It was only a matter of time until more Chinese automakers started showing up in North America. A good amount of General Motors’ Mexican lineup is made by SAIC, and China’s BYD and JAC both have cheap entrants into that market, including the super cute BYD Dolphin. But, those are generally cheaper cars, not the luxury EV brands that arguably China is starting to become known for in the EV sphere. Until now. A quiet filing in the Hong Kong Stock Exchange reveals that Volvo and Polestar parent company Geely Group has more plans for North America aside from randomly appearing at a one-off trade show or racetrack.
A recent filing by Geely Holdings group on the Hong Kong Stock Exchange revealed Geely’s plan to purchase vehicles, as well as the adjacent parts and accessories, needed for a vehicle service department that would serve the brand Zeekr. The end goal is to bring Zeekr-branded electric cars to Mexico.
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China’s EV brands have global ambitions
China is the world’s biggest EV market—and the most advanced. Steep tariffs over geopolitical concerns keep them largely out of the U.S. market for now, but it’s increasingly clear that many Chinese brands are making moves to sell cars here eventually.
I drove some of Zeekr’s cars late last year at an event in New York and came away largely impressed. For those not familiar—and that would be most people at this point—it’s a hot-selling brand in China that’s a bit like a less-expensive version of Polestar. Think of it as the Geely Group’s Acura. It’s especially positioned as a high-tech brand, still upscale and focused on performance (though less so than Polestar and Volvo) but sharing quite a bit of hardware with the rest of the conglomerate. Even then, it was clear that Geely had bigger plans for the brand than it was letting on.
Without context, this could simply be the story of yet another Chinese OEM attempting to establish a foothold in Mexico, and potentially the rest of Central, South, and Latin America. Yet, given the context of Zeekr’s continual appearances in the United States, and Volvo’s recent withdrawal of an investment in Polestar, it just seems like Geely’s plotting something bigger than a handful of sales in Mexico.
It’s no secret that the U.S. isn’t friendly toward Chinese-made vehicles. In fact, within the past few weeks, the antagonism has ramped up with more pointed criticism from elected officials and analysts alike. Some key members of the Biden administration have called for increased scrutiny of Chinese imports in relation to cybersecurity. Others have proposed an increase to the already hefty 27.5% tariff on Chinese imported vehicles.
That import fee is no doubt a bitter pill to swallow, especially since many automakers already struggle with making and selling EVs profitably. That doesn’t even touch on the fact these cars are completely ineligible for any sort of tax incentives (via purchase), possibly making them less price competitive compared to cars made in the US, Canada, or Mexico.
Yet it seems like the easiest way to circumvent this is to simply make the cars in a place that should be more acceptable to the U.S.
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Now, Geely and Zeekr haven’t officially announced that it’s establishing any manufacturing in Mexico quite yet. However, given my last chat with Zeekr representatives which revealed a “maybe we could, if the conditions are right,” during that media drive with the 001 electric station wagon and 009 luxury minivan, I think it would be naive to say that someone at Geely Holding’s isn’t at least considering the idea. BYD entered the Mexican market in mid-2023, and before the year was out, there were credible rumblings that the brand was already scouting Mexico for a suitable battery and/or vehicle manufacturing plant.
Sure, this could be another case of “tea leaf reading,” attempting to be clairvoyant about business matters conducted in a language I don’t speak. But hear me out. Now that Polestar is officially divorced from Volvo and more under Geely’s control, it’s not out of the question to see that the brand will look for ways to increase sales. Polestar and Zeekr occupy somewhat of the same market, the entry-level luxury EV space, and yet, Zeekr has outsold Polestar at a more than 2-to-1 ratio for 2023; Polestar has moved a mere 54,600 units compared to Zeekr’s 118,685. Keep in mind that Zeekr has only started to branch outside of China, while Polestar is available in China, North America, and much of Europe.
It’s not that Polestar’s vehicles are bad; I like the Polestar 2 a lot. But Zeekr’s offerings seem to be even more compelling, which explains why customers are buying those cars but ignoring Polestar in China.
Polestar currently only sells a sedan that shares its basic platform design with an internal-combustion car, but Zeekr has several models that are more well-suited for the markets it operates. For example, there’s the Zeekr 009, a large luxury EV van that competes in a very important space in China. The Zeekr X is a subcompact EV luxury crossover, a segment that people are very much interested in. Its latest model, the 007 sedan, may be the same size as the Polestar 2, but it is a newer fresher product based on a ground-up EV platform. It’s cheaper, too.
Zeekr products look fresh and don’t feel like any Volvo product, even if they may share a lot of things under the skin. It’s still not entirely clear if Polestar has convinced buyers that isn’t just a Volvo with a weird badge. Zeekr cars are newer, just as nice, and tend to be a little cheaper than the equivalent Polestar. What’s not to like?
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Given that Polestar is now more under the direct control of Geely, could we see Zeekr in its place in the US and Canada? It’s probably too soon one way or the other. But, it’s clear that Zeekr and Geely are in Mexico, and the Chinese EV expansion will continue whether we—or the American automakers—like it or not.
