Zeekr, a Geely-owned luxury brand EV startup, eyes IPO

Zeekr, the luxury electric vehicle brand owned by Chinese automaker Geely, is making plans to make a  public debut. The EV startup is set to disclose some details this week regarding its intentions to list shares in New York, according to an exclusive report by Reuters, citing two sources familiar with the matter.

The IPO announcement arrives amidst growing enthusiasm for electric vehicles. Zeekr is looking to leverage this burgeoning trend, despite the tense relations between the U.S. and China.

This development also follows Zeekr’s $750 million funding round secured nine months ago from a mix of new and existing investors, valuing the company at $13 billion. Notable backers included Amnon Shashua, CEO and founder of the autonomous driving technology company Mobileye Global, as well as the Yuexiu Industrial Fund, an investment arm of the Guangzhou city municipal government, both new investors in the company.

Meanwhile, the EV brand plans to release its prospectus, and its shares may commence trading on the exchange within a few weeks after the announcement. However, both sources chose to remain anonymous when discussing this confidential information, the sources told  Reuters.

The underwriters overseeing this are led by Goldman Sachs and Morgan Stanley, according to one of the sources, who added that the size and price of the offering will be determined at a later stage. All parties involved, including Zeekr, Morgan Stanley, and Goldman Sachs, declined to provide comments, Reuters reported.

Zeekr had submitted a confidential filing for a U.S. initial public offering back in December, with an initial target of raising over $1 billion, as previously reported by Reuters. Nonetheless, one of the sources indicated that the company might not reach the intended fundraising amount from the IPO.

This confidential filing allows companies to withhold details from competitors for a longer duration and offers them greater flexibility, especially when the timeline for an IPO isn’t firmly established.

If the IPO proceeds, it could mark the first significant offering by a Chinese company in the United States in two years, following China’s tightened regulation on overseas share sales in 2021. This regulatory shift was triggered by a cybersecurity investigation into ride-hailing giant Didi Global shortly after its U.S. stock market debut.

While the competitive landscape in China’s EV market faces a price war instigated by Tesla at the beginning of the year, impacting the profitability of pure EV makers, Zeekr stands out due to its advantageous access to Zhejiang Geely Holding Group’s manufacturing facilities and cost-saving capabilities, resulting in improved profitability.

According to CEO Andy An, Zeekr saw a double-digit gross profit in the first half of this year, a notable increase from the 5% gross profit recorded in 2022. Established in 2021, Zeekr secured the 13th position in EV sales in China, with sales surpassing 79,000 units in the initial nine months, more than double the sales during the same period in 2022.

Zeekr offers four EV models in China, with its 001 crossover as the best-selling EV priced from 269,000 yuan. The brand has also announced intentions to expand into several overseas markets, including the Netherlands, Sweden, Germany, Israel, and Kazakhstan.

Zeekr, which currently has two full electric car models, released its first electric car, Zeekr 001, in China in October 2021. The company said it plans to release Zeekr 001 in Europe in 2023.

Zeekr is just one of the many brands owned by the Geely Group. In addition, the Geely group also owns other brands such as Polestar, Volvo Car, Lynk & CO, Lotus, London Electric Vehicle Company, and Geometry. Geely also owns Lotus Technology, a tech startup that spun out of British sports car maker Lotus. We covered Lotus last year after raising new funding at a $4.5 billion valuation.