Chapter 342 What Only Space Can Do

Many times, if you miss it, you miss it.

When NIO was raising funds, they did not directly look for Hefei. During the whole process, they looked for many cities including Huzhou and Hangzhou, hoping to raise about 145 billion yuan from them. They also looked for Jiangcheng that time.

Jiangcheng has always hoped to develop new energy vehicles, but the deal failed in the end because at that time, at the end of 19 and the beginning of 20, Jiangcheng had no energy to care about NIO's financing as it had encountered a huge problem.

Secondly, the situation of NIO was indeed not optimistic at the time. NIO was facing a situation where its stock price was about to fall below $1 and it faced the risk of delisting from the US stock market.

The regulations of the U.S. stock market are that if the price per share falls below $1, a warning will be issued. If the stock price fails to return to above $90 within 1 days of the warning, the stock will be delisted.

NIO faced such a crisis in its 20th year, and Jia Yueting's Faraday Future often gives you the big deal of combining dozens of shares into one share, just to prevent the market value per share from falling below $1, to stay on Nasdaq, and to keep its shell on Nasdaq.

Lao Jia's Faraday Future has completed three consecutive mergers of eighty-in-one, three-in-one, and forty-in-one, with a total ratio of up to 9600 times.

When it went public, you spent $96000 to buy 9600 shares. Today, not only has the stock price fallen from $10 to $2, but your 9600 shares have become just 1 share, which is even more outrageous.

Back to NIO, Jiangcheng did not provide financing to NIO that year, so Hefei state-owned assets took over and invested 112.6 billion yuan to acquire 24.1% of NIO's shares.

Looking at it today, it didn’t make much money from a purely transactional perspective, but if you look at it from the perspective of attracting investment to the entire city, it was definitely a big profit.

Because at that time, the 112 billion was used to leverage an investment of 1020 billion RMB.

Looking at it today, it has driven the vigorous development of the entire Anhui Province's automobile industry.

In a sense, investments are often based on expectations. If Jiang Cheng had known that NIO could make a comeback, he would have gritted his teeth and signed the contract.

At that point in time, Jiangcheng's endowment was better than Hefei's. Hefei Port was also an inland port, but in terms of scale, it was not even one-third of Jiangcheng Port.

Considering that NIO only has the domestic market, Jiangcheng's position is also far better than Hefei. In the automotive industry chain, in 20 years, Jiangcheng has more than one advantage.

Today, even if you invest 200 billion RMB and still can’t get shares, which is equivalent to lending you an interest-free loan, you still have to grit your teeth and take this project from Space.

In essence, good projects are rushing to give you money.

The logic that the strong will always be strong is fully reflected in the matter of investment.

"Secretary, I can't give you an answer now, because the conditions that Jiangcheng can offer can also be offered by other cities.

And this is not something I can decide alone. Tesla has shares in Space. The factory to be built is a joint venture between us and Volkswagen, and Volkswagen also has the final say.

I see Jiang Cheng's sincerity, but I really can't give a clear answer.

After I return to Shenhai, I will definitely talk to Lin Jia and ask her to focus on investigating the environment of Jiangcheng and include Jiangcheng in the cities that we focus on.

If possible, I really hope to do something for Jiangcheng."

The sincerity shown by Jiang Cheng is indeed enough.

Because in 2027, the logic of Dongda's local investment promotion has changed, and the chips that local governments can offer from Yanjing have been tightened.

To be precise, the talk started in 23 and the real action began in 24.

In August 24, an administrative regulation called the "Fair Competition Regulations" was issued. It was clearly stated that local governments cannot provide tax incentives without laws and regulations or Yanjing's permission.

Including financial subsidies, tax refunds, land transfer, etc., have become very strict.

The tax-based investment promotion model was directly banned.

During this period, local investment promotion mainly relies on investment, and local state-owned assets invest in enterprises to attract enterprises.

Obviously, compared with relying on taxation to attract companies to settle down, relying on investment is much more difficult. You have to worry about what to do if the company gets the investment and then goes bankrupt.

Investment promotion under this model is particularly challenging for local governments. You cannot invest blindly and attract a bunch of companies that are not at all compatible with your existing local resources.

As we all know, state-owned assets used to be the most risk-averse because there was a red line of not being able to make losses. You could invest, but you couldn't lose money. If you lost money, it would lead to the loss of state-owned assets.

This is impossible. Even if Duan Yongping came, he would not be able to make angel investment that only makes profits and no losses.

Therefore, after transforming the model of attracting investment through taxation into one of attracting investment, Yanjing issued the so-called 17 articles on venture capital in the same year. The full text is called "Several Policy Measures to Promote the High-Quality Development of Venture Capital", which loosened the restrictions on investment enterprises with state-owned capital and allowed them to make losses.

Increasing the difficulty of attracting investment, allowing state-owned capital to suffer losses, and handing over consumption tax to local governments are a combination of measures. The essence of this is to improve the local business environment and urge local governments to improve people's livelihood.

I don’t know if it’s effective, but that was the original intention.

By the year 27, this set of tactics had been used for almost three years.

Therefore, under such shackles, Jiangcheng's conditions are already very good. He invested 200 billion yuan and allowed you to use your own money to buy back the shares at the original price later.

To put it bluntly, this is a bit like walking on the edge of the red line, which is equivalent to giving you an indefinite loan with no time limit.

You should know that the 3 billion loan that Shenhai gave to Tesla had an interest rate of %.

"Yuan Guang, okay, your promise is enough.

I would like to say a few more words. The 20 billion investment is only for Space. For your and Volkswagen's super factories, we will build supporting industrial parks around the super factories, which will be funded by Jiangcheng. "

Jiangcheng has spent a lot of money, even to the point of spending all its money.

Jiangcheng's annual tax revenue is about 1400 billion yuan, with an investment of 200 billion yuan, and building an industrial park will cost at least 500 billion yuan. All together, half a year's tax revenue is gone.

"I will definitely leave Jiangcheng to the end. Lin Jia will have to bother you more in the future."

"Don't worry, we will be there whenever you call."

After Chen Yuanguang left, the atmosphere in the restaurant became more natural. There were only four people sitting there. No one would be so blind as to ask a beautiful woman to accompany him. After all, Lin Jia was in charge of this matter. If this got to her ears, or was revealed by Chen Yuanguang himself, Jiang Cheng might be eliminated directly.

Jiangcheng didn't have any advantages in the first place.

One in the province, two in Jiangcheng, and the president of Jiang University is gone.

They were all in the same circle and often interacted with each other. In terms of rank, Principal Shu was at the same level as them. In the past few years, Principal Shu might have soared to the top, becoming their immediate superior from a principal.

So no one of us will be too restrained.

"Well, it's just as you guessed. Even if we put all the chips on the table from the beginning, we couldn't get a single definite answer from the other party. But this is understandable, after all, we are competing with places like Shenhai, Hangzhou, and Yangcheng.

Compared to these places, Jiangcheng’s biggest advantage is probably the price of labor and engineers.”

Due to the housing prices and the large number of universities concentrated there, as well as the fact that Jiangcheng is located at the crossroads of nine provinces, the cost of recruiting engineers in Jiangcheng can be at least 30% lower than in other cities.

“Originally, they were building a smart factory, and with a limited number of employees, this advantage was not enough.”

Everyone was talking about it and racking their brains to think about what advantages Jiangcheng had that would allow Space to place a super factory in Jiangcheng.

At this time, Principal Shu was a little confused and asked, "Is this factory really so important?

If we really want to attract investment, the same conditions should be able to attract leading manufacturers like BYD, Ideal, and Huawei.

From the perspective of attracting investment alone, there should be no essential difference in the social benefits generated by bringing these manufacturers here.

This is just my humble opinion, I don’t quite understand it.”

After listening to the whole process, President Shu was both moved and full of questions. He was moved that his student had become an important figure in Southeast University in just seven years, and he was confused because he really didn't understand: the competition in new energy is about to enter the second half, so are Space and Volkswagen's super factories really that important?

Volkswagen is an old force and Space is a newborn. The product of the combination of the two may not necessarily have good results.

Outsiders simply believe that their joint efforts to build a super factory will combine the advantages of both parties: Volkswagen's rich experience and mature engineers, and Space's advanced technology and imaginative design.

But will a strong alliance really lead to good results? Not necessarily.

The luxury brand Denza, jointly developed by BYD and Mercedes-Benz, has been languishing for a long time. Later, after Mercedes-Benz withdrew its shares and BYD acquired full ownership, it actually got better.

Not all powerful alliances can be like the one in Question World.

After Principal Shu finished speaking, the other three looked at each other and said, "**, you answer it."

"Principal, you are right. From a short-term perspective, we can achieve similar results by looking for BYD or Xiaomi.

Nicknames never lie. A man with a nickname of God can become a recognized God in Dongda University. If we extend the timeline, for the long-term development of Jiangcheng's automobile industry, only Chen Yuanguang can possibly achieve the effect we expect. "

After the other party finished speaking, Principal Shu was still confused. What effect do you expect to achieve?

At this time, the person sitting opposite took over the conversation: "We hope to make Jiangcheng the core of Dongda's automobile industry again and become the city with the highest automobile output value in Dongda."

"Can a single super factory achieve this?" Principal Shu was even more confused.

“Of course it’s possible.

Principal, I won't name any names here, but many domestic car companies set prices to suppliers in the upstream and downstream supply chains based on their profit margins. They work so hard that they only leave you some of your hard-earned money.

Even worse, I won't even give you the money for your hard work, and you can only work for me for free.

When I went to Yudu for research last year, their boss came to receive me and enthusiastically discussed with me how to manage suppliers. They can even calculate the government subsidies for you, and then take the government subsidy money away from you.

As for how suppliers make money, they go to the stock market to make money. Those that are not listed can expand their scale and make a fortune by listing. For those that are listed, I will give you orders, your performance will increase, and you can make money from the rising stock price.

This is how many car companies play, otherwise how can they lower the terminal price and still make a profit.

Consumers benefit, but suppliers simply cannot afford to invest in further research and development.

The car companies you just mentioned include this type of car companies. If I recruit them, I will only have the present, not the future.

After he came, our Jiangcheng's more than 10,000 upstream and downstream suppliers had no way to upgrade their technology or iterate their processes, and they were only focused on making immediate profits.

Companies like Tesla will give suppliers enough profits.

How do they play? This is how they play. He makes a request and you see if you can do it. If you can, then great, I'll leave it to you.

I guarantee that your gross profit in the first year will be at least 50%. If the demand is important enough, 80% gross profit will be no problem.

But it will drop in the second year, and drop again in the third year, and continue to drop throughout the entire life cycle.

The advantage of this model is that it gives you a lot of concessions in the early stages to dilute your research costs, and then continues to lower prices, forcing you to optimize your processes and reduce costs. You will also force your suppliers to reduce costs, and the entire supply chain will be driven to iterate its processes and reduce costs.

Once you are able to improve the process, the extra profits will belong to the suppliers, which will also motivate suppliers to invest money in research and development.

This approach was first used by Apple, and Tesla also does it this way. We let Space come in, and they will adopt similar strategies to drive the entire supply chain to progress together.

Not to mention, it has the core competitiveness of being backed by the God of Light.

According to the vision of SpaceX, the raw materials should be the ores mined in space.

Originally, people were not very convinced, but with the emergence of room-temperature superconductors and HBM, the outside world generally believed that this day would come in ten years at the longest and five years at the shortest.

After space mining, smelting is always necessary, and this is also a supporting industry, which means it will be placed around the Space Super Factory.

“Yes, what ** said is right, and this time it’s not just Space. If it’s just Space, a high-end Space, the output is limited. Even if it drives the development of the industrial chain, the driving effect is limited.

This is a super factory jointly built by Space and Volkswagen, which means that Volkswagen's cars will also be built here. As the European market is ceded to us, Volkswagen's high-volume models will be the highlight.

Therefore, if we look at this investment promotion from the perspective of the entire Jiangcheng automobile industry chain, no other domestic new energy manufacturer can replace Space.

Even if other domestic new energy vehicle companies adopt similar supply chain development methods, they cannot compare with Space because they have many factories in many places.

The factory that Space and Volkswagen build will be Space’s only factory.”

There is no reason why other cities cannot think of what Jiangcheng can think of. Attracting investment has always been one of the most important tasks for a local area, and this sweet trouble will continue for some time.

(End of this chapter)