Text | Giant Tide WAVE, author | Xie Zefeng
10 years ago, Geely founder Li Shufu once said this sentence in an interview:
"I'm thinking about the vast universe, and your questions are a little narrow."
If this was said by Liu Shufu or Wang Shufu, he might be sent by relatives and friends to check his mental state, but Li Shufu would not. In the Chinese business world, he is a legend known for his boldness and boldness. He began to build cars with the courage of "the car is four rudders and sofas", and successively acquired foreign brands such as Volvo, Proton, Lotus, Smart, etc., and even became the majority shareholder of Mercedes-Benz.
Now that the global auto industry is turbulent, Li Shufu's madness continues: buying mobile phone companies and building satellites.
This is the second "car+ star" enterprise in the world after Tesla. Geely under Li Shufu has now been defined as a "mobility technology company" with businesses ranging from "automotive-mobility-new energy-mobile phone-satellite Internet" to the development of flying cars (which won the world's first FAA airworthiness certificate).
From the perspective of these businesses alone, Li Shufu has become the Chinese version of Musk, the Chinese version of Iron Man. Geely has explored a lot of fresh business combinations and strategies in the new energy era, and it seems that it always "coincides" with Musk's business map.
Musk's business dreams seem to have influenced Li's judgment of the future, and the ambitions of the two men are becoming more and more similar.
01 Copy Musk
Like Musk, Li Shufu's ambitions have long since risen to outer space.
Elon Musk is one of the leaders who led human society from fuel vehicles to the era of electric vehicles, and is a figure that can be recorded in history.
But electric vehicles are only one of Musk's business maps, and the world's richest man also has many top companies coveted by venture capitalists: SpaceX, Starlink, SolarCity, Hyperloop, Boring Company, OpenAI, Neuralink, etc., corresponding to space space, satellite Internet, photovoltaics, hyperloops, underground tunnels, artificial intelligence, brain-computer interfaces, etc.
These industries are extremely advanced and extremely difficult businesses, and ordinary entrepreneurs can't control them at all, but Musk is facing difficulties, not falling behind, and turning crazy ideas into reality.
Source: CB Insights
What touched Li Shufu should be Tesla's great success in commercialization. Tesla not only rewrote the global auto industry, but also revived the dead by building factories in China, detonating the market, and exporting the world — all under Li Shufu's "nose".
For the full year of 2021, Tesla achieved revenue of $53.823 billion (340.193 billion yuan), an increase of 71% year-on-year; net profit reached $5.519 billion (34.883 billion yuan), a year-on-year surge of 665%, almost exceeding the expectations of all analysts.
As performance improved significantly and continued to exceed expectations, Tesla's stock price soared and its market value soared. For Shufu Lee, who is in the same industry, including all other entrepreneurs, this is an irresistible temptation.
Similar to, but somewhat different from Musk's business vision, Li Shufu's plan is to build Geely into an unprecedented mobility technology group, not only building hardware, but also providing services.
Combing the industrial system of Geely Holding Group, it can be found that it is not limited to the traditional automotive field, Geely's tentacles have been extended to travel, lithium batteries, mobile phones, satellites and other industries.
After the acquisition of Volvo and the investment in Cao Cao Special Car, Li Shufu successively acquired or invested in black technology companies such as Taili Flying Car and Space-time Daoyu through capital operation, and strived to achieve "integration of heaven and earth" smart travel collaboration.
Geely Holding Group official website
Geely's multiple industrial layouts can find Musk's shadow.
In the field of electric vehicles, Geometry, Extreme Krypton, Ruilan, polestar (Polestar) benchmarks Tesla; space-time Daoyu and SpaceX, Starlink benchmark; Star Age and the planned acquisition of Meizu, which is the same as Musk's idea of making mobile phones.
In terms of travel, Musk plans to build a "maglev + low vacuum" hyper-flying high-speed rail; while Li Shufu is betting on flying cars, Geely's wholly-owned Taili Flying Car focuses on intercity passenger and freight flying cars, and Volocopter, which has invested in the city, focuses on short-distance air electric travel in the city.
In 2018, Geely Holdings strategically invested in Space-time Daoyu and began to lay out space satellites. That is, in this year, Geely Holdings and Aerospace Science and Industry Group reached a strategic cooperation, and the two sides will carry out cooperation in the fields of high-speed flying trains and industrial Internet.
The launch of the first two low-orbit satellites in space-time Daoyu was scheduled to be completed in 2020, and then postponed until the end of 2021, but the launch mission failed due to the abnormal flight of the Kuaizhou-1 rocket.
This obviously did not make Li Shufu lose confidence, because SpaceX also experienced three rocket launch failures in the early days, leaving Musk almost bankrupt - but the fourth success made him a complete comeback.
However, unlike Musk's StarLink plan, the main purpose of the satellite Internet created by Geely is not to grab China Mobile's business, but to establish the integration of smart travel space and earth.
As he said: "Mobile phones, the Internet of Vehicles, satellite Internet cross-border interaction, a strong ecosystem, can provide users with a more convenient, more intelligent, Internet of Things life experience." ”
In Li Shufu's expectation, after the formation of the low-orbit satellite network of Space-time Daoyu, it will improve the navigation accuracy of Geely Automobile to the centimeter level. This is not only conducive to the layout of "three-dimensional travel", but also deeply integrated with automobile manufacturing, future travel, big data and other industries, generating new commercial value.
02 "First Principles" china landing
Although the starting point is close, Li Shufu's commercialization in the field of cutting-edge technology is still in a very early stage.
Musk has not only publicly pointed out once that his success stems from the "first principle" that he has always adhered to:
"Returning to the essence of things to solve problems, rather than using analogies or improvements, analogies and improvements can only produce small upgrades and iterations of technology or products, and only from the essence of things can we bring subversive innovation."
He thinks about problems based on first principles. For example, from the perspective of physical principles, the lowest cost of the battery is the sum of the costs of various metals, and the cost of lithium batteries can be much lower than the market price at that time, so he realized the vast cost reduction space.
In the early days of Tesla, the price of the power battery was $600/Kwh, and the price of an 85-kilowatt battery was more than $50,000. If analyzed from the perspective of analogy, the battery pack will always be so expensive, and it will not become cheaper in the future.
But Musk thinks from a first-principles perspective, arguing that the composition of batteries includes carbon, nickel, aluminum and some polymers. According to the price of the London Metal Exchange at that time, it was only $80/Kwh. There is a huge price difference, so Tesla began to build its own battery factory in 2013, and the cost of the battery fell by 30% after it was put into production.
SpaceX also faced high rocket procurement costs at the beginning of its birth, but when it was disassembled, the rocket was composed of aerospace-grade aluminum alloys, titanium, copper and carbon fibers. Musk believes that the cost of rocket raw materials is only about 2% of the price of rockets, and instead of spending a lot of money to buy rockets, it is better to buy cheap raw materials and build their own rockets. In the years since, SpaceX has cut the cost of launching rockets by 90 percent.
"First Principles" can decompose complex situations into the most essential problems, lithium batteries, rockets and other high-priced problems can be bypassed, and solutions can always be found.
Arguably, "First Principles" is the ultimate secret of Musk's disruptive innovation. Coincidentally, in the late 1990s, Li Shufu germinated the dream of building a car. But at that time, the automotive industry was monopolized by state-owned assets, and private enterprises had no technology, no workers, and no factory buildings, and Li Shufu's dream was more like a fool's dream.
At that time, he shouted: "What is a car?" Isn't it four wheels, a steering wheel, an engine, a car case, and two sofas inside? Shocked the business community and earned the title of "Car Maniac".
It can be found that musk's "first principle" is very similar to Li Shufu's theory of "four wheels and one sofa", and the founding of Geely is the commercialization of "first sexual principles" in China.
In the exploration of human travel patterns, the two also have similarities. At present, the fastest means of transport for human beings is the airplane, if analyzed according to the "analogy" thinking, there will be no faster means of transport, but if you start from the "first principles", the essential function of the aircraft is to transport through flight.
Therefore, as long as the cost is reduced and the transportation is completed, the form is not important, Musk thus founded the hyperloop company Hyperloop, Li Shufu acquired the Taili Flying Car, and took a stake in Volocopter.
Although the starting point is close, Li Shufu's commercialization in the field of cutting-edge technology is still in a very early stage. The success of Musk's new energy and launch vehicles has become clear, and Li Shufu is currently more career chips in fuel vehicles.
Many of Musk's industrial sectors have the significance of "global first", and he is basically personally down; but Geely's technological transformation in recent years has mostly been through capital acquisition or equity participation, and most of them are in the initial exploration or experimental stage, and commercialization is still far away.
In particular, Geely's electrification transformation is in a more awkward position, although it has a place, but the volume is far less than BYD and Wei Xiaoli, and the market value has also been surpassed. The Geely electric vehicle determines the success or failure of Li Shufu's "heaven and earth" smart travel, and more efforts are needed from the starting point.
03 Forced transformation
After the defeat of "Blue Action", Li Shufu had to rethink the idea of new energy transformation.
"The reason why they build cars is to circle money in the capital market, and the so-called new forces of car building are blindly fooling the people all day long." As early as 2018, Li Shufu made the contradiction between traditional car companies and new car-making forces public.
But at present, in addition to the hot off-road vehicles, the incremental cake of the automobile industry basically belongs to the new energy vehicle. Geely, the independent king of the fuel vehicle era, has performed unsatisfactorily in these two markets.
In January, Geely auto sold 146,400 units, down 6.36% year-on-year. Among them, Lynk & Co fell 28%, and the Geely brand fell 6%.
The good news is that the new energy car has increased significantly, with sales of 17,928 units in January, an increase of more than 5 times year-on-year, and pure electric models reaching 15,442 units, a year-on-year surge of 641%. But that was also partly due to last year's low base.
In terms of horizontal comparison, Geely has been far behind by BYD, and its sales of new energy vehicles are only a fraction of the latter.
As early as 2015, Geely proposed the "Blue Geely Action Plan" that the sales of new energy vehicles should reach 90% in 2020. However, as of 2021, Geely's sales of new energy vehicles totaled only more than 100,000 units, accounting for only 7.54%.
In 2020, Geely achieved revenue of 92.114 billion yuan, a year-on-year decrease of 5.43%. In the first half of 2021, revenue increased to 45.032 billion yuan, but the net profit was almost standing still, maintaining at 2.381 billion yuan.
Compared with BYD, which was once questioned about relying on fuel vehicles for blood transfusion, the sales of new energy vehicles have now contributed more than 80%. In 2021, BYD's total sales reached 740,000 units, an increase of 73.34% year-on-year; of which new energy vehicles reached 600,000 units, an increase of 218.3% year-on-year.
The electrification process on the Volvo side was not going well. Polestar, which mainly focuses on the high-end market, has only 365 vehicles in China in 2020, compared with more than 2,000 in 2021. Overseas markets are slightly better, but its global sales in 2021 will only be 29,000 units.
As a brand positioning high-performance electric vehicles, its first car Polestar 1 is priced at 1.45 million, while the price of Polestar 2 directly fell to 300,000, which shows that its strategic positioning has drifted.
After the defeat of "Blue Action", Li Shufu had to rethink the idea of new energy transformation. Under the background of the obstruction of the whole vehicle, the layout of travel services, mobile phones, satellites, and flying cars has become an important booster for Geely's anti-overtaking.
Intelligence and networking is the second half of the competition for electric vehicles, intelligent networked vehicles need dedicated communication and network technology, the current network system has been unable to meet the needs of L3 and above automatic driving. Therefore, the creation of a dedicated intelligent network satellite system is likely to be one of the key factors for car companies to win the future.
The importance of satellites to car companies has increased, and the relationship between satellites and cars has never been so close. Through the empowerment of the automobile industry such as mobile phones, satellite Internet, shared travel, etc., and then generalizing the travel thinking to the fields of flying cars and commercial aerospace, exploring the ultimate travel mystery of human beings, the improvement of corporate valuation level is natural.
This may be the ultimate goal of Li Shufu's big game.
04 Epilogue
China has always lacked entrepreneurs with flamboyant personalities and full of passion for innovation, before the rapid development of Internet companies, Ma Yun and Wang Xing once satisfied people's fantasies, but the final result was that these young and super-rich people encountered a turn in wind reviews.
Li Shufu seems to want to fill this gap in the new era. His business dreams are grand and his strategy is organized. But electric vehicles are still the foundation of Geely's "smart mobility" business landscape, and if it fails to succeed in this field, this commercial building is like a castle in the sky.
For Li Shufu and Geely, the development of the new energy vehicle sector is the key to Geely's full food and drink, steady and far-reaching, if it continues to develop in the current situation, it is obviously not enough. It is not easy to rebuild a Tesla, and "China Musk" is really not good.