Geely’s Lotus Seeks to Raise $1 Billion for Push into China’s Electric Vehicle Market

Zhejiang Geely Holding Group is planning to raise $1 billion to help its luxury British sports car brand Lotus Cars enter China’s vast and growing electric vehicle (EV) market, according to people familiar with the matter, Bloomberg reported.

The funding round could value total Lotus’ EV operations at $5 billion, the sources said. Apart from the fundraising, Geely is also considering launching an initial public offering for Lotus Cars, or just its EV business, as soon as next year. When the British carmaker goes public, it could be valued at more than $15 billion.

Under Geely, Lotus in 2019 introduced its first pure-electric car, the Evija. The carbon fiber-monocoque-based hypercar is equipped with four motors, claimed to produce a combined 2000PS (1973bhp) and making it the most powerful road car in history. The Evija is priced at $2.1 million.

Founded in 1996 by billionaire entrepreneur Li Shufu, Geely owns Swedish automobile marque Volvo Cars. In 2017, Geely purchased a 51% stake in Lotus Cars, with Malaysian car group Etika Automotive holding the remaining 49%. The Hangzhou-based company is China’s biggest manufacturer of locally-branded conventional automobiles and is ploughing resources into the electric vehicle sector. Recently, it teamed up with Chinese search giant Baidu to create a standalone electric car company.

Geely is piling into an already crowded arena, where an array of players from Tesla to local start-ups XPeng, Nio and Li Auto are angling for a slice of the world’s largest EV market. Smartphone maker Xiaomi announced plans last month to establish an electric car business. Domestic online media outlet LatePost, citing a person with knowledge of the matter, reported earlier this month that ride-hailing platform Didi Chuxing is expected to start its own automobile manufacturing unit. Telecom giant Huawei announced on Monday that it will invest more than $1 billion in research and development for self-driving and electric vehicles this year.

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Research firm Canalys projects that in 2021, EV sales in China may reach 1.9 million units, marking a 51% surge year-on-year and a 9% growth of EVs within the country’s overall automobile market, as consumers embrace greener vehicles and the government provides subsidies to support the industry.

Hong Kong-listed shares of Geely climbed 5% on Wednesday and closed up slightly by 0.74% on Thursday.