Zeekr raises $500 million from investors

Geely’s premium electric car brand Zeekr has raised a total of 500 million US dollars from external investors – the equivalent of about 424 million euros. The five strategic investors include the Chinese battery cell manufacturer CATL.

Zeekr signed investment partnerships with Intel Capital, CATL, Bilibili, the Cathay Fortune Group and Boyu Capital to “expand even faster” in the future. In a first step, the five investors have now realised a pre-A financing in the amount mentioned at the beginning. In return, they are expected to receive a stake equivalent to around 5.6 % of Zeekr’s enlarged share capital, according to parent company Geely. The leading investor in the five partners is Intel.

As part of the agreements, the new investors will also contribute their respective expertise in smart connectivity and batteries, new consumer generations and raw materials. Intel Capital is a global investor in new technologies, while CATL is known to be a developer and manufacturer of e-car batteries. Bilibili is an online entertainment player popular in China, Cathay Fortune Group develops and operates new energy assets and is a producer of cobalt and copper. And Boyu Capital is a China-focused alternative asset management firm.

Zeekr was founded in March this year and is currently jointly owned by Geely Automobile and Zhejiang Geely Holding. Zeekr plans to launch one new model in each of the next five years. The electric cars will be built on the SEA (Sustainable Experience Architecture) electric platform unveiled in September 2020. Initially, Geely is targeting the Chinese market with Zeekr, but later the electric cars could also be exported – as the company wants to “serve the growing global demand for premium electric vehicles”.

Production is to take place at Zhejiang Geely Holding – as part of a “light asset strategy”. In other words: there will be no own and exclusive plants for the Zeekr brand. Production at a contract manufacturer is therefore possible, for example the recently announced joint venture between Geely and Foxconn. Zeekr is also to create a new ecosystem “focused on fully integrating the end user into a new super ecosystem”. This is to include service and distribution.

The new premium brand had unveiled its first model in April, the 001, which is to be delivered in China from October 2021 and in other countries from 2022. As the Chinese company now announced, the 2021 model is already sold out. Parallel to the market launch, the first Zeekr brand experience centres are to open in Hangzhou and Shanghai in September 2021. In addition, manufacturer-owned 360 kW charging stations are to be made publicly available in Zhejiang province from the fourth quarter and rolled out nationwide shortly afterwards.

The Geely Group is targeting annual sales of 3.65 million vehicles under the Geely Auto, Lynk & Co, Zeekr and Geometry brands by 2025, including more than one million electrified vehicles, according to the latest data. That is, around 30 per cent. Zeekr alone is expected to achieve annual sales of 650,000 all-electric units by 2025.

In addition, Geely Auto and Lynk & Co are likely to move more in the direction of hybrid drives. In the second half of the year, the introduction of the intelligent hybrid powertrain GHS2.0 is planned, says Geely. This is to be installed in flagship models of the Geely Auto brand and offered in ten new models of the Geely Group within three years. The battery size of the PHEV models is also to be increased in such a way that the plug-in hybrids of the Geely brands will have a “100 to 200 kilometre e-range in the future”, it says.

Basically, the brands operate in different world regions. Geely Auto is expanding its brand presence in Southeast Asia, the Middle East, South America and the Russian market. Lynk & Co is planning to expand its innovative subscription model in Europe and deliver its hybrid-powered models. The Chinese company also plans to expand into the Asia-Pacific region this year. Geometry aims to offer its mass-market models primarily to Israeli and Eastern European consumers.

reuters.com, zgh.com, global.geely.com (sales targets)