If the four major domestic brands—fueled by the nearly endless supply of materials Jason brings from the other world —can meet local demand and move into the international market, the impact will be catastrophic for Samsung. Armed with massive batteries, incredible longevity, and fast charging at a low price point, the domestic manufacturers are poised to deliver a devastating blow to the South Korean giant.
The four-star manufacturer had considered playing dirty by strangling the supply of high-end components, but that would be a double-edged sword. While domestic brands might struggle with high-end chip manufacturing, any move to cut them off would simply be an assist to TSMC or force local companies to accelerate their own breakthroughs.
Lee Jae-yong looked at his other leverage points: mobile phone screens, memory, and flash memory. While Samsung leads the world in these fields, domestic competitors like BOE and Tianma for screens, and Yangtze Memory for flash storage, are catching up fast. For the average user, the difference in screen quality is negligible compared to the massive leap in battery life offered by Longjing technology.
He had to face a hard reality:
The Battery Advantage: A domestic phone with a slightly inferior screen but a ten-fold increase in battery life is far more attractive than a high-end Samsung that dies in half a day.
The Risk of Overplaying: If Samsung tried to cut off screen or memory supplies, it would only force the "flower-growing" companies to innovate even harder.
The "Cabbage Price" Effect: Historically, once domestic companies break a foreign monopoly, the price of that technology drops to "cabbage prices," sweeping the former monopolists into the trash heap of history.
Lee Jae-yong dared not gamble. He had already seen one-third of his battery factories stop production because they couldn't secure orders. Foreign manufacturers are no longer interested in traditional lithium; they only have eyes for the Longjing batteries produced by BYD and CATL.
Every time a report surfaces regarding the Academy of Planters making progress with lithography machines, Lee Jae-yong trembles. If the West loses its lead in semiconductor manufacturing, there will be nothing left to hold back the tide. The title of the world's most powerful nation will inevitably shift, and as a loyal "son" of the US, Samsung fears what a new "master" might do to those who previously stood against them.
He isn't alone in his bitterness. The president of Panasonic, once one of the world's top three battery makers, is facing a similar crisis. Their "golden goose" customer, Tesla, has already begun looking toward CATL and BYD for Longjing-powered batteries. When Panasonic complained to their American counterparts, they were met with silence. After all, in the eyes of Washington, a Japanese company is just a "godson," while Tesla is family.
The Panasonic executives have spent weeks in the capital, but the negotiations have been grueling. The Department of Commerce has clear rules:
"Any manufacturer wishing to purchase Longjing materials must invest in local factories and adhere to strict Export Restriction Regulations to prevent the technology from reaching foreign military sectors."
Elon Musk remains optimistic, however. Because Tesla has its massive factory in Shanghai, it can purchase power batteries locally, assemble the cars, and export them to the US and European markets.
But even Musk faces a supply problem. The output of Longjing power batteries is currently being swallowed up by domestic phone manufacturers and a long list of local EV brands like SAIC, Great Wall, Nio, and Xpeng. There simply isn't enough to go around.
Realizing he can't win a price war in the domestic market while supply is low, Musk has devised a new strategy:
Exit the Local Price War: Tesla will pivot away from competing for domestic sales in the short term.
Focus on the West: Every Tesla equipped with a Longjing power battery—offering a 1,500 km range and a one-hour full charge—will be sent to Europe and the US.
Maximize Profits: By using the low labor costs of the local factory and the high demand for revolutionary range overseas, Musk hopes to dominate the Western market while everyone else is still fighting over the limited battery share at home.