Inside the slow, strange collapse of electric delivery startup Chanje
Gaia. Mother Earth. God herself. Ask the former employees of electric vehicle startup Chanje and they recall slightly different versions of what exactly CEO and founder Bryan Hansel said he saw during an ayahuasca trip in the Amazon rainforest in 2015.
What they know for sure is Hansel repeatedly referred to this experience as a touchstone. It was his reason for founding the startup, which was premised on importing electric delivery vans from China and selling them to companies like FedEx, Ryder, even Amazon. He also recommended employees take ayahuasca to change their perspective at difficult moments, like when some bucked against the meditation quotas — part of a sweeping, mandatory “personal and professional development” program he installed — or when the paychecks stopped coming.
Chanje quietly folded earlier this year, The Verge has learned. The Chinese company Hansel partnered with went bankrupt after its chairman sunk hundreds of millions of dollars into an unsuccessful toll road in Mongolia. Hansel spent months trying to rally investors to buy pieces of that parent company to keep Chanje alive. His effort failed, though, and so he fired the remaining Chanje employees the Friday before Memorial Day weekend.
Six of those former employees, who spoke to The Verge on the condition of anonymity throughout the year, describe Hansel as “charismatic” and a natural pitchman, but also a “narcissist,” “manipulative,” a “snake oil salesman and a con man.” Hansel, during an interview with The Verge in November, said he was simply too optimistic about the financial — and geopolitical — challenges Chanje faced the last four years.
Chanje caused real collateral damage for such a small startup. It still owes many of its former employees months of back pay and promised bonuses; at least four have sued the startup. Ryder also sued for more than $3 million after Chanje failed to deliver most of the vans it promised to the fleet company.
The startup’s collapse left FedEx in the lurch, too. Chanje promised the shipping giant 1,000 electric delivery vans, but never delivered them. It also abandoned a project to build out charging infrastructure at FedEx depots across California — infrastructure that was meant to be the groundwork for the company’s $2 billion push to become carbon neutral.
FedEx is now suing Chanje in an attempt to recover some of the millions of dollars it paid for that charging infrastructure. But as Ryder has already found out, there may not be anything left — and Hansel has already moved on to his next big pitch.
Chanje wasn’t Bryan Hansel’s first foray into electric vehicles. In fact, the startup’s origins are more complicated than an inspirational drug trip.
Before Chanje, Hansel worked at a company called Smith Electric Vehicles. It’s the oldest electric vehicle company in the world, founded in 1920 in the United Kingdom. Smith spent much of the 20th century building short-range electric delivery vehicles and, at one point, held the exclusive rights to make electric Mister Softee ice cream vans in the UK.
In 2007, Smith was looking for a way to establish a presence in the United States, which was home to more big fleet companies and was starting to see much larger investments in the clean energy space. Hansel had spent years working in product development and had previously bought a company from the investment firm that owned Smith. That firm tapped Hansel to become the CEO of a new Smith US subsidiary in early 2009 — despite his lack of experience in the auto industry.
“I knew nothing about electric vehicles, but it was just another product, and I felt the timing was right,” Hansel says.
The US had become such a hot spot for early electric vehicle hype that, in March 2010, Hansel made a bold pitch: he wanted the US subsidiary to buy out the parent company in the UK. Smith’s owners accepted.
Smith became an American company as the world was reeling from the financial crisis. But the US government started investing in green tech companies as it tried to rescue the economy, and the Obama administration believed it found a darling in Smith.
Standing in front of a bright green-and-white Smith Electric van in July 2010, then-President Barack Obama stumped for his administration’s decision to toss the company a $32 million Recovery Act loan. (Smith also received a $10 million Department of Energy grant.)
Smith’s employees were helping the US fight through a “vicious recession” and “building the economy of America’s future,” Obama said. Investments in clean energy were going to inspire a wave of new jobs “year after year after year, decade after decade after decade, as companies like Smith, that start small, begin to expand,” he said.
Then, Obama revealed Hansel had pitched him something big: “I was just talking to your CEO, and he says he wants to open up 20 of these [factories] all across the country, so that in each region … Smith is able to service its customers, and they’re going to have a reliable sense that Smith is always going to be there for them.”
Hansel and Smith tried to ride the White House’s support to an initial public offering in late 2011. But by the time the deal was ready, the market had soured on clean tech startups. Hybrid sports car startup Fisker Automotive recalled its cars after problems with the batteries, and the Department of Energy froze its credit line. Solar car startup Aptera folded at the end of 2011 after failing to meet the requirements for a loan from the same DOE program. Most notoriously, solar panel company Solyndra went out of business after Chinese companies flooded the market with cheaper products.
Smith pulled the IPO in 2012. The following year, it stopped production at the Kansas City factory and abandoned plans for two other locations — meaning the country would never see the 20 factories Hansel had promised to Obama.
Smith was saved in 2014 by a $42 million investment from Chinese battery supplier Sinopoly, and Hansel once again tried to turn it into a public company — this time by acquiring a business that was already listed on the over-the-counter markets with no revenue and only one employee. But that deal ultimately fell apart, too.
With Smith limping, Hansel joined his daughter on a 10-day trip to the Amazon rainforest in Ecuador in early 2015. They stayed with an indigenous tribe, and while there, Hansel took ayahuasca.
The drug “floored him,” a person with knowledge of the excursion said. Hansel rolled in the nearby river mud until Gaia appeared, he explained to the group the next day. “[She] tells him he needs to get his shit together and start being part of the solution and stop being part of the problem,” this person said.
Hansel’s daughter blogged about the trip: a photo of her and her father, adorned with tribal face paint, sits atop the post. While there are no explicit references to ayahuasca, she quotes her father describing the experience. “One of the most important elements is the exposure to the existence of the Amazon and understanding the delicate reality of its existence, being immersed in it,” Hansel said about the trip.
Looking back now, Hansel tells The Verge it was “a transformational trip.”
“There’s no question it changed my life forever,” he says.
After Hansel returned from the rainforest, he pushed to create a new electric vehicle startup to be jointly run by Smith and Five Dragons Group — the Chinese electric vehicle maker that owned Sinopoly. Five Dragons was already designing what Hansel says was the “[Tesla] Model S” in the commercial EV space in China. He felt the best opportunity was to create a new company that would primarily focus on selling FDG’s vehicle stateside. Smith agreed to do engineering work on Five Dragons’ vans so they could be legally sold in the US.
“If we can have this product in the US, we win,” Hansel says he remembers thinking at the time.
After cycling through a few initial names, Hansel at one point settled on “Nohm” — the given reason at the time being that “an ohm is the measure of electric resistance. Our vision is a world in which there is no resistance to positive energy.”
In 2016, Hansel would ditch Nohm for another name: Chanje.
That’s when things got contentious. Smith sued Five Dragons Group in 2016 (PDF), and accused Hansel of conspiring with a Five Dragons executive named Jaime Che to create Chanje as a way to rob Smith of its intellectual property. Hansel, acting as an “undisclosed agent” for Five Dragons, “improperly exploit[ed]” his role as CEO of Smith to bait the board into what was ultimately a trap, according to the lawsuit.
Hansel dragged his feet sourcing orders for Smith’s electric vans, which were ready to go and which Chanje was also supposed to sell, according to the suit. This cut off Smith’s only possible source of revenue and “backed [it] into a financial corner.” So Hansel and Che offered Smith a $2 million loan from Five Dragons — which, crucially, was secured by 50 percent of Smith’s stock in Chanje.
After Smith took the loan, Five Dragons demanded the Kansas City…