Geely cleans up: Zeekr takes majority stake in Lynk & Co
We had just experienced the “restart” of Lynk & Co with the 02, and now everything could change again. A brief recap: Lynk & Co is the older brand, founded in 2017, and focused on hybrids and plug-in hybrids. Also in Europe, where it mainly operated with a subscription and rental model. Selling was just a secondary option. The Lynk & Co 01 is based on the Volvo XC 40, but after some good years, it was hardly successful anymore. The brand fell into a deep slumber. New models were introduced in China, but here too the brand's momentum waned. This was due to the establishment of Zeekr in 2021, which was once developed from Lynk & Co. Purely electric and more dynamic. Thus, Zeekr has been consistently successful in China.
Lynk & Co was always “related” to Zeekr
The crux: The new Lynk & Co 02 is technically closely related to the Zeekr X, and with the necessary expansion of Lynk & Co's model portfolio to include electric models, the two brands are getting closer – after all, they rely on identical Geely vehicle platforms and production networks. Moreover, both brands have always had a similar design language. Geely may have wanted too much too quickly here. This is what is supposed to change now.
Chinese shell games: The change in participations
The state-owned Chinese newspaper “Economic Daily” reported that Geely wants to consolidate its brands for New Energy Vehicles. According to this, Zeekr is to internally take over a majority stake in Lynk & Co within Geely. This was then played out indirectly, in this case via Volvo in Sweden: Volvo Cars, where Lynk & Co was founded together with Geely as a joint venture in 2017, is now selling its 30 percent stake internally to Zeekr. The purchase price is approximately 710 million euros. Thus, after Polestar, Volvo has indirectly handed over Lynk & Co to the “parent” Geely as well.
Officially, Volvo wrote:
“The divestment is related to a new development phase of Lynk & Co, which envisages a new ownership structure for the company. Volvo Cars will continue to focus on operational collaborations with Lynk & Co in selected markets where there is a strategic benefit for both companies.”
They want to accelerate synergies
According to Geely, they want to accelerate technological synergies between the two brands, streamline the product portfolios, and promote talent development, which is ultimately intended to lead to higher global sales volumes, as per Geely's plan. In this context, Zeekr will not only take over Volvo's 30 percent but also additional shares from Geely: so Zeekr will hold 51 percent of Lynk & Co, with Geely holding the remaining 49 percent.
Geely increases its stakes in Zeekr
But the shift continues: Geely Auto also wants to increase its stake in Zeekr to around 62.8 percent in order to further promote the cooperation of the Geely Auto, Lynk & Co, and Zeekr brands. They want to leverage industrial synergies, use hardware and software commonalities, improve supply chain efficiency and customer service, thus creating a stronger global group. Or as Geely CEO Li Shufu puts it:
“This integration is an important measure for Geely Holding to implement its long-term strategic plans. The coordination and integration of our brands support their sustainable operation and create greater synergies, which have a positive impact on sales, services, revenue, and the competitiveness of our products, allowing our companies to provide greater value and opportunities to both global consumers and shareholders.”
But: Both brands are important: Together, they accounted for about 30 percent of Geely's total sales in the first three quarters of 2024. In October 2024, Lynk & Co sold 31,074 units, ahead of Zeekr with 25,049 vehicles, but that could quickly change because: In 2024, Zeekr was able to increase its sales by 92 percent, while Lynk & Co "only" increased by 26 percent.
Zeekr is still making a loss, but it's decreasing
Zeekr recently released its figures for the third quarter of 2024: Zeekr made 18.36 billion yuan (which is around 2.4 billion euros) in revenue. The net loss in the third quarter of 2024 amounted to approximately 150 million euros—almost 22 percent less than in Q3 2023 and 37 percent less than in Q2 2024, which means Zeekr is still in the red, but it could break even in 2025.
What does this mean?
With Lynk & Co, Zeekr, Volvo, and Polestar, Geely has four similar brands in the premium segment. Currently, they are being repositioned within the company by shifting shares. For Europe, this might be too many. If Zeekr sustainably outpaces Lynk & Co, it could potentially signal the end for the brand that is currently being repositioned.
Translated automatically from German.
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