On Thursday, April 20th, our CEO Raymond Wang had a fireside chat with Graham Mattison of Water Tower Research to discuss the power of Greenland Technologies’ manufacturing capabilities and how HEVI, the all-electric heavy equipment division, is turning heads and gearing up to capture 3% of the market.

Check below to listen to the full broadcast, or read the transcript here.

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GTEC, HEVI, and All-electric Equipment

A Fireside Chat with Raymond Wang & Water Tower Research LLC


Graham Mattison – Senior Research Analyst, Water Tower Research LLC

Right. Good afternoon, everyone, and welcome to the Water Tower Research Fireside, Fireside Chat series. We’re very excited to have with us today Raymond Wang, the CEO of Greenland Technologies. My name’s Graham Mattison. I’m one of the senior analysts here at Water Tower Research and our sustainability and industrials practice. As a reminder, this call and all of our research is available to everyone on our website at www.watertowerresearch.com

In addition, we will be publishing a report on this in the coming days, and we’ve recently launched coverage on Greenland. We will be taking questions from the audience and those can be submitted via the webcast. Hopefully we’ll have time to get to all of those, but our apologies if time does not allow. So great, thank you, thank you so much for joining us.

As a quick background, Raymond’s been the chief executive officer of Greenland since we went public in 2019. He has a long career in management and corporate governance, has been president and VP of two international companies. And his experience includes business process automation, customer acquisition and logistics. So, Raymond, perhaps you could just start off by telling us what brought you to the company, or, the opportunity, rather?

Raymond Wang – President and Chief Executive Officer, Greenland Technologies Holding Corp.

Absolutely. I joined Greenland for the opportunity to build something meaningful. That was the key thing because when I joined the company, Greenland was at a transitionary stage where we were becoming a public company and we were looking at ways to continue to evolve the business. So I’ve seen its track record of focusing on sustainability and the electrification of various applications in the material handling industries.

And this is something that I wanted to get behind because not only is this an opportunity to build, which is something that I love to do from a business standpoint, but it was building something that’s impactful not just for our shareholders, not just for our clients, but for the next generations as well, by introducing cleaner, more sustainable technologies.

And that was something that won me over to the company.


Graham Mattison

All right, great. So the first question, if I could just look at the transmission business, which means you’re in a unique position that you’ve got this core business, which is, has always been profitable and doing quite well. So it’s not like you’re a start up where you have to burn a couple $20 billion to figure out if it works.

So looking at that business, how has that business evolved over time? And then can you touch a little bit on – actually, maybe just start with that, how has that business evolved over time?

Raymond Wang

Yes. Right now, our product line and capabilities have, has expanded dramatically since when we started in 2006 with rather humble beginnings with the single factory just creating high precision gears for more complex products. But our culture here at Greenland is about focus in delivering the best quality products that we can for our clients. This is a key aspect of our success.

This is part of our secret sauce here at Greenland, which is not to overextend ourselves, focus on mastering one aspect of the business, and then continuing to evolve from there over time. And you see that culture in our product line. So when we started with high Precision Gears, after we established the market, maintained our presence as a quality manufacturer of these, then we began to move further up the product lines to then begin developing transmission units, drive train units for forklifts first, and then we expanded to a greater variety of material handling products from heavy industrial products and machinery exterior, high tech forklifts that go up to 25 tons in size and now even on the light EV market and that also led to the development of our new product line that we’re extremely excited about, which is our integrated drive train unit.

We actually launched this product line in 2022 and essentially what it does is it takes the three critical elements that power a lithium powered forklift, the speed reduction gearbox, the electric motor and a driving axle. And we packaged that together into a single unit that just accelerates manufacturers capability to develop their own lithium forklift products for themselves – speeds it up by about 60%.

And this has become extremely profitable for us because we have a higher margin on this product. It’s been extremely popular. It actually drives and powers the world’s leader in lithium powered forklifts today, which is what we’re extremely proud of. And right now it’s been adopted by nearly a hundred different OEMs on a global scale.

Graham Mattison

Wow. Can you talk was there a big learning curve developing up to the integrated drive train or did it require a lot of CapEx or R&D expense?

Raymond Wang

So we actually have an in-house development team of right around five dozen associates right now just dedicated on identifying the right product to for the material handling market to be ahead of the curve. Right now, we’re at a stage to be able to develop innovative technologies to offer to our clients, to help them maintain their market leader status in their particular industries.

So the development was in-house aligned with our resources, and this is one of the capabilities that we’re able to offer to our clients, which is how we are able to cater to all of the tier one forklift OEMs in the industry, such as Hyster Yale, BYD, Linde, just to name a few.

Graham Mattison

Yeah, that’s the interesting thing with the automotive industry is the same way where the OEMs almost outsource the development problems to their supply network and say, you know, we need this, we need to be more efficient, get us a better tire, get us a better gear, something like that, and it puts the onus on you, but – and I would assume your customers were probably very excited and supportive of you making this move up with them.

Raymond Wang

Yes, absolutely. Absolutely. The key aspect of it is we had the product ready to go before folks were well, folks were just getting on board the electrification of forklifts and moving away from propane and diesel power. Our audience was cautious at first. They were seeing some headways in electrification, but primarily in the lead acid battery array, and there was concern about just upending that market so quickly.

However, the technology was there, our components were ready to go. The development time was not as financially intensive for them. That was the key aspect of the design for the integrated drive train, to reduce their development costs. And then once bigger players adapted with our technology, then it became the floodgates opened and then they all were signing up to the point where right now outside of the United States, about three out of every forklift sold are lithium powered.

Graham Mattison

Wow.  Can you talk about how the transition, not the transition, but how the evolution went from the integrated drive train into the heavy electric equipment business.

Raymond Wang

Absolutely. And the, it follows the same culture that we’ve had through our entire product line because our focus is on trying to develop solutions, high quality solutions that are also ahead of their curve. This way, our clients will be able to capture these opportunity trends to maintain their market share.  And for HEVI, our, our division dedicated to the manufacture of all electric heavy industrial machinery.

This is a division where we wanted to do this for ourselves. We wanted to evolve the business from not just a component manufacturer, but then to also become an OEM for our own product line as well. And that became the genesis for HEVI.  And this was my dream, my vision when I joined the company in 2019, when GTEC became public on the Nasdaq – because we wanted to continue to evolve the business to be able to provide more value, not just to our overall clientele, but now to our shareholders as well.

So we applied our supply and manufacturing capabilities, which is our true advantage. That’s our strength. It’s our ability to manufacture highly complex products at scale while maintaining a high degree of quality. That’s our strength. So we wanted to apply that strength to a application of electrification that no one else was doing at that time or would be doing for some time.

And after researching into different markets, applications, industries and products, that’s how we settled on the heavy industrial equipment sector. These are products like front loaders, excavators, typically machinery you’d see on a construction site. Right now, there’s no clean alternative for these products and they’re big polluters out there. They generate so much emissions, a single gallon of diesel burned creates £22 of CO2 emissions.

And this machinery, they’ll burn between 4 to 10 gallons per hour of use. So replacing one of these with a cleaner option is the equivalent of replacing four transit busses or nearly 30 passenger cars. So these have a big impact on of the market. And it’s a $2,280 billion global market a year. So this machinery, they’re large, they’re very complex and I do not anticipate anyone truly entering this market for another 7 to 10 years.

So that’s why we wanted to target that. This was something that we could develop a product with our manufacturing capability, with our established supply side and with our technology and research teams focus on electrification. And that’s how HEVI was born.

Graham Mattison

And really, it means you were already making the core elements before, this is just taking the next step. It’s not like it’s a new… it’s just a baby step further.

Raymond Wang

That’s right. That’s right. And leveraging the established supply chains that we have and our clientele, we were able to also partner with the right folks from a knowledge for heavy manufacturing for this industrial equipment, integrated our technology and knowledge for electrification together combined, which is what allowed us to create our first product line to market rather quickly and without significant financial cost.

Just like you’re saying, it didn’t cost $20 billion for us to put this together.

Graham Mattison

To build it and hope they come.

Just a reminder, everyone, if you have questions, you can submit them in through the through the chat function.

So first one question and it’s come in and this is a combination I’ve gotten from a few of them, but I think the best way to summarize it is: What gives you that confidence that heavy can come in and successfully compete with players like Caterpillar or John Deere or Komatsu.

Raymond Wang

The biggest answer to that is right now those market leaders are very afraid of electrification.  And you might be asking, “Ray, I see them at the trade shows. They just announced their all electric lines,” and yes, they absolutely do. However, these market leaders are not motivated in any way, shape, or form to truly commercialize these electric lines. The reason being is because they’re market leaders right now with their traditional diesel equipment.

And if they introduce electric, all they would be doing is cannibalizing their own business – because all of these major market leaders like Deere, like Caterpillar, they all sell through the traditional dealership model, and particularly in the heavy industrial machinery industry, those dealerships earn most of their revenue off of these maintenance plans and packages that support these diesel equipments.

But for EV products with less moving parts, there’s no icy engine or system to maintain. So no spark plugs, no filters, none of that. Then EV products are going to see between 40 to 60% less maintenance costs, and that’s a major hit to a dealership. So they’re not going to be motivated to push electrified products as well. So this is something that the big players are very hesitant of.

And besides showcasing these PR units at trade shows to showcase their brand and sustainability from a true model standpoint, they’re trying to push this back as long as they can. And this is exactly something that we’ve seen in the passenger car industry as well. So back even in the late eighties to nineties, all the big players like Toyota, Mercedes, BMW, they all had electric cars.  They were lead-acid powered, and they would parade them around the trade shows as well to showcase their commitment to the next technology as an innovator.

However, they had no incentive to truly push them out. They needed a player like Tesla to come in and establish that market for them, capture 3% of market share over to electric, and then at that moment, that’s what gave them reason to come out in earnest to electrification. They needed to be forced to. And we’re going to see the same thing in our space as well.

So I anticipate before players like Caterpillar or Deere or Case come into the electrification market, they’re waiting for another player like HEVI to establish that, capture 3% of market share before they’re going to coming in earnest. And again, it’s a $280 billion a year market, so if HEVI was to capture 3% of that, then we did pretty well for our shareholders.

Graham Mattison

Yeah, exactly. It’s it’s not like but now iPhone or Android where it’s like one or the other. I mean there’s there’s a huge market. And also to that extent, you know, over the years there have been a lot of new brands coming in to the market. So it’s not just… you know, if you look at a construction site closely, you’ll see a lot of different brands out there.

So there’s that. But it’s interesting you talk about with the dealership model because that is really the challenge that we’ve seen, you know, with Ford and General Motors and some of the other ones is that they’ve got this existing network of dealers that they’ve built up over years. They’ve also got an existing footprint of plants and equipment that they need to get return on to make these internal combustion engines.

You know, how do you push that through? That’s the challenge. And so, yeah, I would expect it to. And maybe it’s not the right way. It’s probably going to be very similar to what the automotive OEMs are going through, the same challenges that the, the Cats and John Deeres of the world will see.

Raymond Wang

That’s right. And even in the automotive sector, they’re still trying to figure out is it going to be these subsidized programs to their dealers to push electric? Are they going to try to bypass their dealer network entirely and just sell online? The industry is definitely trying to figure that out.

Now, actually, one point to come back to you that you mentioned is there are newer players and one of the reasons why HEVI was focusing on large scale heavy industrial equipment – and we defined that as off-highway machinery over 10,000 lbs. –  is because electrification is, is taking hold right now in industries across the board and everyone’s looking for new applications for it.

But for the natural organic growth of product development for electrification, you are going to see new players coming focusing on smaller-sized products like mini excavators or skid steers, typically products that only weigh about 1 to 3 tons in size. Because they’re smaller, they’re easier to develop.

Because we have the manufacturing capability and supply side, we want to get ahead of the curve completely leapfrog over that segment and focus on the 10,000 pound-plus, because that’s why I don’t think that there’s any player right now besides the market leaders that’s able to electrify these products.

It’s easy to prototype a 1 to 3 ton skid steer in a garage, hard to do so with a 40,000 pound, 14 foot tall front loader like ours.

Graham Mattison

Makes sense. Another question, what are you hearing from your customers about? You know, they’ve been relying on this dealer network forever. You’re coming in and doing a direct to consumer model. How do the customers approach that? Does that scare them?

00;50;32;27 – 00;51;01;17

Raymond Wang

Right now it’s a breath of fresh air. It’s a breath of fresh air for them. That’s the feedback that we’ve gotten because particularly in the heavy equipment industry, it’s actually a rather large industry controlled by very few amounts of players. And these players over the past hundred plus years has, have definitely leveraged their market leader position to be able to.

I don’t want to say… how do I phrase this? But they’ve been able to capitalize on their position from their audience, and their clients have been getting less and less power, more and more restrictive terms. But we’re coming in, we are not selling our products through a traditional dealership network at all. We’re doing a direct to sales business model.

So, what that opportunity – what that provides the client is because I don’t have a dealership network to cater to, we can promote the right to repair for our clients. So, if a client, let’s say, pops a tire but has the capability to replace that themselves, they don’t have to work with us. They don’t have to buy a HEVI-branded tire that costs $1600 for one of our front loaders.

They could use ours, but they can also use a third party tire if they have a supplier, and the equipment to do so, we’ll provide them with the knowledge and know-how and all the specs and have at it. We want to empower our clients and that has been the feedback has been overwhelming, overwhelmingly positive, which is great.

And this is part of our strategy to achieve adoption of our technology. Because one thing we have to remember is for this type of product line loaders, excavators, things of that nature, it has been diesel power for the entire life span of all of the operators today. In fact, it’s been diesel power before the fathers of those operators and potentially even the fathers before them.

The only thing that came before diesel power was steam back in the 1900s. So, getting adoption, getting this audience to be able to try new technology was definitely a responsibility and a challenge for HEVI to overcome. And one of the ways we do that is by empowering our clientele, and that’s been a huge, huge drive behind the success that we’ve been getting behind our brand and our product line.


Graham Mattison

And that’s interesting. I mean, so I went and saw Raymond at the New York building trade show in New York at the Javits Center, and just spending little time around your booth, you’ve had one of the front loaders right there and every watching everybody come up to it and just kind of being amazed by it and seeing what it could do and how it worked.

It was, it was… it was by far the most well-attended booth on the floor, I’d say.

Raymond Wang

I apologize that our conversation kept getting cut short by everyone asking questions!

Graham Mattison

And that’s all right. I’m not buying a front load, so… [laughs]

Raymond Wang

But it was great. I mean, you saw it firsthand with our system. It’s actually our machinery is designed to be easy to repair and worked on. So it’s not, you know, a statement that we make, but make it complex and hide behind it. It’s a true statement. Our products are very easy to maintain. Our components are very easy to access.

In fact, our diagnostic software, one thing for EVs that you typically hear is you’re going to need a laptop and software and proprietary technology to be able to identify what’s wrong with your product to fix it. We don’t have that. We have a simple LCD screen that shows that upfront to the client. If there’s something wrong, it’ll flash error code, blah blah, blah, which means, you know, you might – your transmission fluid is low and you want to take a look at your motor.

So we make it very easy. And at the trade shows, a lot of folks with these products, with the knowledge they look in and they say, I can work on this, this is easy. I got this.

Graham Mattison

Yeah, that’s what one guy said. He’s like, “It’s the same cab as, as my, my existing equipment.”

Raymond Wang

So yeah, yeah, that was very important to us. I wanted to make sure that with our product we didn’t go too far in terms of trying to change behavior. I think just trying to switch people from diesel to electric is already a big responsibility and challenge in and of itself. But I didn’t want to go too far and completely redesign the concept of, let’s say, a front loader and excavator.

We want to make sure that the front loader looks, feels, works just like a front loader, so anyone that has experience driving it can get behind the wheel and feel comfortable within 10 seconds. And we’ve been achieving that, so we’ve been very proud of that.

Graham Mattison

Right. Another question you talked about on your earnings call about the demonstration project with United Rentals, the largest rental equipment company out there. Can you talk about how that program works and then the milestones and then how you’re approaching marketing around that going forward?

Raymond Wang

Absolutely. The best thing about that demo program that we have with United is this is not a demo on a closed lot, you know, in a controlled environment with their personnel. This is demo testing with their live, real clients.

We gave them a product to say, “All right, put it through its paces. Let’s see if it’s right for your business.”

And they really liked that. They really liked that. So right now they have our machinery in their fleet. They are sending it out to real clients to get true real feedback. And so far everything has been extremely positive. But that was the key thing. We want to make sure that we get true, real feedback and testimonials behind our product line because we stand by it, but I can talk about it until I’m blue in the face.

It’s one thing to hear from me, it’s another thing to hear it from their clients and their teams. So that was very important, and this is something that we are going to continue as well. My, my goal, my milestone is to, is to capture more of these opportunities with flagsship enterprises, brand names out there, to truly push and drive the adoption of our heavy machinery.

Because right now we’re actually at the first adopter phase. Everyone that sees our equipment learns about it, they love it, they can get behind it. However, it’s very difficult for them to be able to integrate that into their existing business model because that business may only utilize 1 to 3 pieces of equipment to sustain their business. And should anything go wrong with ours that can have drastic impact on their overall financials, on their overall performance.

So, they don’t want to be the first ones. And we understand that that’s why we are pursuing these enterprise companies with brand names across to rental space, construction, space, agriculture, and government to be that first adopter and provide that confidence and feedback and clarity to then be able to drive our product. And I think it’s going to open up a floodgate once, once we do.

And I look at it like, like a breakroom pie, that that’s the analogy I use all the time. So essentially in the breakroom you have a whole pie, it looks good, smells good, everyone loves it, but no one would touch it. But once one slice is gone, that pie disappears in 5 minutes. And that’s exactly the stage that we’re in with the heavy business, which just on the cusp, because we are onboarding these demos and pilots with many brand name organizations.

And then the next step would then be some type of fleet sale or agreement. And I think it’s going to take off from there.

Graham Mattison

Well, that makes sense with the rental companies because that’s their sort of model. Like, you know, they you know, if you ran a pick a forklift from them and it breaks down, they can swap it out. So there’s no risk to the customer. You know, the same way as you run a Hertz car and it breaks, they’ll give you a new one.

It’s a sort of cost free, easy way for them to try it. But at the same time, they’re getting the points for doing something better for the environment and it looks good on their job site. And so it could be a win for everyone.

Raymond Wang

Yeah. Yeah, absolutely. When we approached our product line for that adoption, everything’s focused on, on adoption. So, number one, when we developed our product line for HEVI, it had to make sense on paper to the consumer, to the client, because the technology can be great. But if it doesn’t make sense on paper, if this new technology has a times three times, four multiplier, then it’s never going to take off.

So number one, at HEVI, we pegged the purchase price of our equipment to their comparable diesel across the board. So we have three product lines the GEL 1800, which is a 12,000 pound front loader, the GEX 8000, which is a 20,000 pound excavator, and the GEL 5000, which is a 40,000 pound all-electric front loader. Now our GEL 1800 right now that retails for 135,000 with the battery, with the base attachment, with the base charger, and that’s actually comparable to a diesel of its equivalent size in our market.

And right now, we’re just focused on the mid-Atlantic region. So, for a customer looking to adopt this new technology, it’s not going to break their bank. It’s the same – there’s no surprise to the purchase price. Then you factor in the fuel costs as well because that sized equipment will utilize 4 to 6 gallons of diesel per hour of operation, whereas our equipment will only use about 2 to $4 of electricity.

So that’s going to save that business roughly around $20,000 in fuel costs alone in the very first year. And that’ll continue to grow as diesel would become less and less efficient. And then you factor in the 40 to 60% maintenance costs as well. Our products have a superior cost of ownership and return on investment for a business. Then at that stage, factoring those benefits, then a business can truly digest and appreciate the environmental impacts because our equipment has no operating emissions, so not only is it saving the emissions from the overall globe and the local community and our job site for a safer, cleaner job site, but also it increases benefits for certain applications such as indoor work. Let’s say it’s a livestock farm and your operating equipment in a heavy barn. You don’t have to worry about these emissions smoking the entire unit out and installing these large OSHA regulated ventilators for the site.

And there’s also significantly less noise. Our equipment produced 60% less noise. When we do our demos, we do it right next to the vehicle, walk around, talk about the benefits, and then I jump inside to move it. And it surprises everyone that it was on and they couldn’t even tell.

And this makes our products perfect for sensitive environments. Let’s say it in an urban setting or next to a hospital or a school. Product develop- property developers right now have an offering to be able to win more bids because they have a quieter job site that they can actually stand behind. And these are the strategy of HEVI to be able to get people on board with our new technology.

Graham Mattison

Now that sounds like a exciting time in front of you. And that’s, I think also one of the points you mentioned that you know it given the price point of these things, you really don’t need to get a huge piece of the market. A very, very small win could generate revenues right up to and maybe in excess of your transmission business.

Raymond Wang

Mm hmm. That’s right. That’s right. Right now, our focus is on the mid-Atlantic region of the United States. Our headquarters in New Jersey. And I always look at it like Broadway – if we make it here, we can make it anywhere. So our focus on the mid-Atlantic, the market size for the mid-Atlantic region is right around 80 – I’m sorry, it’s right around $18 billion a year.

So if we capture 3% of that, then we did pretty well for HEVI and then we will continue to expand our business then to the South Atlantic, and then we’ll review to see if we want to just push west central or just leapfrog over to the West Coast directly. But that’s our business model. It comes back to our culture.

We don’t try to overextend ourselves. We focus on one objective first, complete that mission, and then we expand from there and there.

Graham Mattison

Well, coming up on the half way through the hour and be mindful of your time. One last question. What do you think investors are missing about the company and are there things that they should be looking for at milestones as we move through 2023?

Raymond Wang

The biggest question I get from investors is just confusion about the business. Are you an EV company? Are you a component manufacturer? What are you? And it definitely also confuses a lot of the online algorithms and analytics. How do you estimate and value GTEC as a whole? But I look at it like this. It keeps it very simple:

Right now, Greenland, we have a very established core business that’s extremely profitable and affords us a very strong balance sheet. We posted over $90 million in revenue last year. We have nearly $20 million in cash on hand. And through our work on the HEVI business, we have significant growth potential, being able to capture in, capture a portion of this $280 billion a year market with first mover advantage and we have the capabilities to do so.

So, we provide significant value to our investors with our core business and offer significant growth potential with our electrification HEVI business as well. So, this is a unique offering that we provide investors out there on the street today, especially on our exchange, and that’s something that I think is often overlooked.

Graham Mattison

All right, great. Well, thank you so much. I really appreciate it. Again, everyone, this recording, this will be up on the website and we’ll be following up with the note. And thank you so much and look forward to doing this again soon.

Raymond Wang

Thank you very much for having me. It’s been fun.

Graham Mattison

Great. Thanks, everyone.