Deepal

The 160-year machine

Changan’s roots stretch to 1862, when the Shanghai Foreign Gun Bureau — a Qing Dynasty military enterprise — began producing weapons for imperial modernization. Over a century and a half, the institution evolved through arsenals, motorcycles, and passenger vehicles, becoming one of China’s “Big Four” state-owned automakers. By the 2010s, it commanded annual production exceeding two million vehicles, a network of factories across Chongqing (重庆), and research centres from Turin to Yokohama.

But state enterprises carry a particular vulnerability: scale without agility. Changan watched Tesla seduce China’s urban middle class, watched BYD transform from battery maker to automotive giant, watched dozens of EV startups attract talent and capital that SOEs could not match. The new competitors moved faster, hired younger, and carried none of the institutional weight that comes with a century of state ownership. In 2017, Changan’s leadership launched the Shangri-La Plan (香格里拉计划), pledging to exit pure internal combustion by 2025 and invest ¥100 billion in electrification. The plan was ambitious. Its execution mechanism was not yet clear.

The answer emerged in 2018, when Chongqing Changan New Energy was incorporated with ¥328 million in initial capital. The entity was designed to do something rare in Chinese state industry: operate as a startup within a bureaucracy. It would develop its own brand, its own product line, and its own identity — separate from the parent that built it. A year later, four outside investors injected ¥2.84 billion through China’s first mixed-ownership reform of a central SOE auto subsidiary, diluting Changan to 48.95%. For the first time, a central state-owned automaker had allowed outside capital to take a majority stake in a core subsidiary. The institutional vessel was built. It needed someone willing to fill it with personal conviction.

Skin in the game

Deng Chenghao (邓承浩) was thirty-five years old, a Tsinghua-trained mechanical engineer who had spent a decade in Changan’s powertrain division filing patents for electric drive systems. When the company asked him to lead the new energy subsidiary, he agreed — and then did something no one at Changan expected. He invested ¥5 million of his own money. He did not have ¥5 million. So he sold his wedding apartment, took out loans, and showed up to lead a state-owned brand with the financial exposure of a founder.

“Persuading myself was the easy part,” Deng later told 21st Century Business Herald. “Persuading the team to come together was hard. Collectively, we scraped together over 100 million yuan for this company.”

Ninety-six colleagues followed him in. Engineers, middle managers, and technical staff — ninety-seven people in total — invested personal capital into Deepal’s Series B round. Some mortgaged apartments. Others emptied savings accounts. In a Chinese state enterprise, where employment is stable and risk is institutional rather than individual, the collective bet was unprecedented. It created something that no amount of top-down restructuring could manufacture: a culture of ownership where every employee who had invested knew that the brand’s survival was personally consequential.

Deng became the youngest executive on Changan’s board. His internal nickname was “Engineer Deng” (邓工) — and he made no effort to shed it. “My personal ultimate goal is to become Deepal’s CTO, not its CEO,” he said in a year-end interview. “I love professional engineering and I’m willing to dig deep into it.” The engineer’s conviction would be tested almost immediately.

879

On April 13, 2022, Deepal formally launched its first vehicle: the SL03 sedan, priced from ¥171,900 to ¥699,900. Ten thousand orders landed in thirty-three minutes. The hype was intoxicating. Chinese automotive media declared the arrival of a legitimate challenger in the mass-market EV segment. Inside the company, ninety-seven investors watched the numbers with something more personal than corporate interest.

Then the deliveries began — or, more precisely, failed to begin. July produced a trickle. August 2022 produced 879 SL03 units. Not 8,790. Not 879 per day. Eight hundred and seventy-nine vehicles in the entire month, while thousands of customers who had paid deposits waited for delivery dates that kept shifting. For a brand that had generated five-figure pre-orders in half an hour, the gap between demand and delivery was not merely disappointing. It was existential.

The production shortfall was only the surface wound. Beneath it, quality problems erupted with a speed that threatened to destroy Deepal’s reputation before it existed. Owners reported “ghost braking” — the vehicle applying emergency brakes at highway speeds without cause. Thirteen such incidents were documented across consumer complaint platforms. The advertised memory specification of 12GB plus 128GB storage turned out to be 8GB plus 64GB — a discrepancy Deepal attributed to dual operating systems, but which consumers experienced as deception. Seat defects, software glitches, and battery inconsistencies from mixed suppliers — some cars received CATL cells, others the less trusted CALB — compounded the damage.

Chinese automotive quality watchdog Chezhiwang (车质网) issued a public warning advising consumers against purchasing Deepal vehicles. The complaint-to-sales ratio reached 0.76 percent. For comparison, Li Auto’s L8 — a competitor launched in the same period — recorded 0.02 percent. Owner open letters demanding compensation circulated on Weibo and WeChat. The brand that ninety-seven employees had mortgaged their homes for was being publicly labelled defective.

Deng later described the second half of 2022 as “Deepal’s darkest period.” The phrase carried a weight that corporate euphemisms usually conceal. A new EV brand survives or dies on its first-year reputation, and Deepal’s was in tatters. The early adopters whose enthusiasm should have generated word-of-mouth referrals were instead writing complaint letters. Somewhere in Chongqing, ninety-six families who had followed their colleague’s conviction into collective equity were watching a quality crisis unfold on the platforms their neighbours read. The institutional bet that mixed-ownership reform had enabled was, in its opening months, failing publicly and completely.

Changan responded not by retreating but by doubling down. The parent company spent ¥1.332 billion to buy back its stake to 51 percent, restoring majority ownership it had voluntarily relinquished during the mixed-ownership reform — a signal that the 160-year institution would absorb losses rather than abandon the experiment. It was a lifeline, but it solved nothing about the cars themselves.

The turnaround

Deng’s diagnosis was operational, not strategic. The product concept was sound; the market wanted the car. The execution machinery was broken. He restructured the entire organization in what he later claimed took one week — flattening the hierarchy, reorganizing product lines around user research rather than engineering departments, and establishing direct accountability chains from factory floor to executive suite. The middle management layer expanded from twenty people to over one hundred, filling gaps in quality oversight that the launch had brutally exposed. Deng personally visited five cities during the S09 pre-sales campaign and sold seven cars himself — the CEO of a company backed by a 160-year state enterprise, standing in showrooms doing retail work.

The supply chain received equal surgery. The mixed-battery problem — CATL and CALB cells in identical vehicles — was resolved through standardized sourcing agreements. Production scheduling was rebuilt around delivery commitments rather than manufacturing convenience. When the S7 SUV launched in June 2023, Deepal introduced “delivery on launch day” as an explicit rebuke to the SL03 debacle. The message to consumers was deliberate: we heard you, and we fixed it.

By December 2022 — four months after the 879 nadir — the SL03 crossed 10,000 monthly deliveries, the fastest any Chinese EV brand had reached that threshold. By September 2023, cumulative deliveries passed 100,000 in just fourteen months, another speed record for a Chinese new energy vehicle brand. The crisis had not been forgotten, but it had been answered with velocity that only an organization combining state resources with startup urgency could produce.

On March 27, 2023, the brand formally dropped the Changan prefix. The legal entity became Deepal Automobile Technology Co., Ltd. — a name that carried no trace of its 160-year parent. The rebranding was both practical and symbolic: Deepal needed to attract young buyers whose median age was ten years below Changan’s customer base, and the state-enterprise lineage was a liability in a market where startup energy equalled credibility. Changan became the silent investor, not the visible parent. The product portfolio expanded rapidly — the S07 SUV, the L07 sedan, the compact S05 — each incorporating Huawei’s Qiankun intelligent driving system at price points below ¥200,000, a combination no competitor could match.

The 2023 sales target of 200,000 units was cut to 100,000 midway through the year; Deepal achieved 136,912 — short of the original ambition but enough to establish a growth trajectory. In 2024, annual deliveries reached 243,894, a 78 percent increase year on year. Monthly volumes exceeded 36,000 units by the fourth quarter, crossing the break-even threshold that Deng had publicly defined at 24,000 to 26,000 units per month. For the first time, the brand achieved monthly profitability.

From Chongqing to Rayong

The domestic recovery funded an international ambition that no Chinese state-owned EV brand had previously attempted. Deepal’s dual-powertrain strategy — offering both battery-electric and extended-range electric configurations across every model — gave it a flexibility that pure-BEV competitors lacked in markets where charging infrastructure remained sparse. In November 2023, Deepal launched the L07 and S07 at Bangkok Motor Expo, entering a Thai market already crowded with Chinese EV competitors. Within eighteen months, Deepal ranked among Thailand’s top four new energy vehicle brands by cumulative sales.

On May 16, 2025, the first Deepal S05 rolled off the production line at Rayong — making Deepal the first Chinese state-owned new energy vehicle brand to operate an overseas factory. The facility’s initial annual capacity of 100,000 units is planned to expand to 200,000 by 2027. Right-hand-drive production capability opens pathways to Australia, New Zealand, and the United Kingdom — markets that Chinese EV brands have struggled to serve from domestic factories.

In Europe, Deepal opened a Munich headquarters and began S07 sales in Norway at approximately forty-five thousand euros. A spare parts warehouse in the Netherlands and more than 500 employees across eight countries established the operational backbone for continental expansion. By December 2025, when cumulative global deliveries crossed 700,000 and a C-round raised ¥6.122 billion, Deepal was present in approximately 100 countries and regions across five market clusters: Southeast Asia, the Middle East, Latin America, Eurasia, and Europe.

The unresolved bet

Deepal’s trajectory is genuinely remarkable — and genuinely incomplete. Annual sales targets have been missed every year since launch. Cumulative losses through October 2025 exceeded ¥88.99 billion. Net assets remain deeply negative. The brand set a 500,000-unit target for 2025, later revised to 360,000; it delivered 333,117. In September 2025, Deng was promoted to Chairman and replaced as CEO by Jiang Hairong, a former Honor and Huawei marketing executive — a transition that can be read as recognition of Deng’s engineering-first leadership or acknowledgment that the brand needs commercial instincts he does not possess.

What cannot be disputed is what the collective bet produced. Ninety-seven employees who invested their personal savings into a state-owned subsidiary created a culture of accountability that survived a quality crisis, a delivery failure, and three years of losses. “Deepal always has a sense of crisis,” Deng said in his final interview as CEO. “If you get too comfortable, when the wolf comes, you’ll have no answer.” Whether that culture of permanent urgency can deliver sustained profitability — and whether the 160-year machine can truly let its youngest brand run free — remains the open question. The homes are still mortgaged. The bet is still being settled.

最后更新: 2026年7月11日