LeEco's car factory broke ground three years ago, and with 70 billion yuan invested, it still hasn't made it to the top three?

Like Ms. Dong, Jia Yueting, CEO of LeEco Holdings, has never wavered in his dream of making cars.

On December 28, at the foot of Mogan Mountain in Deqing, Zhejiang, LeEco Holdings announced that the LeEco Automotive Ecological Industrial Park had officially broken ground, which seemed to be a shot in the arm for investors.

Four months ago, when LeEco Holdings announced that it would invest nearly 20 billion yuan to build the LeSEE Eco-Auto Super Factory and Auto Eco-Town in Moganshan National Economic Development Zone, Deqing, Zhejiang, the outside world was shocked. This move, which marked the start of mass production of the first Internet car in China, was seen as a milestone for LeEco Auto, but at that time LeEco had not yet experienced the financial chain tension, arrears of payments to suppliers, shutdowns, "Ponzi schemes" and other turmoil. Today, the turmoil still exists, but Jia Yueting resolutely chose to start construction after obtaining the land.

Initial investment of 11 billion

The reporter from China Business News saw that the LeEco Automotive Ecological Industrial Park is backed by a mountain and is still a piece of bumpy land. Not far away, four or five cranes were working, and there were workers in yellow clothes. They were ready to break ground. According to the general cycle of building an automobile factory, the first phase of the LeEco Industrial Park is expected to be put into production in 2018. "The main task at present is to level the land," several workers told reporters.

"We will equip workers with wearable devices to assist them and reduce their workload," said Liu Hong, vice chairman of LeEco. Production efficiency will be improved through highly informationized management of all production links, as well as GPS, mobile phone apps, visual guidance, QR code recognition, smart wearables and other technologies. "We strive to have robots do 90% of the work during production."

According to Zhang Hailiang, president and COO of LeEco Auto, the LeEco Auto Ecological Industrial Park will be divided into an automotive intelligent production park, industrial supporting facilities and experience park, with a planned area of ​​4,300 mu. The first phase of the industrial park is expected to invest 11 billion yuan and cover an area of ​​more than 2,000 mu. After the completion of the first and second phases, the total production capacity will reach 400,000. "LeEco will produce LeSEE brand electric vehicles here, and through the integration of global advantageous resources to carry out independent research and development and design, LeEco Auto luxury car local manufacturing will be realized."

After the park is completed, it will integrate the four major processes of stamping, welding, painting and assembly, and integrate the powertrain workshop into it. The adjacent parts park is also under construction, which will improve the production and logistics efficiency of LeTV Auto. "In the future, customers who order cars can see the vehicle production process through the big screen, choose exclusive configurations through VR, and form exclusive orders." Zhang Hailiang said that it will build China's first D-class car factory, China's first Internet ecological super car factory, and China's first open super car industrial park with the concept of UP2U and user participation in the whole process.

However, many investors see LeTV Auto as a "blood-sucking" business.

"At present, LeEco Auto is something that can be said but not done. If other sectors develop well in the next three to five years, LeEco Auto can be done," Zeng Qiang, the second largest shareholder of LeEco, said in an interview with the media. But the automotive ecosystem seems to have long become Jia Yueting's belief and is ranked first.

"If we look at the future from now, LeEco's car manufacturing seems to be a gamble that goes against common sense; but if we look at the future from the future, LeEco is the most suitable and capable company in the world to make Internet smart electric cars." Jia Yueting said at the 2016 China Entrepreneur Leaders Summit that the core system of the car in his eyes is composed of four major technologies: computing system, driving and AI, Internet and electric. To subvert traditional cars, we must start with a comprehensive layout of underlying technologies, including artificial intelligence and unmanned driving systems including batteries, motors, electronic controls, vehicle-to-vehicle interconnection and in-vehicle interaction, electric vehicle network communication solutions, and vehicle networking technologies and application systems.

Jia Yueting believes that LeEco has all the technologies needed to transform the traditional automobile industry after three years of R&D in Internet-based smart electric vehicle technology. "From the beginning, we recruited the world's top team to carry out top-level configuration and development in all core parameters and performance." Jia Yueting gave all core high-end technologies such as power systems and autonomous driving to foreigners.

The cost of going against the norm

Recently, a video of the FF mass-produced car racing against supercars such as the Ferrari 488GTB, Tesla ModelX and Bentley Bentayga was released, which showed that the car is expected to become a benchmark for the 0-100km/h acceleration, hinting at the advantages of its mass-produced car in acceleration performance.

From the industry's perspective, LeEco's direction and model for car manufacturing are correct, and a wave of emerging car manufacturing forces has followed. "I think Jia Yueting has no other problems. He only has one problem, which is that he does not regard himself as a businessman, but as a superman. Obviously, no one is a superman." Smart Electric CEO Pang Yicheng said in an interview with Caixin that Jia Yueting has gathered 70 billion yuan in funds in three years and built seven ecosystems, but none of them has made it to the top three in their respective fields. "The only one that makes money is LeTV.com, but LeTV.com has been left far behind by BAT in the entire video field. This is the core reason why LeTV is in today's difficult situation, which is the lack of core competitiveness."

"We postponed commercialization, which is the price we paid for going against the norm. LeEco Auto is even against common sense." Jia Yueting once said that he has personally invested more than 10 billion yuan in LeEco Auto, which is an important factor leading to LeEco's overall lack of money. With the 1.08 billion US dollars in LeEco Auto's first round of financing and the 300 million US dollars that Jia Yueting donated in December, LeEco Auto currently has nearly 20 billion yuan in funds.

"It's not difficult to make a car that can run. It only costs 10 or 20 million US dollars. But the cost of developing a car may be ten times that. The cost of production preparation is at least twice that of developing the car, and the cost of entering the market is at least four times that of developing the car. So if you develop a high-quality car, assuming it costs 3 billion yuan, then multiply it by 7 and it will be 20 billion yuan." Li Bin, CEO of NIO, said in an interview with China Business News that the automotive industry is an industry with very high capital barriers. "LeEco is still doing things very seriously, there is no doubt about that. They may have underestimated the amount of money they needed when they were doing this."

In addition to LeEco Auto's personnel expenses and the large amount of equipment investment required for BetaCar (engineering prototype), LeEco Auto has officially started construction and plans to invest 11 billion yuan in the first phase of the factory construction. Where does the money come from?

"I believe that people who see FF's mass-produced cars in the United States will pay for my dream," Jia Yueting once said. On January 3 next year, LeEco's strategic partner FF's mass-produced cars will be launched globally. Will investors pay for Jia Yueting?

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.