How a Tesla Challenger Veered Off Course

[00:00:03] Welcome to Tech News Briefing. It's Tuesday, July 7th. I'm Imani Moiz for The Wall Street Journal. Who needs a summer internship when you can start your own company? We're looking at how a new generation of student founders is making the most of summer break in the AI era. And at the beginning of the year, a startup called Windrose Technology seemed poised to disrupt the global trucking industry.

[00:00:26] We're diving into how the company went from raising hundreds of millions of dollars to facing unpaid debts, a federal lawsuit and a missing $285,000 truck. But first, as AI reshapes the job market, some college students are rethinking how they spend their summers. Instead of jockeying for internships at big name consulting firms or investment banks,

[00:00:56] they're moving into startup incubators in Silicon Valley to build businesses of their own. The programs have been so successful for some students that they never return to campus. WSJ's Tina Lee spent time with students in these programs and joins me now to tell us what these hacker houses are like from the inside. How do these new programs work? Is there structure or is it just students taking the summer off to work on their computers by themselves? The great thing about these programs is that they offer a little bit of structure, it seems.

[00:01:24] But what these programs provide is a place to stay about 15 to 50 people living around you who are working on similar things. And then they will have a few events throughout the week where they can be executives or investors or go to startup events together. But on the day to day, it seems that there isn't that much structure and they spend most of their time working or spending time with their own co-founders. So you went to one of these hacker houses called TechTrek. Can you tell us a little bit more about it? How does it work?

[00:01:51] Yeah, so earlier in the school year, TechTrek set out applications and they received hundreds of them from students at Princeton, Harvard, MIT. And they selected a cohort of about 40 to 50 students. And some of these students had come in with their own ideas. Some other ones just knew that they wanted to be involved in the ecosystem this summer. So TechTrek provided them with mentorship and guidance. And among the cohort themselves, they could sort of move around and find new co-founders.

[00:02:18] And so they all landed in San Francisco a few weeks ago at the beginning of summer. They set up shop in Presidio. It's a really beautiful campus. They have space to co-work. They live together. They spend most of their days working to develop their products and taking calls from people who are interested in it. And then they might spend their evenings hanging out with each other or playing poker or going to dingers with executives or investors. But some of these students are making serious money, right?

[00:02:45] Can you talk us through one of the startups that gained traction and how that can change the life of some of these students? Another one of these hacker houses, the Yale Hacker House. One student who's a rising junior at Yale turned down job offers from a frontier biotech company. And she walked away from her plans to pursue a PhD after she found the Cortex, which is a startup that builds knowledge systems or brains for biolabs. And since then, Cortex has raised $600,000 at $10 million valuation. Wow.

[00:03:14] And they're working on getting their first commercial contracts. And since raising money, the way Ryan has been thinking about it is she thinks it's actually irresponsible to then go back to school and not keep up the momentum of your company. She says that by fundraising, she's made a promise to investors to make them that money back. It sounds like this is changing the way students are thinking about their summers and future employment. But is it also changing the way they're thinking about their education?

[00:03:38] A lot of the student founders that I talked to found that they were starting to reconsider the opportunity cost of staying in school versus working on their startups full time. A lot of them spoke about how it felt once they returned back to school, they didn't have as much time for it. And they just felt like they weren't able to move as fast as they would like. Many say that since coming to Silicon Valley, they are learning more in a single month, just meeting investors and working on their products and talking to companies than they have in an entire semester at school.

[00:04:05] An investor I spoke to who's a partner at Floodgate actually pushes back against students casually dropping out of school. At the dinner that she attended at the Yale Hacker House's backyard, she told the students, most of the time it's not a good idea to drop out unless you have the next unicorn idea. And it's very hard to know if you have the idea. And she mentioned that she spoke to many people who are very happy that they dropped out or have started a startup, but would give anything to go back to school again. That was WSJ's Tina Lee.

[00:04:34] A reminder that we want to hear from you. Have you ever seen a post on your social media feed that you thought was real only to later realize that it was AI generated? What did you see? Why did you believe it? How'd you feel afterwards? Shoot us an email to tnb at wsj.com or leave us a voicemail at 212-416-2236. That's 212-416-2236. And if you're a listener on Spotify, leave us a comment.

[00:05:03] We hope to hear from you. Coming up, a promising electric truck company was in the fast lane to challenge Tesla. So what sent it off course? That's after the break.

[00:05:29] When Windrose Technology unveiled a battery-powered truck that promised longer range at a lower price point than competitors, it attracted plenty of attention and hundreds of millions of dollars from investors. But under the hood, the Chinese-owned, Belgium-based startup faces mounting problems, including unpaid debts, a lawsuit in federal court, scrutiny from U.S. safety regulators, and a missing truck worth nearly $300,000.

[00:05:58] WSJ supply chain reporter Paul Berger joins us now to tell us what he learned about the future of Windrose. He spoke with both the company's CEO and several former employees to piece together what happened. So 2026 was supposed to be a great year for Windrose. What did the company have going for it? Well, the company had a lot going for it. It had a pretty incredible battery electric truck that was about $100,000 cheaper than a lot of its competitors, but could go a lot further and charge a lot faster.

[00:06:27] It also had, according to its CEO, $400 million in funding. At the start of this year, they only had about 36 trucks operating worldwide. But the idea was to start selling those trucks everywhere from Australia to the United States to various parts of Europe and South America. Can you tell us a little bit about the CEO of Windrose? Yeah, the CEO of Windrose is a 36-year-old Chinese national called Wen Han.

[00:06:55] He actually was born and raised in China, but came to the United States when he was 16 years old. He went to college here. He got an MBA from Stanford. He ended up becoming a senior executive at a Chinese autonomous trucking company. And while he was working there, he had this idea to develop a battery electric truck. He wanted to basically compete with Tesla that was also at that time developing a battery electric truck.

[00:07:23] The thing that's pretty remarkable about this company is that in the space of just four years, they designed, built and brought to market a battery electric truck when some of their competitors like Tesla have taken the better part of eight years to do the same thing. But now a truck is missing and federal agencies in the U.S. are starting to ask questions. How do we get here? That is a long and complicated story.

[00:07:49] But in short, at one point, Windrose in the United States had about a dozen employees. Over the last year, there have been a lot of issues regarding wages. And according to a lot of the former employees, they say that they were owed wages. In one case, they say that when they complained about non-payment of wages, they were fired. The company then reached out to some of the employees who had been fired

[00:08:17] and asked them where at least one of the trucks that appears to be missing was located. And the employees said, well, you still owe us in total almost $100,000 in unpaid wages and benefits. We're not going to go out and help you track down the truck unless and until you pay us the money that we're owed. And how has Han responded to these claims?

[00:08:40] He disputes most of the claims of unpaid wages and severance and benefits for various reasons, depending upon the circumstances of each person's complaint. He has also admitted that to some degree, the company has made mistakes. So, for example, during the reporting of the story, we managed to determine the vehicle identification numbers

[00:09:09] of all of the Windrose trucks that have been or currently are in the United States and found that some of them were actually misidentified. According to those numbers which you're required to give to the federal government, some of the trucks were allegedly made in the United States, whereas, in fact, as Wen Han told us, the trucks were made in China. He says that one of his employees made a mistake.

[00:09:36] And then, just more generally, he basically says that he has faced anti-Chinese animus in the United States and put some of the criticisms of his former workers down to the fact that he believes that they are intentionally or unintentionally harboring some kind of anti-Chinese animus. So, if Wen Han had raised $400 million for the company, how come Windrose is allegedly having so much trouble paying people?

[00:10:03] During the course of the reporting and in my interactions with Wen Han, it became evident that although the headline figure was $400 million, he'd actually only raised $100 million in equity. There was $200 million in lines of credit. And he said that the other $100 million was money he was currently raising, but hadn't actually finished raising. Earlier, you mentioned that one of the biggest names in electric vehicles, Tesla, is working on its own electric semi-truck.

[00:10:31] How much competition could Windrose give them in this sector? The big difference between Windrose and Tesla is that although Tesla has taken almost a decade to reach this point, they have finally reached the kind of mass production stage for their semi-truck. And those trucks are going to start rolling off the production line in the hundreds and then into the thousands, possibly tens of thousands over the next 18 months to two years.

[00:10:58] There are a lot of truck drivers who are very excited about the new Tesla Semi. There is some excitement about the Windrose truck, if only because it's a very well-priced vehicle. Technologically speaking, it is potentially a good competitor to the Tesla Semi. But when you compare the kind of well-oiled operations at Tesla with the current state of operations at Windrose,

[00:11:25] they appear to be very far apart. That was WSJ reporter Paul Berger. And that's it for Tech News Briefing. If you're a listener on Spotify, be sure to leave us a comment. Today's show was produced by Danny Lewis with supervising producer Katie Ferguson. I'm Imani Moise for The Wall Street Journal. We'll be back later this morning with TNB Tech Minute. Thanks for listening.

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