Chinese car manufacturer Geely Auto has launched a brand of premium electric vehicles in China as it seeks to push back against Tesla's leading position in its domestic market and recover from the financial impact of the Covid-19 crisis.
Geely HQ, Hong Kong. Credit: Geely
Geely said that it would develop high-end EVs under the Zeekr brand along with its parent company Zhejiang Geely Holding Group, which also owns Volvo Cars.
It is expected that the venture will begin deliveries in the third quarter of this year.
Geely retained its spot last year as China's largest domestic automotive brand, largely thanks to the company's fast response to last year's pandemic, which allowed it to secure supplied and restart production ahead of its competitors.
Read more: China's Geely develops EV tech platform for own brands & rivals alike
Nonetheless, the company was not immune to the effects of the pandemic. The crisis saw Geely's revenue fall by 5% last year, with net profits down by 33%, according to figures released earlier today. Unit sales were also down 3% to 1.32 million.
One of the many effects of the pandemic was to cement China's position at the heart of the global automotive industry. While year-on-year sales of vehicles in the country - the world's largest market - dropped by 6% in the second half of last year, it was still a much stronger performance than most other global markets.
Beijing is aiming that 25% of all cars sold in China are electric by 2025. In December, a record 224,000 battery and hybrid vehicles were sold in the country.
Geely is banking that the move into China's premium EV market will give the brand a new sales momentum. However, the company faces stiff competition, not just from Tesla, but also from other homegrown brands such as Xpeng, Nio and Li Auto, and global carmakers some of whom are to launch electric models in the country later this year. Tesla's Model 3 was the top-selling EV model in China last year.
While the move will be costly for Geely, it is also seen as necessary if the company is to be a serious challenge to Tesla on its home turf.
Li Shufu, the chair of Geely's parent company Zhejiang Geely Holding, has ambitions to transform his auto company into China's first truly global carmaker with a reach akin to that of Volkswagen. Brands owned by the company include Lotus, Volvo, and the company holds a minority stake in Daimler, owner of Mercedes Benz.
Read more: Volvo to merge engine ops with Geely & focus on EVs
A plan to merge Geely Auto and Volvo was scrapped last month in favour of deeper collaboration on software development and electric vehicles.
Through Zeekr, Geely says it will demonstrate the competitiveness of its system for building electric cars that it will sell to its rivals.
The EV architecture was announced last year and is part of the Chinese auto firm's strategy to position itself at the heart of the industry's pivot to battery-powered vehicles.
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