term, but in the long term, it may have thrown away its last ticket to the table."
One sentence silenced several groups simultaneously.
No one refuted or echoed, because everyone was waiting—waiting for the subsequent OEM order allocation data, waiting for CATL's internal adjustment plan, and waiting to see if the scale of the low-to-mid-end market could truly support CATL's independent path.
At the same time, netizens' comments began to shift from excitement to deeper discussion.
"This time, Brother Boatman has really figured it out. Relinquishing control of Fudi Battery may seem like opening a hole for BYD, but in return, it brings the capacity expansion and technical support of Xuanwu Battery. In the long run, this step may be more important than selling millions of cars."
"Zeng Qun bowed his head twice before, so why did he suddenly become so tough this time? Because if he bows his head again, he will really become a contract manufacturer. If CATL is really taken over, even the direction of independent technology research and development will depend on Galaxy's whims. It's not that Zeng Qun doesn't want to cooperate, it's that he doesn't dare to risk his life."
"The capital market is the most honest. The fact that BYD's stock price rose so much while CATL's stock price fell so much shows that everyone has already used real money to predict the outcome. With a technology as advanced as Xuanwu Battery, if you don't cooperate, someone else will."
"After Xuanwu Battery expands its production capacity, the price will definitely come down. Today, we signed a 30 billion yuan agreement. With the economies of scale, the cost reduction will be very fast. Once the price reduction trend is formed, how long can CATL hold on in the low-end and mid-range markets? To put it bluntly, what's really scary about Xuanwu Battery is not how strong its technology is, but that it is converting its technological advantages into economies of scale at an alarming speed, and then using its economies of scale to drive down prices. Others simply can't catch up with this cycle."
"So Zeng Qun's problem isn't that he doesn't want to pursue it, but that his approach might be wrong. He thinks that maintaining control will secure the future, but what's the point of control if everyone in the market starts buying Xuanwu batteries?"
The last trending topic on Weibo reached the top spot precisely at 10 PM: "The second generation of Xuanwu Battery is born, who wins?"
Countless people typed their answers in the comments section: BYD, domestic new energy, Chinese technology.
Every answer made sense, but the one that received the most likes consisted of only two words: "China!" (End of Chapter)