Chinese EV maker Zeekr soars nearly 35% in stellar US market debut
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[May 11, 2024] By
Niket Nishant, Echo Wang and Sarah Wu
(Reuters) -Zeekr's shares rose almost 35% above their initial public
offering price on Friday in a strong start for the electric-vehicle
maker, the first major U.S. market debut by a China-based company since
2021.
The company successfully pulled off its U.S. flotation as it seeks to
stand out among a crowded group of Chinese electric-vehicle makers
competing for a bigger share of the European market.
Its first day of trading ironically comes at a time when U.S. President
Joe Biden's administration plans on boosting tariffs on Chinese vehicle
imports to the United States.
"The capital markets in New York are very favorable for new energy
vehicles. Zeekr is a global brand, and choosing to list in New York
further demonstrates its global capabilities," said CEO Conghui An, who
is also the president of Zeekr's parent company, Geely Holding Group.
Zeekr is the premium brand of Chinese automaker Geely, which also owns
Sweden's Volvo Cars and the UK's Lotus. It was formed in 2021 to tap
into growing Chinese demand for premium models and has since delivered
nearly 200,000 cars, mostly in China, according to its IPO filing.
Fierce competition in China among domestic rivals and with Tesla has
eroded EV makers' profits, prompting them to look at other markets for
expansion.
The debut gave Zeekr a fully diluted valuation of $6.8 billion, or about
half the $13 billion it fetched after a funding round last year.
![](http://archives.lincolndailynews.com/2024/May/11/images/ads/current/moriearty_sda_PROMGRAD_2024.png)
Chinese automakers BYD, SAIC and Great Wall Motor are all targeting
Europe, rolling out electric models as they seek to compete with legacy
European automakers on their turf. Chinese EV sales in Europe have
soared in recent years.
Zeekr's CEO said Geely aspires to become the Volkswagen Group of this
era of new energy vehicles, comparing the company to Europe's top
automaker.
Within Geely, Zeekr's mission is to address the luxury EV market
segment, he said.
Zeekr's shares traded as high as $29.36 after opening at $26, compared
with its IPO price of $21. The stock closed at $28.26, up 34.6%.
EV CHALLENGES
Shares of EV companies in the United States have lost substantial value
in recent months, including Tesla, the leading U.S. EV maker, which has
dropped 30% this year.
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![](../images/051124PIX/busine67.jpg)
Zeekr's electric vehicles (EV) 001 and 009 are seen displayed at its
booth during the first China International Supply Chain Expo (CISCE)
in Beijing, China November 28, 2023. REUTERS/Florence Lo/File Photo
![](http://archives.lincolndailynews.com/2024/May/11/images/ads/current/rainbowseamless_lda_SHG_2024.png)
Rivian Automotive has lost 85% since its IPO in November 2021, while
Lucid Group is left with a fourth of what it fetched when it signed
a deal with a blank-check firm earlier that year.
Zeekr, however, upsized its IPO, indicating strong demand from
investors. It sold 21 million American depositary shares to raise
$441 million. It had earlier planned to sell 17.5 million ADSs at a
price between $18 and $21 apiece.
Since the start of the year, the company's deliveries have overtaken
its nearest competitors.
Zeekr delivered 49,148 vehicles in the first four months ended April
30, while Xpeng delivered 31,214 units and Nio delivered 45,673 cars
during the same period, according to regulatory filings and press
releases.
The share flotation comes during rising tension between the world's
two biggest economies over trade, intellectual property, Taiwan and
China's stance on the Russia-Ukraine war.
The discount to last year's valuation could help draw in investors,
said Dan Coatsworth, investment analyst at AJ Bell.
"They're able to buy into a growing business at a fraction of last
year's valuation. Everyone loves a perceived bargain."
The number of Chinese companies that have pursued stock market
flotations in the U.S. in the past few years has dropped, after
Chinese ride-hailing giant Didi Global was forced to delist its
shares following a backlash from Chinese regulators.
Beijing has since softened its stance and released a set of rules
last year to revive such listings, after the U.S. accounting
watchdog and China resolved a longstanding audit dispute in December
2022.
(Reporting by Niket Nishant and Manya Saini in Bengaluru, Echo Wang
in New York and Sarah Wu in Beijing; Additional reporting by Arasu
Kannagi Basil; Editing by Anil D'Silva, Shounak Dasgupta and Pooja
Desai)
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