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Electric cars in China

Geely to invest $300m to launch new EV brand Zeekr

'No major impact' from chip shortage yet but supplies already tight

The first Zeekr model will be based on the "Zero Concept" car unveiled last September by Geely's Lynk & Co. unit (Photo provided by Geely Auto).

HONG KONG -- Geely, China's largest private-sector carmaker, on Tuesday announced the launch of a new electric vehicle unit, the latest in a string of recent initiatives that have included forming partnerships with Tencent, Baidu and Foxconn.

Total initial investment in the new China-focused Zeekr unit will be 2 billion yuan ($307 million), with 51% coming from Hong Kong-listed Geely Automobile Holdings and the other 49% from parent Zhejiang Geely Holding Group.

Eric Li Shufu, Geely's founder, will be chairman of Zeekr while An Conghui, group president and chairman of Geely Auto, will serve as chief executive.

Zeekr vehicles will be built using the pure electric "Sustainable Experience Architecture" platform Geely unveiled last fall at the Beijing Auto show.

Daniel Li Donghui, chief executive of Zhejiang Geely, said during an online news conference Tuesday that the new company would provide a framework for the group to work with other partners.

"The trend in the auto industry is to cooperate," Li said. "This structure will give us sufficient flexibility in introducing strategic investors."

He added that the wide range of group resources needed in the development of new types of electrified and connected vehicles was also a factor in the formation of Zeekr. "A single company is not large enough," he said.

Planning for the new premium brand started five years ago, An Conghui said, while declining to go into detail about how Zeekr would be different from other EV brands under the Geely umbrella including Lynk & Co., Geometry and Polestar.

More would be revealed next month, An said, adding that Zeekr would have its own supply chain, products, customers and capital structure.

Zeekr will be known in Chinese as "Ji Ke," apparently based on the sound of its English name.

The announcement of the new EV platform unit coincided with a rather dismal annual results announcement Tuesday from Geely Automobile.

Revenue last year slipped 5.4% from a year before to 92.11 billion yuan while net profit declined 32.4% to 5.53 billion yuan. This was the second straight year the two measures fell.

The Chinese automaker is also not immune from the semiconductor shortage shaking the industry. An, who was upbeat on other topics, "There have not been any major impact up until today."

An explained that normal production planning and procurement was usually made about three months in advance, but supply visibility was virtually day-to-day now. "It has reached a stage where it has [virtually] disappeared," he said.

While admitting there had already been some supply impact, he said he wished to "bring down the loss to minimum" while he "dare not guarantee" that the company can escape further effects from the shortages.

"On this, I am not able to give you an affirmative answer," he said.

Asked about the company's plans to list its shares in Shanghai, Geely Auto Chief Executive Gui Shengyu said, "Until this point, we have not received any news from the state institutions which give approval, so it is not convenient for us to make any statement on this."

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