China’s Geely will roll out high-end cars under the brand – Zeekr to compete with established EV player Tesla Inc (NASDAQ:TSLA).
Open-source EV Chassis
The Volvo (OTCMKTS:VLVLY) owner – Geely, will produce the new range of electric vehicles in a JV called Lingling Technologies. Geely also owns a 9.7% stake in Daimler AG. The new models will be built using open-source EV Chassis.
Geely attempts to fulfill its Chairman and founder’s ambition – Li Shufu to manufacture high-end cars such as Mercedes Benz to take on Tesla. Just like Tesla, Geely will inaugurate hubs or showrooms at the center of Cities to market cars. It deviates from the traditional way of selling vehicles through the dealers. Tesla quickly gained a footprint and improved market share in China by following the same model.
An LMC Automotive analyst, Alan Kang, said EVs and traditional gasoline cars are two auto business segments. Since Geely does not have a clear benefit in EVs, it wants to develop innovative technologies under a new brand to compete with Tesla.
Nio Inc sells EVs at a premium
The EV maker Nio Inc sells EVs at higher prices in the Chinese market. The automakers in China compete with large players like Toyota and Volkswagen.
Geely will open clothing lines and accessories alongside unveiling car owner’s clubs to maintain deeper relationships with EVs buyers. Zeekr also considers ownership plans to make buyers investors in Lingling. SAIC Motor and Great Wall, the competitors of Geely, have introduced standalone EVs in China.
China encourages NEVs (New Energy Vehicles) like hybrids (petrol and electric version), battery-powered, and hydrogen fuel cars to control air pollution and check the warming climate. The demand for NEVs expects to surge to 20% of China’s auto sales by 2025 from the present 5%.
Ford terminates plans to create a JV
Ford Motor Company staged a decision to terminate plans to form a JV in China with Zotye Automobile. The company cited various government policies and the electric vehicle industry since it signed the agreements in 2018 and 2017. Ford will choose a flexible business model to run its auto business in China.