Geely targets Apple, Xiaomi with its new Zeekr electric car unit

Chinese automaker Zhejiang Geely Holding Group Co. will use its new Zeekr electric-car unit to take on tech giants like Apple Inc and Xiaomi Corp, which also have ambitions to enter the burgeoning EV market.

By: Bloomberg
| Updated on: 16 Apr 2021, 08:33 AM
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Visitors check a Zeekr 001, a model from Geely's new premium electric vehicle brand Zeekr, at its factory in China. (REUTERS)
Visitors check a Zeekr 001, a model from Geely's new premium electric vehicle brand Zeekr, at its factory in China.

Zeekr Co, which will be run independently, is seen as combining the characteristics of a tech company with Geely’s carmaking expertise, Geely President Andy Conghui An said in an interview with Bloomberg Television. He said that will give it an edge against a new wave of potential rivals from the tech industry, which could see cars become like a piece of hardware that is constantly improved with software upgrades.

“We see Zeekr cars as mobility terminals," An said. “What we aim to do is to provide users with products and experience that go beyond their expectations."

Geely, which has spent four years developing the first Zeekr 001 car, will start deliveries in September, and has a target of up to 8,000 sales in the fourth quarter. That is seen rising to more than 50,000 in 2022 after two more models are added, An said. Chinese EV upstart Nio Inc sold about 43,700 vehicles last year, and Xpeng Inc delivered about 27,000.

In China, Geely and traditional automakers like Volkswagen AG are jockeying with Tesla Inc, Nio and Xpeng for a slice of what is now the world’s largest EV market. The growth has also attracted tech firms like Xiaomi to Huawei Technologies Co, betting they can use their software know-how as cars grow increasingly autonomous and connected.

Geely shares surged as much as 8.1% in early Hong Kong trading Friday. The stock was trading up 5.7% at HK$21.50 at 9:58 a.m. local time.

The introduction of Zeekr is the second attempt by Geely’s billionaire founder Li Shufu to crack the EV market. His first effort, known as the Blue Geely Initiative that started in 2015, failed to meet its goal of new-energy vehicles accounting for 90% of sales by 2020. Geely sold 68,142 new-energy vehicles last year, accounting for about 5% of total deliveries.

As part of the push, Geely has forged collaboration pacts with companies from search-engine heavyweight Baidu Inc to Apple’s manufacturing partner Foxconn Technology Group and Tencent Holdings Ltd.

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Geely, which became China’s biggest private carmaker by targeting buyers in the lower-to-mid-market segment, now plans to rival Tesla and Nio at the top end of the EV market as it tailors Zeekr as a premium, performance-oriented brand.

The Zeekr 001 coupe has a range of up to 710 kilometers (440 miles) and start at 281,000 yuan ($43,000) after government subsidies. That compares to about 249,900 yuan for a Tesla Model 3. Zeekr plans to have 415 direct sales and service outlets within three years.

Geely will also use the Zeekr moniker to venture into a more user-centered, lifestyle approach to the car market, An said, mimicking the approach of Nio, which has special clubhouses for drivers and built customer loyalty through events and merchandise like clothing and food. Geely will create its own eco-system around Zeekr, offering branded products such as e-bikes and smart watches, An said.

It also aims to release a Zeekr Robot in 2024 that works as a self-driving vehicle, he said.

“I spent some time to think about Tesla and other new players in our industry, and even some companies outside of the industry," he said. “The intelligent electric-car industry has no boundary."

The aim is to build Zeekr into a global brand, with exports to Europe slated to start in late-2022 or early 2023, and the U.S. after that, An said.

Further out, an overseas initial public offering is a possibility, he said. Nio, Xpeng and Li Auto Inc. are all listed in New York and are now seeking secondary listings in Hong Kong.

“An IPO is on the list of our future potential options," An said. “Zeekr is a global brand and it would make sense that we should be able to open to all positions of listing venues."

Geely Chairman Li has made his mark on the global car industry over the past decade with a run of investments in traditional European automakers including Volvo, Lotus and Mercedes Benz-maker Daimler AG. An didn’t rule out a possible IPO of Volvo, but added Geely doesn’t have plans to boost its stake in Daimler after becoming the biggest shareholder of the German carmaker in 2018.

An said that Geely’s EV brands cater to different groups of buyers. Polestar is seen as more about performance and aimed at the highest end of the market, while the Geometry line-up is more of a mass-market vehicle, he said. Since late last year, the company has seen good performance from its brands and is confident it will see improved results in terms of volume and margin this year, An said.

The chip shortage affecting the global auto industry has cost Geely around 10% of its sales, An said.

First Published Date: 16 Apr 2021, 08:33 AM IST
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