Geely’s Li Shufu attends an event in Beijing.
WANG ZHAO/AFP via Getty Images
Eric Li, the chairman of Geely Automobile Holdings, looks set to add another $1.7 billion to his already considerable fortune.
The expected boost to Li’s wealth stems from his previously undisclosed 13.2% stake in Geely’s premium electric vehicle unit Zeekr Intelligent Technology, which filed on Friday for an initial public offering in New York.
Zeekr was valued at $13 billion in February, when it raised $750 million from investors including Chinese battery giant Contemporary Amperex Technology (CATL) and the government-affiliated Guangzhou Yuexiu Industrial Investment Fund, Geely announced at the time.
Li already had a net worth of $14 billion based on his stakes in automakers including Geely, Sweden’s Volvo Group and Britain’s Aston Martin.
The EV maker hasn’t revealed the size or the timeline of the listing, but it has dialed down its funding plan to raise less than its previous target of $1 billion, according to one person with knowledge of the matter. Still, the potential listing marks one of the largest from a Chinese company on a U.S. stock exchange in recent years, as geopolitical tensions and China’s crackdown on a broad range of industries have served to pummel funding activities.
Aside from the signals of some easing in the U.S.-China relationship, with preparations for next week’s meeting between the two countries’ presidents currently underway, Zeekr is hoping to tap into investor enthusiasm for the EV sector. Established in 2021, the company currently has three models available in its lineup—the five-seater Zeekr 001 hatchback, the six-seater Zeekr 009 MPV and the Zeekr X SUV, priced between $26,000 to $80,625.
Yale Zhang, Shanghai-based managing director of consultancy Automotive Foresight, says Zeekr faces intense competition, especially in some of its lower-priced models as rivals competing in the same market segment often resort to price wars to attract consumers. But he also notes that the brand’s close affiliation with Geely gives it an advantage when it comes to quality control and supply chain.
In the first half of 2023, Zeekr’s revenues more than doubled to 21.3 billion yuan ($2.9 billion), but losses also widened to $534 million from $423 million a year earlier. In October, the EV maker delivered 13,077 units, up from 12,053 in September and 12,303 in August, according to its prospectus.
The company is looking to expand outside mainland China in Hong Kong and Macau, as well as in Europe. But Zeekr itself also warned of “significant challenges” as a new market entrant, which includes going up against some fierce competition. It also said the government in China “exerts substantial influence” over its business, and may intervene in its operations to further the authorities’ regulatory, political and societal goals.
“Furthermore, the Chinese government has recently indicated an intent to exert more oversight and control over overseas securities offerings and other capital markets activities and foreign investment in China-based companies like us,” Zeekr said in its prospectus, adding that the actions, if taken, may hurt the value of its securities.