China-based automaker Zhejiang Geely once set a goal of having 90% of its 2020 production comprised of electric (the Chinese call them new-energy) vehicles. That didn’t happen, but Geely did manage to become China’s biggest automaker by winning customers for its lower- and mid-priced cars.
Last month, the company cast its eye on the high-end electric vehicle (EV) market that is dominated in China by Tesla Inc. (NASDAQ: TSLA) and Nio Ltd. (NYSE: NIO). Geely President Andy Conghui An told Bloomberg on Thursday that the company has established a new unit called Zeekr that he believes will position Geely more strongly against a likely invasion of big tech companies like Apple and Alphabet and Chinese firms like smartphone maker Xiaomi and network equipment maker Huawei.
If EVs and, eventually, fully autonomous vehicles are destined to become only rolling hardware that is frequently recharged with electricity and upgraded software, then Geely/Zeekr wants a piece of the action. Geely’s An told Bloomberg, “We see Zeekr cars as mobility terminals. What we aim to do is to provide users with products and experience that go beyond their expectations.”
Geely is expected to begin deliveries of its first Zeekr-branded vehicle, the Zeekr 001, in September and is targeting 8,000 sales in the fourth quarter of this year. By the end of 2022, and with two more models, the company expects to sell more than 50,000 Zeekrs. Nio sold 43,700 EVs to Chinese buyers last year. Tesla’s Model 3 alone sold more than 137,000 units in 2020.
China’s best-selling EV last December was a tiny thing known as the Hongguang Mini that sold some 35,000 units during the month at a price of around $4,400. The Hongguang Mini was the second-best-selling EV in China last year. Geely did not have an EV in the top 10. The Zeekr facility in Ningbo has an annual production capacity of 300,000 EVs.
Zeekr President An has big plans for the company. He told Bloomberg he expects exports to Europe to begin late next year or in early 2023 with sales in the United States to follow. Even further in the future An said is an overseas public offering of Zeekr stock: “An IPO is on the list of our future potential options. Zeekr is a global brand and it would make sense that we should be able to open to all positions of listing venues.”
Reuters reported Thursday morning that the Zeekr models will sell for around CNY300,000 (about US$46,000). Zeekr plans to open more than 100 dealer stores in China this year.
Geeley also owns the Volvo brand and is the largest stakeholder (9.7%) in Daimler, the maker of Mercedes-Benz.