Geely Automobile Holdings Limited (Geely Auto), the Chinese automaker, has announced plans to take its premium electric vehicle (EV) brand Zeekr private from the U.S. stock market. The company intends to acquire the remaining 34.3% stake for 2.2 billion USD, in addition to its current 65.7% ownership. Geely Auto is offering 25.66 USD per share, a 13.6% premium over the previous day’s closing price.
Zeekr made headlines when it was listed on the New York Stock Exchange in May 2024, raising 441 million USD. However, just a year after its initial public offering (IPO), the company is now pursuing delisting. Geely states that this move aims to boost operational efficiency, eliminate redundant investments, and achieve cost savings.
The Rationale Behind Zeekr’s U.S. Delisting
Zeekr, launched in 2021 as Geely Auto’s high-end EV brand, entered the market with models based on its proprietary electric Sustainable Experience Architecture (SEA) platform. However, recent political concerns in the U.S. regarding Chinese company listings have emerged. Some Republican lawmakers have petitioned the U.S. Securities and Exchange Commission (SEC) to delist Chinese firms, including Zeekr, citing potential national security risks.
In response to this political pressure and market dynamics, Geely Auto appears to be repositioning its brand strategy through the full integration of Zeekr, aiming to bolster its competitive edge in the global EV market.
Industry Analysis
Zeekr’s decision to delist from the U.S. market underscores the political challenges Chinese EV makers face globally and highlights the need for strategic realignment.
First, the increasing U.S.-China tensions are making it progressively difficult for Chinese firms to maintain U.S. listings. Zeekr’s move may set a precedent for other Chinese companies to reevaluate their listing strategies.
Second, by fully integrating Zeekr, Geely Auto aims to streamline its brand portfolio and optimize resource allocation. This strategic shift is likely a response to the intensifying competition in the global EV sector.
Lastly, this development offers valuable insights for global automakers. It underscores the importance of managing political risks and maintaining brand consistency as key factors for sustainable growth in the international market.
