China’s Zeekr Is Now A Public Company. Its Path To U.S. Sales Is Less Clear

Geely Auto, the Hangzhou-based proprietor of Polestar and Volvo, has too many brands. However recently, considered one of them particularly type of stands out: Zeekr. This morning, Zeekr formally entered the U.S. inventory trade at a value of $21 per share and an estimated valuation of greater than $5 billion. Inside a couple of minutes of formally being open for buying and selling, and with Zeekr EVs parked exterior for all of Decrease Manhattan to see, the inventory touched almost $27, pushing the corporate’s valuation to $7 billion.

It was fairly a present of drive, particularly proper after the present of drive on the Beijing Auto Present—and the tariff crackdown on Chinese-made EVs that might grow to be information the exact same day. What a day for Geely, the Zeekr model, China and the battle for electrification generally.

Granted, this isn’t the primary EV startup—and even the primary Geely-affiliated model—to go public. So now we have to surprise: will this one fizzle out and underperform like the opposite IPOs of late? And what does this imply within the context of a thirsty but unsure EV market?

It’s not clear. Nothing is ever clear till the ultimate shoe drops, and the markets shut.

Since its IPO in 2022, Polestar has completed nearly nothing however sink, now buying and selling at an abysmal 15 cents per share, as of this writing. I requested Zeekr how this time shall be completely different, however the automaker’s reps declined to remark.

Nonetheless, we will study so much if we simply pay a bit of little bit of consideration. Let’s examine Zeekr to different less-than-stellar newly public firms. It’d simply be a bit of bit safer than the opposite particular function acquisition firm (SPAC) debuts that gave us the publicly traded Lotus and Polestar manufacturers. It’s additionally in considerably better straits than VinFast, one other IPO that fizzled out shortly after introduction. (Additionally, it is value noting that just about each firm that went public with a SPAC, automotive or in any other case, has sunk like a rock.)

However one factor is definite: Zeekr is now the EV model to observe, in China and past. It is already increasing into Mexico and Europe, and it could even have its eyes on the U.S. subsequent. TechCrunch is already calling Zeekr “the buzziest EV IPO of the 12 months.”

Market position-wise, Zeekr occupies a luxurious or premium section that I’d say is equal to Acura or Audi. Zeekr is (theoretically) downmarket from Polestar, which aims to court Porsche buyers with its Scandinavian-style minimalist motif. Polestar is type of a sporty Volvo, whereas Zeekr tends to focus extra on exterior and inside adornment. That’s fascinating since each Polestar and Zeekr’s design work was carried out largely at Geely’s Gothenburg, Sweden studio. 

However whereas Polestar is really struggling for sales, Zeekr has constantly grown. A part of that success is providing a a lot fuller lineup of electrical sedans, SUVs, wagons and even vans, whereas Polestar is simply now getting round to including two extra crossovers after relying solely on the Polestar 2 sedan for thus lengthy. 

For March 2024, Zeekr is up 117% year-over-year. It additionally has delivered greater than 230,000 automobiles whereas increasing into extra worldwide markets. Final 12 months Zeekr delivered 118,685 automobiles, whereas Polestar solely moved 54,600. Which means that Zeekr outsold Polestar at greater than a 2 to 1 ratio, a quantity it mustered upright because the Chinese language EV market is in a race to the underside, price-wise.

After all, like most EV startups, Zeekr hasn’t but turned a revenue. However Zeekr representatives mentioned the model is on observe to be worthwhile by the top of 2024.

Zeekr is type of an fascinating duck right here, particularly for Individuals. I’ve talked with Zeekr of us on a number of events right here; the model is extra vital than a easy high-dollar electrical Audi competitor. It’s responsible for a lot of the engineering and software work that is now used across the Geely Auto brands, together with, sure, Polestar and Volvo. The Polestar 4 makes use of the identical mechanical bits because the Zeekr 001. However simply because Zeekr does loads of behind-the-scenes work, doesn’t mechanically imply it’ll come to the U.S.

Or does it?

Zeekr’s expertise varieties the idea for a self-driving Waymo automotive referred to as the M Vision, and that is already a identified amount. However, once I’ve requested immediately if Zeekr has plans for the U.S. exterior of a business automobile or its tie-up with Waymo, the model has been pretty wishy-washy.

In October, Zeekr reps advised me at a New York occasion that promoting a passenger automobile within the US was probably on the desk, however then adopted up through e-mail saying it had no plans to promote passenger automobiles within the U.S.

I requested once more every week earlier than the IPO. “[The U.S.] is a market that [Zeekr is] taking a look at however not but committing to for passenger automobile gross sales,” a Geely rep advised me. “Zeekr and Waymo are working collectively on the subsequent technology of driverless automobiles; Zeekr shall be offering the automobile {hardware}, Waymo the driverless tech and expertise.”

Nevertheless, the U.S.’s angle towards imported Chinese language EVs has quickly deteriorated inside only a week of getting that assertion. Zeekr’s automobiles from China might face a brand new 100% tariff on its automobiles, which isn’t nice for the model’s outlook as a possible U.S. passenger automotive providing—or the value of its inventory. 

As my colleague Tim Levin mentioned right this moment, we’re getting into a type of automotive cold war right here. Will Zeekr’s automobiles find yourself on sale within the U.S.? Proper now, that feels extra murky than ever.  

Contact the writer: kevin.williams@insideevs.com