On May 10, Geely's Zeekr was successfully listed on the New York Stock Exchange with the stock code "ZK". The issue price of ZEEKR was $21, and the stock price rose sharply after listing, and finally closed at $28.26 on the first day of listing, with the latest market value of $6.898 billion (about 49.85 billion yuan), close to Xpeng's $7.3 billion. However, it is at a nearly 50% discount to the valuation of the previous funding round in February 2023, when Zeekr was valued at $13 billion.
This listing not only refreshed the record of the fastest listing in the history of new energy vehicles, but also took only 37 months from the brand launch to the successful IPO. Previously, it took seven years for Tesla, and six, five and four years for Xpeng, Li and NIO respectively.
ZEEKR brought various models to check in to New York landmarks Image source: ZEEKR
After the successful listing of ZEEKR, Li Shufu's listed companies will reach 9, including Geely Automobile, Volvo, Polestar, ECARX, Qianjiang Motorcycle, Hanma Technology, Lifan Technology, and Lotus.
As an emerging electric vehicle brand, ZEEKR has shown an amazing growth rate despite its short existence. This growth is not only reflected in sales volume, but more importantly in the transformation of organizational structure and corporate culture. From being born as a manufacturing enterprise at the beginning, to a technology-based company focusing on product development and user experience, ZEEKR has completed a transformation.
For Geely and Li Shufu, the listing and future development of ZEEKR are also of great significance. It not only proves Geely's strength and influence in the field of electric vehicles, but also provides more opportunities and possibilities for Geely's future development.
Rim "Creation 2nd Generation"
When it comes to ZEEKR, we must first start with Geely's advance and mistakes in the new energy strategy.
As early as 2015, Geely released the "Blue Geely Action Plan", announcing that by 2020, new energy vehicle sales will account for more than 90% of the overall sales, showing a positive attitude towards new energy. In this plan, Geely not only said that it will focus partly on gasoline-electric hybrid vehicles, but also said that it will conduct research on hydrogen fuel vehicle technology.
Subsequently, in 2015, Geely launched its first new energy vehicle, the Emgrand EV, a move that won Geely a certain market share. In 2016, Geely's NEV sales reached 49,000 units, second only to BYD (100,000 units). Tesla also sold only 76,000 vehicles that year.
However, despite a decent start, Geely has not been able to continue the momentum. On the contrary, they returned to the traditional fuel vehicle market and missed the best opportunity to seize the new energy market. It wasn't until June 2018 that Geely launched the all-electric SUV Emgrand GS, but at this time it had missed the golden period of the market.
In 2019, Geely tried to enter the new energy market again, launched Geometry Auto, and declared that it would become "the best pure electric vehicle in the Eastern Hemisphere", directly challenging Tesla. However, the response to the launch of Geometry Auto was mediocre, and the brand image and sales volume failed to meet expectations, but became the choice of some B-end online car-hailing.
By the end of 2020, when the action plan ended, Geely Automobile had sold a total of 1.32 million new vehicles, of which only 68,000 were new energy vehicles, accounting for less than 5% of the overall sales, which is far from the "Blue Geely Action Plan".
Geely's slackness is not an isolated case, almost all traditional car-making forces have the same problems, including Changan, Great Wall, etc. The new energy vehicle market has been tepid for the past decade, and almost no one could have imagined that it would explode so quickly after 2020.
Subsequently, Geely learned from the pain and began to increase resource investment. In 2021, they released the upgraded "Smart Geely 2025" strategy, which plans to invest 150 billion yuan in R&D over five years and launch more than 25 new smart new energy products. According to the plan, Geely will achieve annual sales of 3.65 million vehicles by 2025, of which 650,000 will be Zeekr models and 3 million Geely brand models.
This strategy is divided into two routes: one is to focus on energy-saving and new energy vehicles, including hybrid vehicles and plug-in hybrid vehicles; The second is to focus on pure electric intelligent vehicles and establish a new pure electric vehicle company. Geely's Emgrand, Borui and Lynk & Co brands are all taking the route of hybrid vehicles. And ZEEKR is the product of Geely's implementation of the second route.
ZEEKR was officially unveiled in 2021, and its management team is also unprecedentedly high: Li Shufu, founder of Geely Holding Group, personally serves as the chairman of ZEEKR, and An Conghui, president of Geely Holding Group, serves as CEO of ZEEKR. In the Geely Group system, ZEEKR's status is also higher than that of sub-brands such as Polestar, Geometry Automobile, and Lynk & Co, and is on par with Geely Automobile and Volvo, and enjoys almost all the high-quality resources under Geely Holding Group.
Of course, the investors behind ZEEKR are also extremely powerful. ZEEKR's first round of investors include Intel Investment, CATL, Hongshang Group, Bilibili, and Boyu Investment, while Series A investors include Amnon Shashua, founder and CEO of Mobileye, CATL, Yuexiu Industrial Fund, Commerce Fund, Quzhou Xin'an Intelligent Manufacturing Fund, etc.
Although similar to SAIC Zhiji and Changan's AVATAR, ZEEKR is also classified as a "second generation", but its uniqueness is that it is not incubated internally, but chooses to split from Geely and operate independently. This also laid a unique gene for its later development.
"Old Mage" enters the "Newbie Village"
Zeekr CEO An Conghui is one of Geely's veterans, who joined Geely in 1996 and has been involved in the company's growth.
Of course, this is not the first time An Conghui has experienced a car-building boom. As early as the beginning of this century, mobile phones, home appliances, and even liquor brands were involved in building cars, but as a result, most companies went bankrupt.
However, An Conghui believes that today's wave of new car manufacturing is different from the past. Although the competition is fierce and the industry reshuffle still exists, the current new technology and different production and marketing models have brought greater development prospects to the industry.
This also means that if the "old mage" An Conghui wants to re-enter the "novice village" and carry out a "second venture", he needs to constantly adjust the company's organizational structure, product logic and communication methods with users. He believes that ZEEKR is no longer a traditional manufacturing enterprise, but a diversified, co-created and equal technology company. There are talents from all walks of life in the team, only one-fifth of the 17 executives are from Geely, and the rest are from different fields such as Internet, chips, and FMCG.
For this reason, An Conghui, who is over 50 years old, changed out of his suit and leather shoes, put on casual clothes, and did not let everyone call Mr. An, but "Congcong". Congcong has also settled in the ZEEKR App, directly communicating with users, and earnestly pursuing user co-creation.
In addition, ZEEKR has taken a differentiated route from other new brands in terms of product strategy. Often, the preferred way for a new brand to start is with SUVs, as this is the segment with the widest audience and is conducive to building awareness for the new brand. However, ZEEKR chose to start from niche routes such as hunting coupes, luxury MPVs, and compact SUVs, and boosted sales by creating explosive products, and finally entered the mainstream mass market of B-class sedans through ZEEKR 007.
From an external point of view, the development of ZEEKR is a "fast-forward mode": the company was officially established in late March, and in mid-April, the ZEEKR brand and its first model, ZEEKR 001, were officially released, with a total of 6,007 units delivered that year, and soared to 71,941 units the following year, an increase of more than 10 times.
It is particularly worth mentioning that in April 2022, the monthly orders for ZEEKR 001 exceeded 10,000 units. This achievement is very amazing for a model priced at more than 300,000 yuan, generally speaking, it takes several years of hard work for brands such as Tesla and Wei Xiaoli to reach this level, while Zeekr only took a year.
2024 Beijing Auto Show ZEEKR Platform | Image source: ZEEKR
Of course, in the process of growing up with ZEEKR, falls and falls are inevitable. First of all, when ZEEKR 001 was listed, due to problems such as delayed delivery, disguised price increase and reduction, and private replacement of suppliers, it was frequently condemned by car owners, and some supporters of ZEEKR 001 blind booking also began to transfer orders in large quantities.
At the same time, after the delivery of ZEEKR 001, the car machine experience has been seriously criticized. Some users complained, "The car machine always reports faults inexplicably, is this the case with ZEEKR's products?" In order to save its reputation, ZEEKR did not hesitate to spend 300 million yuan to replace the 8155 chip for users free of charge.
In the face of these two incidents, An Conghui, CEO of ZEEKR, chose to apologize to users in person, and published an open letter signed as "An Conghui" instead of "ZEEKR". He said that he will continue to listen to the voice of users, welcome everyone to communicate with the company at any time, and the company will respond to users' concerns in a frank and transparent manner in a timely manner. This is the first time that An Conghui has publicly apologized as CEO, demonstrating the importance he attaches to users and the brand's reputation.
ZEEKR's first car to the mainstream market - ZEEKR 007 | Image source: ZEEKR
However, with the intensification of the price war and the increase in competing models, the sales growth rate of ZEEKR has slowed down, especially in the second half of 2023, and it has obviously encountered a sales bottleneck. From July to December 2023, the monthly sales of ZEEKR will be 12,039, 12,303, 12,053, 13,077, and 13,476 respectively. Among them, the performance of the compact pure electric SUV Zeekr X, which will be launched in 2023, is not stable, with monthly sales fluctuating between 1,000 and 4,000 units, and the performance has not met Zeekr's expectations.
Until the launch of ZEEKR 007 and the new ZEEKR 001, ZEEKR returned to rapid growth. From January to April this year, ZEEKR Automobile sold a total of 49,148 vehicles, a year-on-year increase of 111%, winning the sales championship of more than 200,000 Chinese pure electric brands in 2024.
The "marathon" of new cars has just begun
The road to ZEEKR's planned listing is not smooth. Initially, ZEEKR chose Hong Kong as the listing venue. At the beginning of 2022, Geely Automobile announced that it planned to spin off Zeekr and make it an independent listing. But just a month later, ZEEKR changed its plans and decided to go public in the U.S. in the hope of obtaining a higher valuation.
As a result, in November 2023, ZEEKR submitted its first application for listing in the United States. However, due to factors such as high inflation and high interest rates, ZEEKR had to suspend the process of listing in the United States.
At this time, the listing of ZEEKR should be a good time window. Since Didi's delisting in 2021, the U.S. attitude towards Chinese IPOs in the U.S. has been unfriendly, and it is not until the easing of Sino-US relations in 2023 that it has improved. In the first quarter of this year, six Chinese companies successfully went public in the United States, including Geely's Lotus, which went public through SPACs.
On the other hand, ZEEKR is currently in the stage of a product offensive. In April 2024, ZEEKR delivered a total of 16,089 new vehicles, a year-on-year increase of 99% and a month-on-month increase of 24% from March, with sales reaching a record high. Among them, the new ZEEKR 001 has accumulated nearly 40,000 orders since its launch, and the market performance is strong.
However, for ZEEKR, the listing is just a starting point. When ZEEKR was first founded, An Conghui set an ambitious five-year plan: by 2025, the annual sales volume will reach 650,000 units, ranking among the top three luxury electric vehicle brands in the world. This means doubling the growth rate every year, which is a huge challenge. In 2024, ZEEKR's delivery target is 230,000 units, double the 118,000 units in 2022.
At the same time, An Conghui also warned that the entire automotive industry will face great changes in 2024, the knockout tournament has begun, and this year there is no room for error for automotive companies, and any mistake may lead to total failure.
Although ZEEKR has been excellent in terms of power and handling, it still lacks in intelligence. Especially in terms of intelligent driving and intelligent in-vehicle systems, the development of ZEEKR is relatively lagging behind. For example, in terms of intelligent driving, although the NZP high-speed pilot driving function has been introduced, the function coverage is limited and the update is slow, which is slightly insufficient compared to its competitors.
In contrast, Xpeng's XNGP system can seamlessly connect high-speed, urban, parking lot and other scenarios to achieve full-process assisted driving. Huawei's Wenjie brand also plans to achieve nationwide intelligent driving without relying on high-precision maps by the end of the year.
In addition, there are also some problems with ZEEKR's smart cabin system. ALTHOUGH ZEEKR OS HAS GONE THROUGH MANY ITERATIONS, THERE ARE STILL SOME DETAILS THAT ARE LACKING, SUCH AS THE OPERATION LOGIC IS NOT SMOOTH ENOUGH. In contrast, some other brands have already carried similar features and are better in terms of user experience.
At the 2024 Beijing Auto Show, ZEEKR released the geek MIX |, known as the "baby bus". Image source: ZEEKR
As the competition in the electric vehicle market enters the second half, intelligence has become the focus of fierce competition among car companies. ZEEKR needs to speed up to make up for its shortcomings.
In addition, it is worth noting that the growth rate of the electric vehicle market in which ZEEKR is located has begun to slow down further. In 2023, the sales of pure electric models will reach 6.113 million units, a year-on-year increase of 21.9%, however, compared with the previous growth rate, it has decreased significantly. The growth rate in 2022 and 2021 will be 83.3% and 182.9%, respectively.
During this year's Beijing Auto Show, a scene that attracted widespread attention was that Li Xiang, the founder of Ideal, appeared at the NIO booth and sat in the NIO ET7 with Li Bin of NIO, discussing the topic of how difficult it is to sell high-end pure electric vehicles. Li Xiang said that high-end pure electric vehicles are too difficult to sell, and it is difficult to push without an energy supplement network. Li Bin agrees with this, now you know how difficult it is for NIO to sell so much.
Ahn Conghui has said that he loves long-distance running because it is a sport with no end in sight. In the current highly competitive market environment, ZEEKR needs to increase investment in intelligence to enhance product competitiveness. At the same time, it is also necessary to pay attention to the overall changes in the market and adjust strategies in time to maintain a competitive advantage. ZEEKR needs to be like a marathon runner, always in a state of running, and cannot be satisfied with a short-term lead.