What running two electric-van plants actually requires

In a capital-heavy business the instinct is to fill the plant, because every van not built leaves fixed cost unabsorbed. I have learnt to separate the cost of an idle line from the cost of the volume needed to fill it. The idled final-assembly line at Chongqing costs us about RMB 48 million a year in depreciation, preservation and the wages of people we redeployed rather than released. Filling it in 2024 would have meant matching a 12 per cent price cut on our core van, roughly RMB 17,000 a vehicle and more than RMB 1.5 billion of gross margin over a year. I now build our capacity plan in three layers: volume customers have contracted, volume our dealers and fleets can absorb without their stock rising above about six weeks, and volume that only a price cut would create. The board sees all three, and the third layer is never allowed to justify a shift pattern.

A battery-electric van carries several hundred volts through connectors, harnesses and a pack we assemble ourselves from purchased lithium iron phosphate cells. Faults in these parts are rare, expensive and often invisible at incoming inspection. Since the 2023 recall, every high-voltage connector housing is X-rayed by its moulder, and our two cell suppliers share production data for each lot rather than sending certificates. Engineers who have worked in those processes audit our 120 high-voltage and safety-critical suppliers every year. Incoming defects across all 410 production suppliers fell from 186 to 61 parts per million between 2022 and 2025. I also changed what suppliers are paid for: one that reports an escape before it reaches a customer now shares the cost of containment with us, while one whose escape we discover pays in full. Suppliers' quality managers have become far more willing to pick up the telephone first.

Parcel carriers buy vans for the November peak and want them by the end of September. Before 2023 our Changsha plant built 42 per cent of its annual output in the third quarter, on six-day weeks with as many as 2,300 dispatched workers. Since then we have built at a steady daily rate from February to November and parked the vans built ahead in a 9,000-place yard with scheduled maintenance charging, because a parked van's systems draw a small current and a pack left too long can fall below a safe charge. Large customers sign early allocation agreements in the first quarter, with price protection if our list price falls before delivery. The arrangement costs about RMB 38 million a year in carrying cost and paid out RMB 52 million of price protection in 2024. It removed most of the overtime premium, the rework and the injuries that the autumn sprint used to bring.

Our most serious hazards are high voltage on the pack line and in end-of-line testing, the lifting of packs weighing up to half a tonne, and fatigue on long shifts. Every high-voltage task needs a certified operator, a written permit and a second person present. We track near-misses as carefully as injuries: 4,100 were reported in 2025, against 1,350 in 2021, which I read as growing trust rather than growing danger. Lost-time injury frequency across both plants fell from 1.9 to 0.6 per million hours worked between 2021 and 2025. China's Work Safety Law places responsibility on the principal person in charge of each business, and I review each plant director's safety record with the same weight as output; neither can be handed to a safety department. The largest single improvement came from cutting overtime, not from adding procedures.

Domestic vans leave our plants by road for customers' depots; export vans travel by rail to southern ports. We sell in 19 countries across Latin America, Southeast Asia and the Gulf, including right-hand-drive markets such as Thailand and Malaysia, which need their own build sequence. After the car-carrier shortage of 2022 and 2023, I moved export logistics into operations, signed a three-year ro-ro agreement for up to 9,000 vehicles a year and kept containers, two compact vans to a forty-foot high-cube box, as a qualified second route. Every export contract now includes a freight-adjustment clause and a pre-shipment inspection at the port. Delivered damage across export shipments fell from 0.8 per cent in 2023 to 0.3 per cent in 2025. At home we measure delivery against the date the customer asked for, not the date we offered, and fleets see that measure every month.