Exploring boundless imagination, challenging the infinite frontier.

Written by: Huashang Taolüe - Chen Siwen

In 1999, Li Shufu, who was willing to risk everything to build cars, said to the leaders who came to inspect:

"If I fail, please give me a chance to fail."

Ten years later, at the press conference for Geely's acquisition of Volvo, Li Shufu said:

"We should try, practice, and explore. If others can't do it, we'll take it over and do it well."

Since then, Volvo's global sales have doubled, and Geely has gradually developed from upstream lithium mining, phosphorus chemicals, semiconductors, and intelligent systems to downstream automobile manufacturing, automotive travel, and even aircraft, satellite launches, and commercial aerospace. Li Shufu's thinking about automobiles and the future has become deeper and more transcendent.

【1】

Years later, the 2024 graduates of Sanya University may still remember the public lecture given by the founder and honorary dean of the college, Li Shufu, and how he talked about the history and future of the automotive industry, especially his deep reflection and foresight on the development of China's automotive industry.

In Li Shufu's view, the essence of automobiles is the endless exploration of the forefront of technology.

Since 1885, when the German Karl Benz created the first car, a human race to continuously challenge physical limits has begun. Every technological transformation and every technological breakthrough has made cars faster, stronger, safer, and more comfortable.

But no matter how technology changes, the laws of the automotive industry remain unchanged.

For example, the automotive industry focuses on accumulating experience and making gradual improvements. Without a single-cylinder engine, three-cylinder and four-cylinder engines would not have emerged; without twill textiles, cross-ply tires would not have been invented; without ordinary brakes as pioneers, there would be no anti-lock braking system.

This progress is also reflected in the transformation of production and management models. For example, Ford invented the assembly line, reducing the assembly time of the Ford Model T from 12.5 hours to 1.5 hours, and the price dropped below $400, selling 15 million units in 20 years.

Therefore, the technological evolution of the automotive industry is continuous. It is an industry that continuously progresses on the shoulders of its predecessors. All past experience and technology are the basis for enabling the present and future.

This continuous evolution requires generations of professionals to uphold the craftsmanship spirit and achieve it through professional division of labor and social cooperation.

In Li Shufu's view, this is the law of the automotive industry - it is the crystallization of the human industrial system.

In the era of fuel vehicles, each car has 20,000 to 30,000 parts, and the power, control, structure, and thermal management systems all have their own supplier systems. Its industrial chain length far exceeds other industries. This is the specialized mass production of automobiles.

60 years ago, American cars had no seatbelts, no airbags, and no child safety seats, and the number of traffic deaths per mile was ranked first in the world. With the efforts of safety agencies, experiments such as frontal impact, side impact, rear-end collision, and even moose tests have emerged successively, and a safety evaluation system has been born and popularized worldwide. This is the socialized cooperation of the automotive industry.

GM invented automotive financial services, lowering the threshold for car purchases; Toyota created lean production methods, reducing costs and increasing efficiency; Volkswagen contributed platform-based production, significantly reducing the difficulty of automotive development. Each of these has pushed the automotive industry forward a significant step, also representing the socialized cooperation of the automotive industry.

As the leading company in the industry chain, automakers are always the core driving force and bear the greatest pressure.

In Li Shufu's words: "The automotive industry is a world-class industrial cluster that entrepreneurs aspire to invest in but fear being trapped. This is another essence of the progress of the automotive industry."

From technology research and development to production improvement, whether in the East or the West, automakers face the same test paper, with only one question: How to solve the huge capital required for upfront investment in the automotive industry.

Different eras have different answers. Historically, international giants relied mainly on early starts and solid foundations; Chinese cars after the founding of the country relied on national fiscal funds; after reform and opening up, Chinese cars relied on the trees of joint venture brands. Geely entered the car-making industry by emptying its pockets and risking everything.

But today, the answer has become using significant post-investment returns to promote a virtuous cycle of commercialization.

From an investment perspective, the automotive industry is a standard "upfront investment" industry. The upfront research and development costs are high, the investment in equipment and production sites is huge, and the time is long. Once the product achieves mass production, the cost drops sharply. Once it achieves significant success in the market, it will achieve explosive post-investment returns through large-scale applications.

In 2007, Geely's annual revenue was still around 100 million yuan, but investment never stopped - self-developed CVVT engines, transmissions, electronic power steering systems, tire pressure monitoring and safety control systems; establishing engineering research and development centers, launching the CMA platform; entering the "Blue Geely Action" in the new energy field, and shortening the development cycle with the "BMA architecture"...

These investments helped Geely achieve a volume and price increase - from 2016 to 2018, Geely's sales increased from 800,000 to 1.5 million, its market share in passenger cars rose from 3.2% to 5.8%, and the average price per car increased by 9,500 yuan.

By 2023, Geely has achieved an annual sales volume of 2.8 million, revenue of 498.1 billion yuan, and a net profit of 10.2 billion yuan. These profits will then be invested in the research and development of the next generation of products.

Only by forming profitability can the cycle of "investment-research and development-manufacturing-revenue" be achieved. Without sufficient commercial profits to ensure self-sustaining profitability, huge continuous investments are impossible, and the development of enterprises and industries is unsustainable.

Looking back at Chinese cars represented by Geely, it has a legendary color of breaking through the siege, seemingly like an accident, but in fact, every step has followed the essence and laws of the automotive industry, making success inevitable.

【2】

2023 was a year of explosive growth for China's new energy vehicles.

That year, Geely Holding Group set a new record for annual sales, with new energy vehicle sales reaching 980,000, an increase of 51% year-on-year, and a new energy penetration rate of 35%.

However, Li Shufu, who has been making cars for nearly three decades, is particularly concerned about another issue: How should China's new energy vehicle industry develop? His thinking and exploration are rooted in but transcend the automobile, starting from energy reality but transcending reality.

The "coal-rich but oil-poor" energy structure requires China to place energy security in a strategic position. The trend of carbon neutrality globalization is increasing the demand for clean energy, but the action plan for clean energy should not be a single answer.

When it comes to clean energy, solar energy is the most talked about, but historically, wind energy and hydropower are older qualifications.

Over the past 20 years, China has simultaneously planned unprecedented-scale industrial policies on multiple fronts. Government-led large-scale construction and continuous innovation investment by enterprises have made China's spending on wind power, solar power, and hydropower routes total several trillion yuan.

These determinations and actions have allowed China to rank first in the world in terms of cumulative installed capacity of onshore wind power, solar photovoltaic, and hydropower as early as 2019. Its strategy of "multi-pronged attacks and comprehensive bets" also embodies China's policy philosophy for solving clean energy: screening out the most suitable and sustainable route for the future through multiple options.

Li Shufu's thinking about the development path of new energy vehicles also follows the same logic - China's new energy vehicles should also bloom in full bloom, rather than betting their future and destiny on a single uncertain path.

In fact, new energy vehicles worldwide also have multiple technical routes coexisting.

Japan and South Korea, hydrogen energy is their main technical route, due to their lack of fossil energy resources; the United States takes a path of free exploration and competition, due to its huge reserves of coal and oil; Brazil has been exploring ethanol due to its rich biomass resources; Europe has also left the decision-making power to the free competition of the market.

Among China's multiple routes for new energy vehicles, which will ultimately prevail?

Li Shufu's answer is - the one with full value chain competitiveness.

As the name suggests, full value chain competitiveness is not about leading in a single indicator, but rather a comprehensive score across all subjects. Specifically for new energy methods, the core is three conditions: first, whether this energy is clean; second, how cost-effective it is, whether it is easy to use, and whether it has comprehensive competitiveness; third, whether it will be subject to supply constraints.

Looking at China's new energy vehicles from the perspective of full value chain competitiveness will overturn many existing concepts.

Currently, electric vehicles are widely recognized as representatives of new energy, but a fact often overlooked is: Where does the electricity for electric vehicles come from?

In China's current energy structure, about 70% is coal-fired power. Every ton of coal used to generate electricity emits 2.67 tons of carbon dioxide, totaling 4.69 billion tons of emissions per year. Whether concentrated or dispersed emissions, the total amount has not decreased.

Therefore, electric vehicles using traditional coal-fired power are actually not equivalent to true new energy or clean energy - if electric vehicles are all considered new energy vehicles, then all electrical equipment can be called new energy equipment.

This is obviously not quite appropriate.

There is also ample room for discussion when considering new energy vehicles from a cost perspective.

For example, the hydrogen energy route, although widely recognized as having the lowest carbon emissions and declining costs year by year, its advantages over fossil energy are greatly diminished when considering national conditions - Europe's carbon trading cost is 100 euros per ton, while China is 80-100 yuan.

This means that as long as a route with more carbon reduction effects is found, fossil energy still has significant competitiveness in terms of full value chain costs.

In the public lecture, Li Shufu also talked about a fact that many people are reluctant to admit: China's electric vehicles have a chokepoint problem.

The technical route represented by lithium-ion batteries seems to be flourishing, but there is still a hidden danger - key materials.

By 2023, nearly half of the lithium came from Australia and a quarter from Chile, while 99% of global lithium production capacity is shipped to China. In addition, lithium battery proton exchange membranes, gas diffusion layers, catalysts, membrane electrodes, and carbon paper have not yet fully achieved autonomy.

These are the challenges beyond China's achievements in electric vehicles, the pitfalls of the lithium-ion battery route.

These cognitive biases, unique national conditions, challenges, and pitfalls, each of which affects full value chain competitiveness. If all eggs are put in one basket, even if progress is rapid at the moment, it may lock China's new energy vehicles into a single path.

Therefore, China's new energy vehicles cannot afford to make mistakes or lose.

Li Shufu said that discovering problems is a good thing, solving problems is a big deal, avoiding problems is foolish, and having no problems is a bad thing. He, who has discovered the problems, is also actively solving them in multiple ways, urging more people to pay attention to and participate in solving the problems.

Including providing different solutions. Having more options means more certainty for the future.

In the field of pure electricity, Geely has built an industry-leading full-stack self-research system for "three electrics" (batteries, motors, and electric controls), achieving an independent and controllable supply ecosystem for the three electrics, and extending the industrial chain to upstream lithium resources.

Beyond pure electricity, Geely is also a pioneer and promoter of the methanol route, from low-temperature cold starts to dedicated additives, from methanol-resistant materials to dedicated lubricants, from emission control to methanol electronic fuel injection control systems, methanol engines...

Geely's classic model, the Emgrand, has achieved a low methanol consumption of 9.2L per 100 kilometers by equipping a dedicated 1.8L methanol-electric hybrid engine, equivalent to less than 3L of gasoline consumption per 100 kilometers for a car of the same displacement. The travel cost per kilometer for users is less than 30 cents.

In the field of energy, there is an "energy impossible triangle": an energy source that simultaneously possesses stability, cleanliness, and affordability. Methanol is currently the most promising option to turn the impossible into possible.

Most existing methanol extraction comes from coal, and China is a coal powerhouse, which means stability and affordability. Li Shufu's ultimate goal is to fully collect the emitted and atmospheric carbon dioxide, allowing solar energy and carbon dioxide to synthesize green methanol, using green methanol to solve the world's energy and double carbon issues. This is complete cleanliness.

In this public lecture, Li Shufu also emphasized again:

"In addition to lithium-ion batteries and hydrogen fuel cells, China's new energy vehicles may also emerge with a third route."

【3】

As early as the "Global Automotive Forum" in 2014, Li Shufu predicted:

"The car of the future is not just a means of transportation but a series of super clients that can provide personalized services."

A decade has passed, and this judgment is becoming a reality.

Driverless technology, user experience, controlling everything with one screen, intelligent interaction, understanding and executing individual needs... These services with "humanized" labels have long gone from value-added items to standard configurations, and the goal of becoming a "super client" is increasingly closer.

The trend of intelligence has taken shape, but Li Shufu, the former prophet, is now applying the brakes to激进的智能化:

"The process of automotive intelligence needs a long time and cannot bury safety hazards for the sake of intelligence."

The automotive automatic emergency braking system known as AEB is a typical example.

The AEB system can control the vehicle to brake automatically based on changes in road conditions to avoid traffic accidents. For example, when an obstacle approaches or is less than a safe distance from the vehicle, the system will determine that a collision is imminent and apply full braking force.

In actual settings, to ensure safety, many AEB systems set the trigger speed for emergency full braking relatively high, but this precisely buries a hazard - any electronic device has the risk of misfiring.

If a misfiring accident occurs on the highway, the faster the speed, the greater the scale of the accident. The setting that was originally meant to protect users can turn around and harm them at this point.

Another example is driverless technology, which is currently in the spotlight. Both automakers and professional companies hope to push this technology to the highest level as soon as possible and make driverless technology widely available.

This is not only a liberation for humanity but also represents significant commercial benefits. However, Li Shufu has a different view on the progress of driverless technology:

"Cars are serious products related to human lives. Ultimately, it still depends on the maturity, safety, reliability, cost, and consumer experience of the technology."

The foundation of driverless cars is built on mature artificial intelligence technology, high-end chip technology, and repeatedly validated software algorithms. It must not only be safe and reliable but also ensure low enough costs to be more competitive than human drivers.

Only when both conditions are met can driverless technology achieve universal benefits. Otherwise, it will either become a safety hazard or a gimmick for excessive marketing.

Such gimmicks