Why Geely Chose to Privatize ZEEKR

On May 7, 2025, Geely announced a non-binding offer to privatize ZEEKR at a premium, aiming to consolidate its ownership from approximately 65.7% to 100% and delist ZEEKR from the NYSE. Several key factors drove this strategic decision:

Internal Strategic Realignment

Geely’s "Taizhou Declaration" in late 2024 signaled a strategic pivot towards eliminating internal competition among its brands, notably ZEEKR and Lynk & Co. The privatization allows Geely greater flexibility and clearer alignment among its subsidiaries. By integrating ZEEKR fully, Geely seeks to streamline its resources, avoiding overlap and maximizing synergies.

Capital Market Realities

ZEEKR's underwhelming stock performance post-IPO prompted Geely to reconsider its listing strategy. Although operational metrics remained solid—revenue grew nearly 47% in 2024 and losses narrowed significantly—the market valuation failed to meet expectations. Privatization offers an opportunity for Geely to revalue ZEEKR internally, preparing for a potential relisting in Hong Kong or mainland China at a more favorable valuation.

External Geopolitical Pressures

Geopolitical tensions between China and the U.S. introduced significant risks for Chinese companies listed on American exchanges. The volatility and regulatory uncertainty around auditing and sanctions added urgency to Geely’s decision to privatize and protect its premium EV brand from external shocks.

The Brief History of ZEEKR

ZEEKR, established in March 2021, is Geely Auto’s premium electric vehicle (EV) brand, aimed at competing with Tesla, NIO, and other upscale EV makers. With Geely’s extensive resources and technology, ZEEKR rapidly entered the market. Its first model, the ZEEKR 001, sold out swiftly during pre-sales and quickly established itself as a popular luxury electric shooting-brake.

Following the 001, ZEEKR expanded its portfolio to include the ZEEKR 009 luxury MPV, the compact SUV ZEEKR X, and the mid-size sedan ZEEKR 007, covering a broad spectrum of segments. By 2023, ZEEKR’s annual sales reached approximately 118,700 vehicles, marking a 65% increase year-on-year, and revenues hit RMB 51.7 billion, up 62% from the previous year. In May 2024, ZEEKR debuted on the New York Stock Exchange, becoming one of the fastest Chinese EV startups to go public.

Despite impressive early performance, ZEEKR's stock struggled post-IPO, reflecting investor skepticism amid broader geopolitical and economic uncertainties.

Current Landscape of China's EV Market

China’s EV industry has grown rapidly, reaching a penetration rate of nearly 48% in 2024. The market is characterized by intense competition, driven by both established leaders and emerging players.