China’s biggest auto manufacturer Geely is launching a premium electric car hoping to compete with Tesla.
Geely, which owns famous brands Volvo and Lotus, is planning to launch a premium electric car brand to tap into China’s high demand for Electric Vehicles.
With a registered capital of 2 billion yuan ($307 million), Zeekr is a joint venture between Geely Auto and its parent company Geely Holding Group.
The company expects to launch its first high-end car in the 3rd quarter of 2021.
Zeekr will leverage Geely Holding’s research and development results, including the leading Sustainable Experience Architecture that enables software upgrades over the air.
According to the company, the brand is expected to use Geeky’s own battery technologies, battery management systems, electric motor technologies and electric vehicle supply chains.
The company has quite some experience in EV with Polestar, owned by Volvo Cars, develops electric performance cars. It is headquartered in Sweden with vehicle production taking place in China. Similarly, Lotus is working on an electric supercar called Evija.
Zeekr, its own home-grown EV brand, will face fierce competition from Tesla whose Model 3 was the top-selling electric vehicle model in China last year. It will also compete with Chinese groups Nio, Xpeng, and Li Auto which are seeing healthy sales.
The company is aiming to become China’s first global auto manufacturer, inspired to have a global reach as Volkswagen has already. Other than owning Volvo and Lotus, Geeky also owns a majority stake in Mercedes-Benz’s owner Daimler.
According to current reports, initially, the company will only cater to the Chinese market, however over time, as the demand increases for premium electric vehicles, brand hopes to go global.
Chinese EV market
According to the report by Canalys, globally, in 2020 3.1 million EVs were sold, an increase of 39% from 2019. Of these, 1.3 million, equating to 41% of global sales, were sold in China.
The company forecasts a 51 percent increase in sales in the country alone, to reach 1.9 million. China is still far ahead of the US for EV share, as in the US, EV sales represented just 2.4% of global sales in 2020.
China accounted for about a fifth of Tesla’s global revenue of $31.5bn (£23bn) in 2020, according to public filings.
Tesla has recently come under the spotlight as the Chinese military didn’t want US-based Tesla cars to enter the vicinities in fear of data breaches to China’s global rival US. Even though Elon Musk, CEO of Tesla himself denied the claims, the concern still remains a valid one.
This constitutes only a small percentage of China’s EV market, leaving space for companies like Zeekr to cash in on the premium EV section of the market.