Netease Auto invited Li Shufu to be a guest on the "Top Dialogue" program for an exclusive interview.
New Energy should be promoted by enterprises themselves, not the government
Netease Auto: What is Geely's view on the trade-off between energy-saving technology for new energy vehicles and traditional vehicles?
Li Shufu: Who should push for the promotion of new energy vehicles? Who exactly should it rely on? It should rely on enterprises themselves to promote. Toyota has sold the Prius to the US, who is pushing it? Is it the US government or Toyota itself? Toyota also brought the Prius to China, is it Toyota Motor Corporation or the Chinese government that is promoting it? Toyota also sells its hybrid electric cars in various countries around the world.
Therefore, to drive new energy vehicles into the market, it must rely on enterprises themselves to push forward. We are making efforts in this aspect. We believe our new energy vehicles, electric vehicles, and hybrid electric vehicles are leading in China. We will absolutely not lag behind any other company in China. We must do solid work, and when we are ready, we will enter the market. Don't have too many excessive special requests from the government.
In fact, the government has a lot of work to do. The policies issued by the government can only be fair, shared by everyone. Therefore, enterprises must conduct extensive research and exploration on the strategic feasibility of technology, quality, cost, and service, and not put too many demands on the government.
Improving traditional automobile energy-saving technology is more important than promoting new energy
Netease Auto: I believe your opinion on the current environmental protection and energy conservation of China's automobile industry is hoping for (the introduction) of fuel economy regulations. Under the constraints of these regulations, companies themselves decide whether to develop traditional energy vehicles or new energy vehicles.
Li Shufu: My point of view is to first improve the fuel efficiency of traditional internal combustion engine vehicles because there is currently no energy efficiency, wasting 30-35%. First pick up this 30-35% waste. That is to say, every car can save 30-35% of fuel now without needing too many other revolutionary technological changes. Just gradually improve the existing internal combustion engine technology, which can recover a lot of energy. Achieve what can be achieved through effort, don't waste. At the same time, accelerate the research of new energy vehicles. And new energy vehicles are not just electric vehicles; there are many other types of new energy. Because electricity as an energy source will eventually become a problem too. If coal is used to generate electricity, it still burns coal and pollutes the environment. If nuclear energy is used to generate electricity, isn't it using nuclear materials? But nuclear materials will also run out. If wind or solar power is used to generate electricity, are the conditions mature? Are they feasible? There are a series of issues, so problems need to be thought about from their root causes. If there is abundant electricity, I believe the technology of electric vehicles itself is not that difficult. Therefore, we need to find the fundamental issue to study and solve the fundamental problem.
The route of new energy cannot follow foreign footsteps
Netease Auto: Do you think it's not the right time to promote new energy vehicles yet?
Li Shufu: It's not exactly like that. Now, we should encourage the research of new energy vehicles. Which energy is really new energy? Originally, hydrogen fuel cells were mentioned, but where does the hydrogen come from? People say hydrogen comes from water decomposition, two hydrogens and one oxygen, producing a lot of hydrogen, but where does the energy for water decomposition come from? They say use solar energy, but how to convert solar energy into electricity, and how to solve these technologies? There are a series of issues. I believe these problems can be solved. Maybe one day through chemical methods, or maybe one day through physical methods, but at least until today, the issue of where electricity comes from hasn't been resolved.
Netease Auto: Using what kind of new energy to replace traditional fossil fuels hasn't been solved yet, so talking about new energy vehicles now is still premature.
Li Shufu: It's not too early either. We must actively explore and research, but after all, we haven't found a practical solution yet. That is to say, the current solutions cannot yet compete with traditional vehicles, and traditional vehicles still have strong vitality. In this situation, should the whole world order that traditional vehicles cannot be produced or used anymore, or should traditional vehicles improve their technology, reduce emissions, conserve energy, and protect the environment? When the day comes that traditional fossil energy runs out, new energy can take over. This is a major issue facing all of humanity, not something that any single enterprise can solve. Geely has conducted a lot of research and invested a lot of money in this area. I believe our technology in this field leads in China, and no other company in China can compare with us. We are quietly conducting research.
Netease Auto: You predict when the life of traditional fuel vehicles will end and when new energy vehicles will truly be widely promoted among humanity.
Li Shufu: This is not a prediction, but rather scientific analysis. Traditional fossil energy, such as gasoline, diesel, and coal, the amount of these resources on Earth is scientifically verified. According to the current global consumption rate, proven reserves of gasoline and diesel conservatively estimate another 70 years of availability. As for the unproven reserves, we don't know yet. This is the first point. Secondly, how crude oil is formed, the academic community has different theories. Some say large amounts of pine forests compressed underground turned into oil, some say marine animals compressed underground turned into oil, but others say they don't know. No one says that after the oil is extracted, it will regenerate after a few hundred years. This is a mystery.
Coal is the same. Coal converted into diesel or methanol still has low costs. In this situation, which path should we choose for energy? Therefore, I think this is a very significant topic. Most of China's (views on new energy) are following the West. Whatever a Western company says, whatever an economist or scientist says, we follow them. I think China has entered the ranks of world powers. The day we truly become a world power, we may have more confidence. We must have our own primary data, not base our decisions on online, newspaper, or magazine news. At the very least, Geely and myself completely research and analyze all possible evidence, make our own judgments, and not blindly follow others.
What you said before was not a prediction, but rather there are data here that can be analyzed.
Government intervention in the auto industry is normal, Geely just needs to do its own thing
Netease Auto: The automobile industry is a pillar of the national economy, very important to the national economy, and the government intervenes a lot. How to teach children, your proposal during the two sessions also mentioned content related to this. Do you feel (this intervention) is a bit excessive?
Li Shufu: The government conducts macro-control. Government management of society is an important manifestation of China's socialist market economy. We need appropriate channels and ways. We can only do our own things well, try to get close to the market, operate according to economic laws, and do our own things well.
Netease Auto: Your proposal also mentioned aspects of car society. Now our cities are restricting car consumption, including charging registration fees and limiting traffic. Does this infringe on consumers' rights to enjoy the happiness of having a car?
Li Shufu: Of course, different cities have different situations, and adopting some policies to manage a city is understandable. However, a new problem arises here: those who buy cars earlier benefit, while those who delay buying cars suffer losses. If such policies continue to be introduced, it will cause panic, and everyone will rush to buy cars, fearing that new policies will limit residents' rights to buy cars.
Therefore, everything has advantages and disadvantages. An absolutely fair society is hard to find, probably not much in the entire world. So I believe China is moving towards fairness and justice, slowly.
National mentality signifies whether car society is realized
Netease Auto: You suggest establishing a "Chinese Car Society Research Group" to provide data support for the automotive industry. From today's perspective, the goal of setting up this research group is to avoid detours in China's car society. What do you mean by "detours"?
Li Shufu: "Detours" refer to the fear that a large number of cars entering society could lead to disasters we can't even imagine, such as urban congestion, roads being blocked, cars unable to park, various conflicts and contradictions arising. In such a situation, further adjustments to various plans and measures would be needed, resulting in significant losses. Now, we should intervene and study this major issue in advance. Planning and construction of road networks, parking arrangements, gas stations, charging stations, and other facilities should be laid out ahead of time. This includes car consumption, car finance, second-hand car market transactions, and management.
The arrival of car society and the state before entering car society are different for the entire country, and the mindset of citizens is also different. These two states determine two different societies and two different situations.
Tight funds do not affect the acquisition of Volvo
Netease Auto: Geely's operation of Volvo surprises and delights us greatly. Compared to other Chinese companies' acquisitions, Geely's acquisition of Volvo not only received support in China but also gained support from local media overseas, even including American media. This is really delightful. It can be said that Geely's acquisition also aligns with public sentiment. Currently, which stage has Geely's acquisition reached? Is it far from the final acquisition?
Li Shufu: To do a thing successfully, it's best to align with the interests of all parties involved and ensure that the interests of all parties are not harmed. Therefore, Geely's acquisition of Volvo must adhere to this basic rule. As for which stage we are at now, it's hard to measure. I can only say that we are proceeding according to the plan established by both us and Ford, with not too many variables. We will strive to complete this transaction as soon as possible.
Netease Auto: Geely's acquisition of Volvo, a world-renowned large enterprise, involves a substantial amount of capital for a private enterprise. How is the financing going?
Li Shufu: Our funds are tight. If you can support us, please do (laughs). We believe that since we have made this decision, we will certainly resolve the financing issue you mentioned, and it won't become a problem.
Learning from automotive giants while developing education and the automotive industry simultaneously
Netease Auto: Geely has developed very rapidly in recent years, not only in the automotive industry but also in the educational sector. Please tell us about Geely's policy of combining education with industry to mutually enhance and promote each other. Have other automotive companies attempted similar approaches?
Li Shufu: Major global automotive companies generally adopt this approach. For example, General Motors, although it went bankrupt, I believe after reorganization, it will still have strong vitality. GM's automotive academy develops well. Toyota is the same, with Toyota Business School and Toyota Automotive Academy, which are also excellent. Mercedes-Benz, BMW, etc., large automotive companies all consider talent cultivation and training as equally important as the development of the automotive industry.
Geely, due to limited funds and small one-time investment, places greater emphasis on talent cultivation and training, and follows the development patterns of the global automotive industry. Therefore, while manufacturing cars, we also built schools. Although initially, the scale of the schools we built was small, they were not even approved by the state or registered, we used factories and office buildings as schools, recruited a small number of students and teachers, and trained students according to our standards, step by step, Geely's education and automotive industry grew together.
Netease Auto: If the talents from your school were only used for your company, we might still question it, but seeing the talents cultivated by your school being sought after by other companies, we believe this is indeed a successful attempt.
Li Shufu: Many automotive company executives have discussed with me, hoping that our teaching and training programs can be open to their engineering technicians. Up to now, we have not agreed.
Stimulating employees' creativity and initiative is very important
Netease Auto: Here is a relatively interesting small question. Are there any personally written contents in the textbooks used in Geely's school?
Li Shufu: Yes, there is a book called "The Way of Being Human," which is studied by our associate degree and undergraduate students.
Netease Auto: Is it mandatory?
Li Shufu: It's a textbook, and I've put a lot of effort into it.
Netease Auto: What ideas do you express?
Li Shufu: There is a textbook called "The Way of Being Human," which focuses on understanding Chinese history, correctly understanding Chinese history, and correctly applying Chinese history. This is one point.
Netease Auto: I read a statement by an automotive executive: My employees work very hard and diligently, and their salaries are not as high as those in other automotive companies, yet they still work diligently. I believe spiritual strength is more powerful than material strength, and I believe your "Yuan Power" follows the same principle.
Li Shufu: Geely is continuously researching and innovating in management and has created a management method called "Yuan Power Management." Yuan Power aims to unleash the energy and role of the most front-line, nerve-end parts of the enterprise, stimulating the enthusiasm, initiative, and creativity of each employee. This is a relatively new management theory.
People in an enterprise, or in society, pursue not only tangible material satisfaction but also spiritual satisfaction, which is not just fame or profit. Fame refers to how their ideas, status, ideals, and concepts are implemented, utilized, and respected, which is very important. Profit refers to material aspects, such as salary, including the implementation of personal ideals and beliefs, which is also part of profit. People must be respected according to their inherent needs, only then can their enthusiasm, initiative, and creativity be stimulated.
You might say it's abstract, but it's actually very real. Regardless of anyone, if they have ideas but no place to express them, and no one listens to them, they will keep it bottled up inside, making it hard to stimulate their enthusiasm.
They have energy and fighting spirit, hoping to release it, hoping for a stage to showcase their talents. If the enterprise does not provide this stage, they cannot display their talents or release their energy, they might leave.
Therefore, how to correctly guide and stimulate employees' creativity, enthusiasm, and initiative is a very important subject in management science.
Experience is strategic upgrading, lessons are managerial detours
Netease Auto: Do you think it's your ability, charm that has the greatest impact on Geely and contributes the most to its success, or Geely's management?
Li Shufu: I think it's multi-faceted. Without basic moral principles, the most advanced management cannot be implemented; having only charisma, if the management method is a mess and the management system is not systematic, it will also be a mess. I think a successful enterprise must lay a foundation, practice internal improvement, continuously improve, constantly summarize experiences and lessons, continuously upgrade management levels and improve management systems, developing dynamically and improving in development.
Different historical periods and different enterprise management methods are all different. Enterprises change and develop, systems change and develop, employees' qualities, engineers' and managers' levels must also develop and improve. This is a dynamic matching process.
Netease Auto: Looking at the past year, what are Geely's experiences and lessons learned in management? Can you give examples?
Li Shufu: We have experiences and lessons, systematically summarized, we have relevant materials. Simply put, one of our experiences is to let more people understand and support our strategic transformation. We no longer simply use price as a competitive means but focus on ensuring relatively cheap prices while achieving technological leadership, excellent quality, and thoughtful service. We aim to fight with technology, quality, service, brand, and corporate ethics. Our overall strategy has undergone fundamental changes, gaining recognition and support, I think this is our successful experience.
Of course, there are plenty of lessons. We have taken many detours in management and made quite a few adjustments in management methods, which are profound lessons.
Netease Auto: What is the purpose of making these changes now?
Li Shufu: The goal is to accomplish our mission, realize our vision, let Geely cars spread across the world, let the world be filled with Geely, manufacture the safest, most environmentally friendly, and most energy-efficient good cars. These missions are the goals we aim to achieve.