Zhenghao Innovation: A Life-and-Death Breakthrough | Wang Lei | Energy Storage | Wang Tao | Liu Wei | Huabao | Photovoltaic Components
In 2024, Zhenghao’s revenue reached nearly 8 billion RMB, a remarkable growth of almost 80% compared to the previous year’s 5 billion RMB. However, beneath this impressive performance lies a story of survival and resilience.
2023 was a dark year for Zhenghao. As the Russia-Ukraine conflict began to wind down, abrupt domestic policy changes led to a slowdown in the company’s growth and a delay in its IPO. The much-anticipated second growth curve, represented by the lawn mower project, turned out to be costly and disappointing, ultimately leading to a painful exit from the venture. The mounting pressure on performance began to take its toll, revealing internal conflicts within the company, resulting in some early investors pulling out and key employees resigning. Zhenghao found itself adrift like a ship in a vast ocean, at risk of being overwhelmed by gigantic waves.
In this critical moment, founder Wang Lei decisively adjusted the company’s strategy, pushing for organizational change and adopting Huawei’s Integrated Product Development (IPD) management system. This move successfully pulled Zhenghao out of the mire, allowing it to navigate through adversity. However, 2025 promises to be anything but tranquil. The home energy storage market presents fierce competition from giants such as Tesla and Huawei, while innovative companies like Anker are also vying for market share. Can Zhenghao maintain its esteemed position?
This article explores Zhenghao’s tumultuous journey, highlighting how, against the backdrop of a globalized market, technology companies can evolve through organizational transformation in order to navigate industry downturns and reach new heights.
01 Team’s “Dimensionality Reduction”: Zhenghao’s Ascent
In 2023, Zhenghao overtook Huabao New Energy to claim the top market share. From an industry perspective, this outcome was both surprising and expected. The attention and expectations surrounding Zhenghao have always been high, but few anticipated such a swift rise to the top. Zhenghao has redefined the industry through its technological prowess and innovation.
Founded in 2017, Zhenghao was not the industry’s pioneer; Huabao New Energy had been established for five years and had a two-year head start in the outdoor power supply sector. The key to Zhenghao’s rapid ascent lies in its core team, which originates from DJI. Founder Wang Lei, who earned his PhD in Mechanical Engineering from the University of Hong Kong, previously led the battery development department at DJI. Under his leadership, the flight duration of DJI drones increased from 20 minutes to over 30 minutes.
Wang Lei possesses a high vision and strong charisma. During lunch breaks, he typically enjoys home-cooked meals while engaging in casual discussions with colleagues about business matters. In 2016, he recognized the immense potential of the energy storage market and the concept of energy freedom. He proposed to DJI’s founder, Wang Tao, that product innovation could enable various electrical devices to operate freely outdoors, but this vision did not resonate with Wang Tao.
The following year, Wang Lei left DJI to establish Zhenghao, bringing in former colleague Chen Xi as CTO. Chen, who had worked in the flight control department, initially considered joining Makeblock, founded by Wang Jianjun, but ultimately chose Zhenghao due to fortuitous circumstances. Chen is not only technically skilled but also possesses strong product insights. His multifaceted abilities enable him to excel in product development, as he is adept at coding, soldering, and understanding product structure design. Chen also has a penchant for philosophical thinking and has formed an internal “cultivation group” consisting of many core team members.
Between 2016 and 2019, Zhenghao launched the groundbreaking product DELTA 1300, addressing the traditional product pain points of slow charging and inability to power high-wattage appliances, which led to its success. Zhenghao’s commitment to quality and innovation is evident, as the company has consistently rejected shortcuts and imitation since its inception, instead focusing on new technologies and product forms.
02 Seizing Market Opportunities: The Rise of the “Outdoor Power Supply King”
Following the achievement of brand recognition through product strength, Zhenghao found itself in a favorable position due to the substantial market dividends from the Russia-Ukraine conflict. Having made early investments in Europe, Zhenghao quickly secured the top market position. The trajectory of surpassing Huabao New Energy seemed inevitable, given the significant differences in product offerings, user targeting, market selection, and sales strategies.
While both companies cater to outdoor scenarios, Huabao New Energy focuses more on outdoor enthusiasts, whereas Zhenghao balances family usage scenarios. The design styles of their products reflect these differences: Huabao’s products feature bold orange-yellow and black colors for visibility in outdoor settings, while Zhenghao favors a minimalist Scandinavian aesthetic that integrates seamlessly into home environments.
Zhenghao has prioritized a global market strategy, emphasizing European markets, which place a high value on outdoor and environmentally-friendly products. When the energy crisis hit Europe, consumer demand surged for energy storage products as electricity prices skyrocketed, leading to rapid sales growth for Zhenghao, while Huabao New Energy missed out on this opportunity due to its lack of focus on Europe.
By the first half of 2023, Zhenghao achieved a 35% global market share, effectively changing the landscape of the industry. In contrast, Huabao New Energy’s decision to hastily flood the European market backfired when the energy crisis abated, resulting in significant inventory accumulation and a decline in market share.
03 Stagnation in Core Business and IPO Delays
Just as Zhenghao was beginning to enjoy the fruits of its success, the company faced significant challenges. In 2022, the outdoor power supply market became overheated, attracting numerous new entrants, resulting in oversupply. As the energy crisis in Europe eased and consumer demand waned, the market for outdoor power supply products plummeted. Zhenghao was not immune to this downturn, accumulating substantial inventory.
In response to the heated energy storage market, the China Securities Regulatory Commission implemented six regulatory measures regarding IPOs and refinancing, signaling a tightening of policies. This led to a drastic reduction in Huabao New Energy’s market value and the suspension of IPO plans for both Zhenghao and its competitor, Delanminghai. As a result, Zhenghao’s valuation suffered significantly, with estimates for 2023 placing its revenue at approximately 5 billion RMB, stagnant compared to the previous year.
Despite its setbacks, Zhenghao’s second growth curve—the outdoor ecological projects—did not meet expectations. The company had announced ambitious plans in 2022 to create an outdoor ecosystem with products like lawn mowers and outdoor refrigerators, but these initiatives faced skepticism about whether they aligned with Zhenghao’s core strengths. Ultimately, the lawn mower project was sold at a loss after failing to gain traction.
04 Internal Conflicts and Organizational Transformation
In 2023, internal conflicts began to surface. Wang Lei faced lawsuits from several founding members, accusing him of misappropriating 6 million RMB in startup funds. This incident caused a stir in the industry, although Wang Lei refrained from extensive commentary. Opinions on the matter are divided, with some believing that Wang’s actions were justified while others speculate on his motivations.
As the company faced mounting challenges, key personnel began to leave, leading to a significant talent drain in 2023. In response to both internal and external pressures, there were growing concerns about Zhenghao’s potential decline. However, in 2024, the company reported impressive revenue of nearly 8 billion RMB, an almost 80% increase from the previous year.
05 Expanding into Home Energy Storage: Opportunities and Challenges
With the introduction of the IPD system, Zhenghao significantly improved its efficiency and revenue. The company has begun to explore the larger home energy storage market. Unlike outdoor power supplies, the home energy storage market is substantial, with reports predicting a compound annual growth rate exceeding 30% from 2024 to 2025.
While the outdoor power supply market experienced short-term gains due to external factors, the home energy storage market offers sustainable growth driven by essential needs such as power outages and high electricity costs. In regions like Texas and California, frequent power outages have created a significant demand for backup power solutions.
However, Zhenghao faces formidable competition from industry giants such as Tesla, Huawei, BYD, and CATL. These companies not only possess advanced technology and ample financial resources but also have significant brand influence and market reach. The technical and stability requirements for home energy storage products present a significant challenge for Zhenghao, and the company must also navigate the complexities of installation and service capabilities.
Despite these challenges, Zhenghao has made notable progress in home energy storage. The company is actively engaged in differentiating itself through pricing and service innovations. For instance, Zhenghao is exploring low-cost, easy-to-install balcony energy storage products, a market segment in which Anker has gained traction.
06 Conclusion
The journey of Zhenghao Innovation—from its peak to its lowest points and back again—mirrors a condensed history of business resilience. With market advantages beginning to fade, the former “dark horse” of energy storage has leveraged organizational transformation through the IPD system to enhance efficiency and find stability amid uncertainty.
As the company prepares to take on the home energy storage market, it must contend with intense competition from established players and innovative challengers. Time is of the essence for Zhenghao to solidify its position in an ever-evolving landscape. In this ongoing global competition, how will Zhenghao continue to elevate the industry to new heights?
