Previously, Yinlong's Nanjing project faced intrusion due to outstanding payments. Dong Mingzhu responded that friction between companies is normal. While the Nanjing High Court encountered some issues, they have been resolved amicably. She also stated unequivocally, "Yinlong will not scale back its investment. I am full of confidence in Yinlong's future because, firstly, its energy storage technology is there."
It's worth mentioning that back in December 2016, Wang Jianlin, chairman of Dalian Wanda Group, who was invited by Dong Mingzhu to jointly invest 3 billion yuan in Yinlong, pointed out at the time that "Yinlong's future may lie in energy storage. If the technology is commercialized, Yinlong's market value will double."
The Securities Daily reporter noted that, as of now, Dong Mingzhu holds a 17.46% stake in Yinlong. Based on Yinlong's initial valuation of 13.4 billion yuan at the time of the initial investment, Dong Mingzhu would need to pay 2.34 billion yuan to acquire a 17.46% stake in Yinlong; while Wang Jianlin previously revealed in an interview that Wanda Group invested 500 million yuan in Zhuhai Yinlong.
An industry investor stated that Yinlong ultimately built its business on acquiring and selling patents, lacking sustainable positive R&D capabilities. The company culture does not support engaging in physical manufacturing, "especially in the current climate of employee morale instability and tight cash flow."
Refocusing on energy storage technology
In fact, Dong Mingzhu has always regarded Yinlong as "gold buried in the desert," frankly stating that she values the energy storage prospects of lithium batteries. She believes that Yinlong's energy storage technology is in a leading position in the industry, and that "Yinlong's technology has a tacit and seamless integration and cooperation with Gree."
"Gree Electric's development also depends on batteries, because we have seen the future's key in the past few years: intelligence." Dong Mingzhu once clearly stated, "Who dares to use air conditioning in electric vehicles? Yinlong has given us an opportunity." The above statement was once regarded as the biggest reason for Dong Mingzhu's investment in Yinlong—to find another support for Gree's future development. Gree and Yinlong will inevitably have business cooperation and overlap in the future.
Similarly, according to Yinlong founder Wei Yincang, Yinlong and Gree are a powerful alliance. "Gree's more than 60,000 electrical engineers and 100,000 appliance repair personnel can quickly match supplies for Yinlong." However, the cooperation that the two company leaders described as a perfect match seems to be struggling to gain market approval.
According to reporters, Yinlong's previous operating model could be summarized as a 20-character policy: "zero-price vehicle supply, ten-year leasing, ten-year warranty, whole vehicle replacement, and win-win for all parties." This meant the bus company paid rent through financial leasing, with zero down payment and installments over ten years. A closed loop was formed among the bus company, the new energy vehicle manufacturer, the local government, and financial institutions. During this period, the bus company handled operation scheduling and management, while the new energy vehicle manufacturer provided warranty service for the vehicles' "three electrics" (battery, motor, and electronic control system).
However, with the decline in subsidies and the emergence of issues such as time limits for local bus fare deposits, this operating model, widely adopted in the new energy bus industry, is no longer sustainable. Furthermore, Yinlong has clearly failed to achieve what Dong Mingzhu emphasized: "solving problems through the market."
Data shows that as of December 31, 2017, Yinlong's total assets were 31.512 billion yuan, while its total assets reached 23.767 billion yuan.
Furthermore, regarding product applications, although Yinlong has repeatedly claimed over the years that its lithium titanate technology has overcome the energy density problem, market response has been minimal. A review of Yinlong's product catalog by a reporter from the Securities Daily reveals that Yinlong electric buses are even actively purchasing lithium iron phosphate batteries to replace lithium titanate batteries.
It's worth noting that the energy storage technology "named and praised" by Dong Mingzhu in her response to the Yinlong incident was actually mentioned back in December 2016 when Wang Jianlin increased his investment in Yinlong, stating that "Yinlong's future may lie in energy storage. If the technology is commercialized, Yinlong's market value will double."
"Half of China's energy consumption is driven by the real estate sector. Energy storage can boost energy levels during off-peak hours. International construction teams have been discussing this for 15 years, but so far, no one has found a truly commercially viable solution," said Wang Jianlin. Industry insiders have stated that lithium titanate batteries are currently best suited for energy storage, encompassing multiple fields such as residential energy storage, industrial energy storage, and more.
Reporters noted that in 2016, Yinlong publicly stated that its long-term plan revolved around two core industries: energy storage and electric vehicles. At that time, it even set a target of achieving 1500 MWh of energy storage by 2020. Given the current decline of its electric vehicle business, it remains to be seen whether Yinlong will shift its development focus in the future.
Lack of manufacturing company culture
After Dong Mingzhu officially took over Yinlong, she bluntly stated publicly that Yinlong lacked corporate culture and craftsmanship, and that this needed to be thoroughly corrected. Regarding its business model, she said, "Yinlong used to rely on bank financing to survive; as a manufacturing company, it should rely more on the market."
According to Dong Mingzhu, Yinlong's shoddy manufacturing practices were particularly serious in the past, leading to a dispute with Wei Yincang over this. "When I saw it, the gaps were so big," she questioned Wei Yincang after inspecting Yinlong's products. "Other cars are like this, Japanese cars (without gaps) cost 900,000 yuan, how much is my car?" Wei Yincang retorted.
"You must provide me with a seamless integration; there's no reason why you can't. With this amount of money, if you can achieve the quality of 900,000 yuan, that's your level." From then on, Dong Mingzhu's determination to eliminate malpractices and innovate was fully revealed.
"I've only been in the car manufacturing business for a few years. You need to give me some time," Wei Yincang replied. But Dong Mingzhu believed that time was not an option. "Right now, we must be running at full speed. We must have strict, even demanding, standards and testing methods for every detail of management, leaving no flaws unchecked."
An industry investor revealed to reporters that, looking back at Zhuhai Yinlong's rise to prominence, it started as a jack-of-all-trades, venturing into real estate, guarantees, used cars, and agriculture. Later, it acquired Altair, a US company, and obtained lithium titanate patent technology. Ultimately, it achieved rapid wealth accumulation and soaring valuation by signing contracts with local public transport groups.
However, according to the aforementioned individuals, Yinlong ultimately built its business on acquiring and selling patents, lacking sustainable positive R&D capabilities. The company culture does not support engaging in physical manufacturing, "especially at this stage when morale is low and funds are tight."
Despite this, reporters noted that Yinlong is currently undergoing a comprehensive internal overhaul focusing on product quality, supply chain management, and manufacturing. Lai Xinhua, president of Zhuhai Yinlong, stated that after the current management reduced Yinlong's workforce to 8,000, not only has normal production been maintained, but production efficiency has actually increased. Furthermore, compared to the previously poorly made and subsidy-driven bus products, Yinlong's overall vehicle manufacturing quality has significantly improved.
