Chinese electric vehicle maker Zeekr overcame a choppy IPO market and concerns about demand for electric vehicles with a strong debut on the New York Stock Exchange last Friday, reaching a valuation of $6.8 billion after that traders will push its shares 35% above their initial selling price by the end of the day.
Zeekr is one of several Chinese electric vehicle brands; his peers include BYDsmartphone-turned-car company Xiaomiand Zeekr's parent company Geely Auto, which have made a splash thanks to huge investments in electric vehiclesthat have taken the Chinese market by storm and sent U.S. and European regulators scrambling to protect their domestic automakers from a wave of Chinese imports.
Zeekr is not the first major Chinese EV maker to list in the U.S. Some of its smaller competitors, such as CHILDXPeng and Auto LiThey have been listed on US exchanges since 2018. But Zeekr's impressive debut coincides with growing recognition of China's dominance in the electric vehicle sector and the possibility of a looming trade war: The Biden administration reportedly plans to tax Chinese EV imports up to 100%, four times the current rate..
But any tariff increase would have little immediate impact on American consumers. Currently, no Chinese EV maker sells cars in the U.S., and a Geely spokesperson told InsideEVs that Zeekr is eyeing the US market but has not yet committed to passenger vehicle sales.
The Zeekr brand is owned by Geely Auto, a Hangzhou-based company with long-standing ties to volvo that has become China's second largest automobile manufacturer. Unlike competitors like BYD, which have eaten up market share in China by I sell vehicles for only $10,000.Zeekr sells luxury vehicles at a higher price. according to its prospectus filed with the SEC. Some of their most popular models include the ZEEKR 001, a five-seater hatchback that It sells for about $55,000. in Europe, and the ZEEKR X, a luxury SUV that retails for a similar cost.
“If you look at the big picture, the market [in China] “It’s very, very busy.” Zeekr CFO Yuan Jing told CNBC following the IPO on Friday.. "But if we zoom out a little bit and look at each of the price ranges in the market, there is definitely an opening for the more premium market segments."
after a icy IPO market in 2022 and 2023Zeekr is riding a wave of investor interest in new listings that has resulted in strong valuations for companies like redditcruise operator Vikingand Rubric start data. Initial Zeekr Share Price made it the largest IPO of a Chinese company in the US since 2021.
Zeekr's growth prospects could be hampered by US and European trade policies. As The Chinese market has become more saturated and demand has softened, Its electric vehicle makers have increasingly turned to foreign markets to keep sales high. Southeast Asia has become a key growth area.But politicians in the United States and Europe have He promised to impose strict tariffs if Chinese vehicles threaten to weaken prices of domestically produced cars.. The Biden administration is Reportedly About to Quadruple Taxes on Imported Chinese EVswhich would more than double its final price and make it more difficult to compete with more expensive offerings from companies like Ford, GM and Stellar.
But since there are currently no Chinese electric vehicles available to American consumers, Biden's likely tariff increase is more symbolic How practical. And even before the tariff news, Chinese automakers like BYD said they did not plan to sell in the US.
Last week, Stella Li, CEO of BYD Americas, said that “the United States is no longer… an open market,” citing protectionist trade policies such as tariffs. "The United States is becoming a very protective market... We have no plans to sell in the United States"
But the US's aggressive trade policy against Zeekr and its peers, along with the possibility of similar strategies in Europe, thwart any global ambitions Zeekr may have, meaning investors are likely viewing the stock more as a play on demand for electric vehicles in China and East Asia, where Zeekr already has a strong foothold.
If Zeekr's stock price is any indicator, investors don't seem too concerned about Zeekr's lack of US market share. The stock hit a high of $32 per share on Monday, an increase of more than 50% from the initial IPO price and implies a market capitalization of more than $7 billion. That's far behind many of its competitors, even after a brutal year for its stock, tesla It's still valued at over $500 billion, but it's still a strong signal for Zeekr and investor interest in Chinese EVs in general.
