China’s largest automaker, Geely, is launching a premium electric car brand that hopes to take on Tesla.
The Chinese company, which owns Volvo and Lotus, announced its Zeekr brand on Tuesday to explore China’s demand for electric vehicles (EVs).
This happens at the moment when Elon Musk starts the charm offensive in China, praising his plans to combat carbon emissions.
The Tesla founder is trying to defuse Chinese concerns about cameras on board their cars.
Geely said he would develop and manufacture high-tech EVs under the Zeekr brand and that he hopes to start deliveries in the third quarter of 2021.
It already has exposure to premium electric cars through the brands it owns. Polestar, owned by Volvo Cars, develops high-performance electric cars. It is based in Sweden and vehicle production takes place in China.
Lotus, which is controlled mostly by Geely, is working on an electric supercar called Evija.
Geely also owns London’s black taxi manufacturer, the London EV Company, and has focused on building plug-in hybrid taxis, which have a gasoline engine and electric battery.
Zeekr, its own local EV brand, will face fierce competition from Tesla, whose Model 3 was the best-selling electric vehicle model in China last year. It will also compete with Chinese groups Nio, Xpeng and Li Auto, which are having healthy sales.
Last week, Dongfeng Motor, a Chinese partner of Japan’s Nissan and PSA Peugeot Citroen from France, said its new EV Voyah brand could start delivering cars to Chinese customers in July.
Beijing wants more than a fifth of vehicles sold in China to be electric by 2025.
Geely has ambitions to become China’s first global automaker with a range similar to that of Volkswagen. Together with its Volvo and Lotus brands, it has a minority stake in Daimler, owner of Mercedes-Benz.
Zeekr’s initial strategy will focus on the Chinese market, but it will also explore opportunities abroad, given the growing global demand for premium electric vehicles.
The premium brand will operate under a new entity called Lingling Technologies, which will be based in Hefei, eastern China.
“President Li Shufu feels the need to inject into his 24-year-old company, Geely, a startup vibe like what he sees at NIO, Xpeng and Li Auto,” said Michael Dunne, chief executive of ZoZo Go, a company consultancy focused on the Asian car market.
“To get there, he imagines an electric baby – Lingling Technologies – that operates independently from Geely.”
On Tuesday, Geely released its annual results, which saw the sale of 1.32 million cars in 2020, compared with 1.36 million the previous year.
Tesla charm offensive
In a short interview with Chinese state television broadcast on Tuesday, Tesla chief Elon Musk said he was impressed with the carbon emission targets set in the country’s last five-year economic plan.
Beijing has restricted the use of Teslas among military personnel and senior government officials due to concerns about how the automaker handles data in China.
Musk told Chinese politicians and businessmen over the weekend via a video link that Tesla would never provide the US government with data collected by its vehicles in China or other countries.
The military raised security concerns about the data collected by cameras installed in cars.
China accounted for about a fifth of Tesla’s global revenue of $ 31.5 billion (£ 23 billion) in 2020, according to public records.