news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

The electrification of trucks is the "second feast" after the electrification of passenger cars. Wan Jun believes that China's new energy heavy trucks must be built for the world.

Text｜Wang Wentong

Editor: Ma Jiying

Source of header image｜Interviewee

"Eighteen deaths and two lives." This is what Wan Jun, founder and CEO of DeepWay, said when talking about his experience of starting a business.

In December 2020, 8 years after founding the commercial vehicle financial services company Lionbridge Financial Leasing (China) Co., Ltd. (hereinafter referred to as "Lionbridge"), Wan Jun chose to start a business again in the new energy smart heavy-duty truck industry and joined forces with Baidu and Lionbridge to establish DeepWay.

Almost everyone around Wan Jun was against starting a second business, believing it was doomed to fail."Why can you see this opportunity when others don't?" Wan Jun's liberal arts background and work experience are difficult to associate with intelligence and car manufacturing. In 1994, Wan Jun received a bachelor's degree in economics from Renmin University of China, and then went to China Europe International Business School to study for an EMBA. In 2012, he founded Lionbridge, which focuses on the field of automotive finance.

But Wan Jun believes that the vast domestic market, complete supply chain, strong engineering team and Wan Jun's many years of understanding of the truck industry are the basis for his entrepreneurship.

According to a research report by Soochow Securities, domestic sales of new energy heavy trucks will reach 34,000 units in 2023, a year-on-year increase of 36%, and the penetration rate will increase to 5.6%. In addition to short- and medium-distance transportation, long-distance trunk transportation is expected to make further breakthroughs.

As of now, DeepWay has received three rounds of financing from Qiming Venture Partners, Weichai Capital, SoftBank China Capital, etc., with a cumulative amount of over 1.3 billion yuan.

On May 31, 2023, DeepWay delivered the first batch of mass-produced electric tractors.Become the first new energy intelligent heavy-duty truck to achieve mass productionAs of May 31 this year, DeepWay's cumulative deliveries have exceeded 1,000 units.

This pace is not fast. Wan Jun analyzed that the explosion of the new energy intelligent heavy truck industry needs the further maturity of the supply chain. The whole vehicle has to go through a complex process from testing, production to final inspection, and the delivery rhythm also needs to be controlled.

Currently, DeepWay only has one heavy-duty truck model, with monthly deliveries controlled at around 300 units. This year, the company's delivery target is 3,000 units.

An "unreasonable" product manager

For Wanjun, the second venture is a transformation from a liberal arts student to a product manager.

In 2020, according to data provided by the Commercial Vehicle Professional Committee of the China Automobile Dealers Association, the financing scale of commercial vehicle finance nationwide has exceeded 550 billion yuan, a year-on-year increase of more than 33%. In that year, Lionbridge's annual investment was 32.6 billion yuan, reaching the largest amount of funds invested by commercial vehicle finance companies without OEM support. Wan Jun is thinking, where is the new business growth point?

At the same time, the cooperation between Lionbridge and Baidu seems to have lost its way.

The cooperation between Baidu and Lionbridge can be traced back to 2018. Baidu sought to implement autonomous driving technology in commercial vehicle scenarios and made a strategic investment in Lionbridge.

At that time, the direction they were exploring was to cooperate with mature OEMs to develop autonomous driving solutions.But after trying for more than two years, Wan Jun found that this approach was simply not feasible.

Wan Jun analyzed three reasons:

First, the goals of OEMs and autonomous driving solution companies are not completely consistent, and they will also be "guarded against" each other.

"Autonomous driving is the soul of OEMs. During the cooperation, OEMs will learn from each other and may even think about their own end. However, an autonomous driving solution company cannot serve only one OEM. Both parties stand on different positions and cannot be completely united."

Second, from a technical point of view, it is too expensive to retrofit autonomous driving on existing models. "Each mature model has gone through decades of development, just like building a building. It was originally planned to be an office building, but now it is changed to a residential building. All the drainage, layout, and ventilation must be replanned, which is very costly and time-consuming."

Third, OEMs tend to install autonomous driving technology on fuel vehicles, but in Wanjun's vision, autonomous driving should be naturally combined with electric vehicles. "Electric vehicles have powerful digital signals and control capabilities, which naturally provide greater support for autonomous driving."

After confirming the direction, Wan Jun and Baidu reached a new cooperation intention and founded DeepWay, the first new heavy-duty truck manufacturing company in China, in Beijing.Baidu mainly invested in the company with technology, holding about 49% of the shares. As the chairman of the new company, Wan Jun not only often followed the engineering team to the racing track and conduct tests, but also invested all the money he could mobilize into the new company.

Unlike other mature OEMs, DeepWay's approach is to rely on forward design based on the first principles of electric drive."In 2018, after NIO released the ES8, a new era of electric vehicles truly began. In just seven or eight years, the penetration rate of new energy passenger vehicles has increased from less than 5% to nearly 40%. Without forward design, such a fast growth rate would not be possible," said Wan Jun.

Compared with the first time, the challenge of starting a business again lies in the continuous increase in product research and development and the judgment of market trends. The first thing Wanjun needs to do is to find the right people.

"Old Tan (Tan Changyu, chief engineer of DeepWay) came from Sany Heavy Truck, and Mr. Tian (Tian Shan, CTO of DeepWay) was originally the person in charge of autonomous driving for Baidu's commercial vehicles. With them as a foundation, we worked together to find people, and slowly this team was put together," said Wan Jun.

In his opinion, liberal arts students also have advantages when working as product managers, which is that they can start from the user's perspective and become more "unreasonable"."Sometimes I tell them, 'I want this, and you guys go find a way for me,' and after pushing them hard, they finally make it."

It is inevitable to fall into traps.

For example, in order to reduce wind resistance, enhance the sense of technology, and make the door easy to close, DeepWay's first-generation car doors adopted an electric door solution that can be opened with a light press. However, this design has attracted many "complaints".

The reason is that although electric doors are convenient, the cost of electric door solutions is relatively high for the logistics and transportation industry where economy is paramount.

"This is a typical self-centered design. Compared with the easy closing of the door, many truck drivers prefer the solid feeling when closing the door manually, and they also pay more attention to the increase or decrease of actual operational value." Wan Jun reflected.

Wanjun believes thatThe process of "stepping into pits" is also a process of continuous product iteration.He introduced that based on the further understanding of different scenarios and the needs of different groups of people, there will be small iterations of car models almost every month.

Building a supply chain: taking a gamble

"Entrepreneurs must learn to be alone, endure loneliness, and be good at being alone. But loneliness does not mean giving up." When the business is stuck, Wanjun's way of relieving anxiety is to do some small things that he can accomplish: such as helping sales to win a customer, or talking to suppliers about the cooperation price. Even if the cost is reduced by only one cent, he can feel a sense of accomplishment.

In order to achieve mass production, the biggest difficulty Wanjun and his team need to overcome is building the supply chain.

"Suppliers are our lifeline. Even if we have to tighten our belts internally during the most difficult times, we still have to ensure payment to suppliers," said Wan Jun.

Based on forward design and the principle of electric drive first, DeepWay's most typical innovation is to replace the central integrated drive with a distributed electric drive axle. The former eliminates the longitudinal axis in the latter structure, shortens the transmission chain, effectively reduces energy consumption and improves drive efficiency.This is the first time that this has been achieved in a Chinese electric truck.

In order to find a suitable supplier of distributed electric drive axles, DeepWay communicated with four or five companies, but most of them were on the sidelines and hesitant. After several rounds of negotiations between the technical and business teams, only Suzhou Green Control Transmission Technology Co., Ltd. (hereinafter referred to as "Suzhou Green Control"), also a startup, recognized the direction that DeepWay wanted.

“We both took a huge risk at the time, since we were a startup company and didn’t have a lot of financial resources.Passion can overcome any difficulty, so we decided to take a gamble and give it a go."Wan Jun said. After the successful cooperation, DeepWay has brought market influence and credibility to Suzhou Green Control. Now Suzhou Green Control's electric drive axle has become the first choice for most new truck manufacturers. This is a typical case of mutual achievement.

As for the battery supplier, DeepWay chose CATL. After several rounds of communication, CATL independently developed a lighter and lower-power electric truck battery pack for it. After the cooperation was reached, Wan Jun drove DeepWay's tractor and took CATL executives for two laps.

In addition, DeepWay's energy solutions include charging and battery swapping. The battery swapping network built by CATL has also created conditions for the operation of DeepWay's battery swapping models.

The first customer of DeepWay is also a carrier of CATL. Wan Jun joked,At first, the customer bought 20 DeepWay tractors at one time with the mentality of being a "cannon fodder", but unexpectedly, he got excess returns.

Take economy as an example. The DeepWay tractor can achieve a range of 300 kilometers when fully loaded with 49 tons, and the average power consumption of the vehicle in a comprehensive scenario of fully loaded 100 kilometers drops to 150kWh. According to Wan Jun's calculation, the 5-year TCO (total cost of ownership) of a DeepWay tractor is 20% to 30% lower than that of a gasoline vehicle.

In Wanjun's opinion, the most basic function of a truck is durability and the ability to save money for the driver. Therefore, "low energy consumption is the foundation of everything we do. The reason why DeepWay has achieved a little success today and is still "alive" is thatThe most fundamental reason is that we are paying close attention to energy consumption.”

In addition to the door handles mentioned above that reduce wind resistance, DeepWay will also purchase several hundred kilograms of aluminum for each car it produces. Wan Jun does not deny that this will increase costs, but it is helpful to customers. "Because freight is paid by ton, a 500 kilogram lighter car body can carry 500 kilograms more cargo, so customers are willing to pay for the use of lightweight materials."

Another "feast"

In the view of Qiming Venture Partners, DeepWay's Series A investment institution, the electrification of trucks is the "second feast" after the electrification of passenger cars and cannot be missed.

But judging from the actual progress, the arrival of this feast did not happen overnight.

In 2016, Tesla proposed the concept of the pure electric truck semi, which was unveiled at a press conference in November 2017. However, the subsequent mass production of semi has been full of twists and turns.

Wan Jun believes that the failure of semi to achieve large-scale mass production is not due to problems with the electrification technology itself, but rather that Tesla's previous experience with passenger cars is not fully compatible with commercial vehicles. The more important reason is that the commercial vehicle supply chain in the United States is very weak and cannot support its large-scale mass production and delivery.

How to choose between the two technical routes of hydrogen energy and electrification is also a question that Qiming Venture Partners is considering.

Wan Jun explained that DeepWay insists on using the same platform for hydrogen and electricity, electricity first and hydrogen later, and has a clear path for changing power and hydrogen energy technology reserves, but he believes that in two to three years, the electrification of trucks will have significant development.

In the end, the two sides reached a consensus - hydrogen energy may become an important power source for long-distance trunk transportation in the future, but it will take at least three to five years to commercialize hydrogen energy.

In July 2022, DeepWay, which had been established for less than two years, received a RMB 460 million Series A financing from Qiming Venture Partners.

Weichai Group (hereinafter referred to as "Weichai Group") is DeepWay's A+ round investor.

Wan Jun explained that DeepWay and Weiqiao Group's products complement each other. DeepWay needs to use the aluminum produced by Weiqiao Group to achieve lightweight. Weiqiao Group's short-distance bulk transportation scenarios also provide DeepWay with a demonstration opportunity. At the same time, Weiqiao Group's high-energy consumption and high-pollution heavy industrial characteristics also require DeepWay's green smart transportation system to help it save energy and reduce emissions.

When facing investors, Wanjun’s financing experience is to “keep promises.” He will communicate closely with all potential investors and report the progress and breakthroughs of each stage according to the pre-agreed time nodes.

This way of doing things won Wanjun the favor of more than one investor and also obtained support from government funds.

Wan Jun recalled that when DeepWay held its first brand strategy conference in 2021, the Hefei government contacted them, but said that they would not invest for the time being and only hoped that the company would "pay attention to Hefei." After that, when there was business progress, Wan Jun would inform the relevant person in charge in Hefei via WeChat.

On November 22, 2023, DeepWay reached a cooperation with Hefei City, Anhui Province, and will establish DeepWay's headquarters, sales settlement center, etc. in Feixi County.

How to face possible competition with Tesla Semi in the future?

Wan Jun believes that the company is not without advantages, because in terms of new energy heavy-duty trucks, DeepWay has faster delivery and has more accumulation than Tesla in new energy heavy-duty truck technology, data accumulation, supply chain and market reputation.

"Although this is only a slight advantage, we will find ways to lower the price and improve the performance. Commercial vehicle to B users are very rational. They don't care about reputation, but only about effectiveness," said Wan Jun.