Chapter 996
Those who have been rained on know better how to hold an umbrella for others.
After the elevator doors closed, Liao Qingfeng walked to Wang Donglai's side.
The corridor quieted down, with only the faint sound of air conditioning vents in the distance.
Liao Qingfeng rubbed his sore eyes, his voice filled with suppressed frustration: "Boss, what Director Liu said just now, it was obvious he was trying to use the raw material supply and public utilities as leverage against us. When you retorted, I saw his face turn green."
"Some loopholes cannot be opened. If you open them once, there will be countless more. Do you allow them to pass or not?"
Wang Donglai turned and walked back, his tone as calm as if he were discussing tonight's cafeteria menu: "They'll get used to it. Galaxy Technology didn't grow up through shady deals and moral blackmail; it stood up through technological leadership and business logic. Sell batteries honestly and do business with dignity."
Liao Qingfeng nodded and didn't say anything more.
He followed Wang Donglai into the office, sat down on the sofa, and habitually pulled out the negotiation plan that had been read so many times it was frayed.
He knew, of course, that someone like Liu Dehai wouldn't give up so easily. Someone who had been immersed in the system for too many years would always find a way to make things difficult for the company at some point.
But he also knew something else: when a company reaches the size, technological monopoly, and industry influence of Galaxy Technology, these things really become unimportant.
Wang Donglai sat down behind his desk, pushed his teacup aside, and his tone suddenly became very relaxed, as if he had just finished a warm-up match with only two rounds and hadn't even broken a sweat.
"Next, let's talk about the negotiation meeting. For the battery side, I plan to arrange it as follows."
Liao Qingfeng opened his notebook, pressed down the pen cap, and prepared to write it down.
"The second-generation battery is priced at $500 per kilowatt-hour."
Wang Donglai held up one finger and calmly said, "This is the base price. However, for our past excellent partners and customers who have not been found to have major problems during the assessment and supervision, the price will be reduced by five percentage points. For customers with problems and those who have not reached a certain purchase volume, the original price will be maintained. For customers who have repeatedly pointed out problems but still do not make changes, the cooperation will be terminated directly."
Liao Qingfeng scribbled notes in his notebook, his brow furrowing slightly before relaxing.
Differential pricing is a common concept in the business world, but it is extremely rare to apply it to highly standardized industrial products like batteries, especially when the evaluation criterion is "the degree of compliance of customer behavior".
But he soon realized that this was not an emotional punishment, but a carefully designed screening mechanism.
"After the second generation is launched, the price of the first generation will drop to $400 per kilowatt-hour. If a customer places an order for the second generation and the total amount of first-generation batteries exceeds one billion US dollars, an additional discount will be given on top of the price reduction."
Wang Donglai's tone remained calm, but every number was as precise as if it had been weighed on a fine balance: "You need to understand that the threshold of one billion US dollars is not set arbitrarily. Below this number, you can't enjoy additional discounts, and profits will be squeezed; once you reach this number, the purchase volume has already increased, and additional discounts are icing on the cake. Essentially, we use economies of scale to lock in major customers, so that major customers will take the initiative to lock in our production capacity."
Liao Qingfeng quickly jotted down the numbers and did a mental calculation: at $400 per kilowatt-hour for each generation, one billion dollars would correspond to a battery capacity of approximately 2.5 GWh.
This number represents the battery pack capacity of hundreds of thousands of vehicles for car brands. It's not an astronomical figure, but it's enough to filter out those who only want to test the waters with a few prototypes.
For smartphone brands, the battery demand for tens of millions of flagship phones can also reach this scale.
"In terms of production capacity, we are currently maintaining 70% of the first-generation production capacity, and will gradually reduce the proportion of the first-generation production line in the future. The new factory is still under construction, and the total production capacity will not decrease too much due to the reduction of the first generation."
Wang Donglai continued, "In addition, there's one more thing: on-site orders. Customers who place orders at the negotiation meeting will enjoy a first-order discount on second-generation batteries, at $490 per kilowatt-hour. This offer is only valid on the day of the negotiation meeting; it won't be available after that."
Liao Qingfeng looked up, quickly wrote something in his notebook, then capped the pen, put it on the notebook, and leaned back on the sofa.
Having worked with Wang Donglai for so long, he knew the boss's style all too well; every level of pricing was tied to a strategic objective.
The base price of $500 per kilowatt-hour for the second-generation battery was set at a level that would make competitors despair, make customers feel the pinch, but not scare them away.
The 5% discount for top partners is a way to filter customer behavior using price signals and shift compliance costs onto poorly managed buyers.
The billion-dollar procurement threshold is used to lock in major customers through economies of scale, forcing them to proactively lock in production capacity.
The price reduction of the first generation to $400 opens a window for the mid-range market that cannot yet upgrade to the second generation, while accelerating the clearance of the first generation inventory and making room for new production lines.
The $490 initial order discount is a way to exchange real money for certainty. If you place an order on-site at the negotiation meeting, the $10 per kilowatt-hour saved will be spread over the cost of the whole vehicle or machine, which seems like a great deal no matter how you look at it.
"Boss, customers can figure out the value of the first-order discount themselves."
Liao Qingfeng put down his pen and said in a calm voice, "For car manufacturers, the price difference between $490 and $500 translates to a saving of $800 based on 80 kilowatt-hours of electricity per car. It may not seem like much for the whole vehicle, but for the purchasing department, the psychological pressure of getting an extra discount by signing on the spot is more effective than any PowerPoint presentation. To put it more bluntly, this offer not only helps customers make their own decisions but also gives them more confidence when facing competitors who weren't there."
Wang Donglai picked up his teacup, took a sip, and nodded slightly without saying anything.
Liao Qingfeng didn't stop, but continued to ask, "But boss, what about the OEM factory?"
He turned to the next page of his notebook, and the tip of his pen lightly circled the words CATL and BYD.
"When Zeng Qun came to Tangdu last time, he asked me if the OEM orders would be cut after the second-generation battery came out?"
Wang Donglai leaned back in his chair, his fingers tapping rhythmically on the glass tabletop.
Outside the window, the tower cranes of the Tang Dynasty Imperial City were still turning, and the setting sun cast long, deep shadows of their steel arms.
He thought about the answer to this question in his mind.
“CATL and BYD, give them two paths.”
Wang Donglai's voice was calm, but his words were clearly carefully crafted and he seemed very serious: "The first option is for Galaxy Technology to establish its own battery manufacturing plant, which will be an OEM for one year. After that year, the OEM role will be completely terminated. This year is a buffer period, enough for them to readjust their production lines and customer structure, so that we won't undermine their resources."
"The second option is for Galaxy Technology to invest, thereby gaining stronger control over the manufacturing plant and raw material supply chain. It's either absolute control or becoming the largest shareholder. The OEM cooperation that chooses the second option can be maintained in the long term, but the premise is that the factory's management, standards, and employee benefits are all aligned with Galaxy Technology."
Liao Qingfeng lowered his head and scribbled notes in his notebook, his pen moving firmly and each word like a nail driven into the paper.
He participated in the industrialization process of Xuanwu Battery earlier than anyone else. From the first generation production line to the current second generation release, he has the production rhythm, quality inspection standards and yield data of every contract manufacturer in his mind.
He had considered the idea of Galaxy Technology establishing its own wholly-owned factory before, but hearing it from Wang Donglai today still made his heart skip a beat.
He quickly did a rough calculation in his mind. Based on the current shipment volume of Xuanwu batteries, if his own factory were to be fully rolled out, the required investment, land reserves, and number of workers would all be astronomical figures.
But he didn't ask where the money came from.
He knew that Xuanwu Battery's profit margin was sufficient to support this expansion.
What he really needed to confirm was something else.
"Boss, what if CATL doesn't want to be invested in?"
Liao Qingfeng looked up, his fingers pressing on the notebook, and said, "I've dealt with Zeng Qun many times. He understands the flexibility of OEM cooperation better than anyone. The larger the OEM volume, the deeper his reliance on Xuanwu Battery's technology; but without OEM, the production line's operating rate is insufficient, and depreciation and fixed costs will directly crush profits. He's been walking a tightrope for over a year, and he's doing it very steadily. Give him a year's grace period to withdraw from OEM, and he might accept it; but asking him to hand over a portion of his equity in exchange for long-term OEM qualification, he might not agree." Wang Donglai chuckled, a very light and faint laugh, like a breath of white air in winter, dissipating into the air in an instant.
He stood up, walked to the whiteboard on the side of the office, picked up a marker, and wrote several large characters on the whiteboard: Own Factory.
“Zeng Qun’s lack of approval doesn’t mean this path is not viable. I actually prefer to establish our own factory. Contract manufacturing is just a transition. You provide the technology, standards, and blueprints, while they provide the factory buildings, equipment, and workers. In the end, whose profits are split? They are our technology premium.”
He turned to look at Liao Qingfeng, his tone more certain than before: "But owning a factory is different. The factory is our own, the products are our own, and the profits are our own. More importantly, every worker in the factory can receive the salary and benefits that Galaxy Technology provides, not the standards of an OEM factory."
Liao Qingfeng wrote half a line in his notebook, then stopped.
He recalled that at the end of last year, he had seen a salary comparison analysis report submitted by the human resources department. The report stated that the monthly salary of front-line workers in major domestic consumer electronics contract manufacturers fluctuated between four and six thousand yuan, and the overtime hours generally exceeded eighty hours per month. Housing provident fund was paid at the minimum rate, or even not at all.
The same report states that for equivalent positions in Galaxy Technology's own factories, the starting monthly salary is over 7,000 yuan, with full social insurance and housing fund benefits, paid annual leave, and quarterly performance bonuses.
He suddenly understood the light in Wang Donglai's eyes when he said "I'd rather"
"But this needs to be done slowly."
Wang Donglai continued, "First, we will build our own battery factory in Shenzhen, Chengdu, and Chongqing, with planned production capacity comparable to our existing OEM scale. The factory locations will be close to our customers: Shenzhen will correspond to Huawei and BYD, Chengdu to clean energy storage projects in Southwest China, and Chongqing to Changan and Seres. Land acquisition, environmental impact assessment, and supporting facilities will all go through formal procedures, with no missing approvals. At the same time, we will select several more locations in populous provinces such as southern Henan and western Jiangxi to plan integrated industrial parks for consumer electronics OEM and battery production lines, reserving space for future large-scale production."
He paused, then turned the pen cap and pressed it onto the whiteboard: "But this is just for batteries. Lithography factories, semiconductor material joint ventures, the Shennong Project—these things all require factories and workers to expand. Building factories, installing equipment, recruiting workers, training production line workers—all of this adds up to tens of thousands of jobs. If we leave all these contract manufacturing orders externally, then the wages and benefits for these jobs can only be determined by the contract manufacturers, which we can't control. But if these orders come into our own factories, even if the factories don't make a penny, we can still raise the treatment of grassroots workers to a higher level."
Liao Qingfeng scribbled in his notebook, silently doing some calculations in his mind. A medium-sized battery factory, from production supervisors to front-line operators, could probably provide employment for over a thousand people.
Three seats mean several thousand people.
With the addition of the planned consumer electronics manufacturing park, the total workforce could exceed 10,000.
Behind every worker is a family, and each family's consumption, savings, and children's education are all influenced by this wage.
This is not charity; it is a smarter and more far-reaching logic of profit distribution. It uses the excess profits from technological monopoly to subsidize the wages of employees in labor-intensive sectors, and in turn, uses a stable workforce and high-quality manufacturing to consolidate the market foundation of technological monopoly.
"So we're going to take jobs from Foxconn."
Liao Qingfeng suddenly spoke, his tone carrying a faint smile, not a joke, but the certainty that came from having figured things out.
He turned a page in his notebook, his finger resting on the salary comparison data he had previously obtained from the human resources department.
"Foxconn employs millions of people in China, but the wages of frontline workers are much lower than those in our own factories, and their overtime hours far exceed the limits stipulated by labor law. If we bring in consumer electronics contract manufacturing, those mobile phone brands will not only have to purchase our batteries in the future, but also move their entire assembly lines to our factories."
"After all, we control the allocation of Xuanwu batteries."
Wang Dong glanced at Liao Qingfeng and slightly raised the corner of his mouth.
He never publicly criticizes his peers' compensation systems, but Liao Qingfeng, who has followed him for so many years, can already read his attitude from his unintentional micro-expressions.
The names of global contract manufacturing giants such as Foxconn, Luxshare, Compal, and Quanta flashed quickly through Liao Qingfeng's mind.
Behind each name are tens of thousands of grassroots workers who wear the same anti-static work clothes, work ten or even twelve hours a day, operate the world's most precise equipment, and receive wages that barely cover their living expenses.
"We don't manufacture cars, but we earn excess profits in the industry through absolute technological leadership; we don't compete with contract manufacturers for low-end orders, but we use the quota of Xuanwu batteries to divert high-end orders to our own factories."
Liao Qingfeng closed his notebook, his tone shifting from question to reiteration: "The factory can not make money because the profit from batteries is already sufficient. The profits are redistributed to the grassroots employees, which not only affects their paychecks but also the entire consumption chain. Boss, your strategy is perfectly executed, from batteries to workers, from workers to consumers, and from consumers to domestic demand."
Wang Donglai walked back to his desk, sat down, picked up his teacup, and took a sip of the tea, which had long since gone cold.
“If a company earns 10 billion, the founder takes 8 billion, the executives take 1 billion, and the remaining 1 billion is distributed among tens of thousands of employees, I can understand this distribution ratio, but I don’t want to follow it. Profit distribution is not just a number on a table; it ultimately determines the company’s fundamental character. Once that character is set, no amount of advanced technology can change it. Galaxy Technology can earn less, can earn more slowly, but it cannot earn money at a loss.”
Liao Qingfeng nodded; he knew what Wang Donglai meant by those words.
Before Xuanwu Battery, the development of new energy vehicles relied on price reductions and subsidies to expand the market, but CATL was actually making money.
However, just because the company makes money doesn't mean that the employees will get a share of the profits.
Even after partnering with Galaxy Technologies, CATL didn't want to change that. There was a minor disagreement about it last time, which ended with CATL backing down.
"The road ahead is long and arduous, but I believe that with the boss's abilities, he will definitely do even better."
Liao Qingfeng had long been attracted by Wang Donglai's personal charm and had come to completely agree with Wang Donglai's ideas and thoughts.
Even though he could have earned more money, he never considered betraying Wang Donglai.
How are the arrangements for the companies participating in the trade fair going?
Liao Qingfeng replied calmly and decisively: "The invitations have all been sent out. The venue is set in the multi-functional hall of the Galaxy Sports Center, with the highest capacity reserved. Forty-seven global car companies, nineteen mobile phone brands, and eleven energy storage companies have confirmed their attendance at 100%."
"Okay, that's good. I'll leave this matter to you. I believe you have the ability to handle it well!"
Liao Qingfeng nodded seriously, his expression becoming even more earnest.
Although the second-generation Xuanwu battery shocked the world, it was not enough for Wang Donglai to personally preside over this negotiation meeting.
This time, if it weren't for the high rank of the leader from Beijing, Wang Donglai wouldn't have personally intervened; he would have handed it over to Liao Qingfeng instead.
After handling the matter, Liao Qingfeng left Wang Donglai's office.
After the door closed, the entire office fell silent once more.
Wang Donglai sat in his chair, watching the sky outside the window gradually darken. The lights in Tangdu High-tech Zone were lighting up one by one, and the light strip on the dome of the newly completed Galaxy Sports Center in the distance was gradually illuminating, like a dazzling Milky Way lying across the city skyline.
Further away is the construction site of the Tang Imperial City. The outline of the city wall has already taken shape, and the steel arm of the tower crane is still slowly turning in the night.
Wang Donglai thought a lot about whether technology could be used for good, and ultimately, it couldn't be expressed in pretty words at a press conference.
Instead, it focuses on whether an ordinary worker can go home for the New Year with dignity, whether they can buy their child a new pair of sneakers, whether they can deliver food without having to force themselves to when their arthritis flares up on a snowy day, and whether they can endure illness without fear of losing wages.
Those who have been caught in the rain understand better how to hold an umbrella for others! (End of Chapter)