China’s highest-profile automaker, Geely Automobile, is investing US$300 million to launch a range of premium electric vehicles under the umbrella of a new company, called Zeekr Company Limited (to be known in China as Ji Ke)
The first Zeekr vehicles are expected to be delivered in the third quarter of 2021, with production being undertaken by parent company Zhejiang Geely Holding Group. Zhejiang Geely is investing a further US$300 million into Zeekr as part of the joint venture structure.
Zeekr will be jointly owned by Geely Automobile Holdings and Zhejiang Geely Holding Group under a 51% and 49% share structure.
“Zeekr will create a new ecosystem that is focused on the full integration of the end user into a new super ecosystem focusing on the full service of end user requirements with an innovation as standard approach in terms of sales and servicing,” said the company in a statement.
Zeekr will at first target the Chinese EV market but the company says it will also explore export opportunities to satisfy global market demand for premium electric vehicles. Zeekr aims to deliver a new electric vehicle model to market each year in the coming five years.
China is the world’s biggest auto market, while a recent report by Canalys, forecasts EVs will represent one third of all car sales in the country in 2025.
Battery factory
Geely Automobile’s parent Zhejiang Geely Holding Group has also revealed plans to build an electric vehicle battery factory in Ganzhou to compliment its EV line-up expansion. The facility has a planned annual manufacturing capacity of 42 gigawatt hours.
The total investment in the project by Geely’s technology arm is expected to be close to US$5 billion. Geely’s has previously invested in a partnership Ganzhou-based EV battery maker Farasis.
Results disappoint
The Zeekr plans and its parent company’s battery factory plans weren’t enough to stop Geely Automobile shares falling following the release of the company’s 2020 annual results.
The company reported revenue of 92.11 billion yuan, down 5% on 2019. It sold 1.32 million cars in 2020, down from 1.36 million units in 2019. In 2021, Geely expects to sell 1.53 million vehicles.
Net profit attributable to shareholders came it at 5.53 billion yuan, down 32% from 2019.
Geely Automobile Holdings (HKG:0175) is listed on the Hong Kong Stock Exchange and is a constituent of the Hang Seng Index. It is a subsidiary of Zhejiang Geely Holding Group, which is privately held by Chinese billionaire Li Shufu.
Zhejiang Geely Holding Group’s global stable of brands includes Volvo, Proton, Lotus, Lynk & Co and Geely Auto.