Geely cruises into premium electric vehicle market

China's largest private automaker Geely announced on Tuesday the formation of a new electric mobility technology and solutions company called Zeekr that will serve the growing demand for premium electric vehicles.

With a registered capital of 2 billion yuan (US$307 million), the company is expected to deliver the first batch of Zeekr vehicles in the third quarter of this year, with production undertaken by Geely under a light asset strategy. Zeekr aims to release a new electric vehicle model every year in the next five years.

Geely's move is similar to other automakers that have set up high-end electric car brands or companies, aiming to establish a strong foothold in the country's fierce new-energy vehicle market.

Industry analysts said that as separate companies, there are a number of advantages, such as technology-driven, light asset and agile development.

"The new electric vehicle companies established by traditional automakers can experiment and have the chance to focus on innovation and investment in new technologies, such as artificial intelligence, virtual and augmented reality, 5G and connectivity," said Zhang Xiaofeng, an independent market analyst.

Shanghai-based SAIC Motor launched Zhiji Motor last November, a high-end smart electric vehicle company that focuses on technological innovations and applications, as well as creating a new operation model by integrating the company's research and development, manufacturing and marketing resources.

Dongfeng Motor has launched a high-end new-energy brand — Voyah — while BAIC has its own spin-off brand known as Arcfox.

Geely Auto released its 2020 financial results on Tuesday, with revenue of 92.1 billion yuan, net profit of 5.57 billion yuan and profit attributable to stockholders of 5.53 billion yuan.

Overseas sales of Geely vehicles reached nearly 73,000 units, a year-on-year increase of about 25 percent. The automaker said its overseas expansion has extended to nearly 30 markets.

For 2021, Geely's global sales target is 1.53 million units, which would be a year-on-year increase of 16 percent.