Chinese automaker Geely Automobile Holdings Limited (OTC: GELYF) plans to target rival Tesla Inc. (NASDAQ: TSLA) in the high-end segment by launching a new premium EV brand, Reuters reported Thursday, citing people familiar with the matter.
What Happened: Geely, the owner of Volvo Cars, plans to roll out electric vehicles under a new brand named “Zeekr”, with different branding and sales strategies, according to the report. The models will be based on the company’s open-source EV chassis called Sustainable Experience Architecture (SEA).
Zeekr will be housed under Geely’s to-be-launched EV entity Lingling Technologies, as per the report. Further, Geely plans to open showrooms in city centers to sell cars at a fixed price, marking a departure from its tradition of selling cars through dealerships.
See Also: A New Rival To Tesla And Nio? This Lesser-Known Chinese EV Stock Has Surged 924% In A Year
Why It Matters: As part of its efforts to expand into the EV segment, Geely entered into partnerships with companies such as Chinese internet firm Baidu Inc. (NASDAQ: BIDU) and Apple Inc. (NASDAQ: AAPL) supplier Hon Hai Precision Industry Co. Ltd. (OTC: HNHPF) earlier this year. Geely confirmed in February that it will form a separate all-electric vehicle company.
In addition to Geely and Tesla, homebred Chinese companies such as Xpeng Inc. (NYSE: XPEV), Nio Limited (NYSE: NIO) and Li Auto Inc. (NASDAQ: LI) are also vying for a piece of the lucrative Chinese EV market, which is the world’s largest. The Chinese government has set a target of new energy vehicles or NEVs forming one-fifth of auto sales by 2025.
Price Action: Geely shares closed 2.2% lower on Thursday at $3.12, while Tesla shares closed 6.9% lower at $653.16.
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