Zeekr, a rising Chinese electric vehicle maker, shares surged nearly 35% above their initial public offering (IPO) price, highlighting a robust launch into the US market. This marks the first significant market entry by a Chinese company in the U.S. since 2021, setting a precedent for future international expansions.

A Strategic Entry Amid Global Competition

Facing fierce competition in its home market, Zeekr initiated its U.S. IPO with an eye towards capturing a larger share of the European market. The timing coincides with plans from the Biden administration to implement increased tariffs on imports of Chinese vehicles. This strategic move underscores Zeekr’s ambition to cement its presence on a global scale, amidst tightening regulations and shifting market dynamics.

Under the leadership of CEO Conghui An, who also serves as president of Geely Holding Group, Zeekr’s parent company, the brand has positioned itself as a contender in the new energy vehicle sector. Established in 2021, Zeekr caters to the burgeoning demand for luxury EV models in China, having delivered nearly 200,000 cars primarily within its domestic market.

Market Valuation and Growth Prospects

Despite its aggressive expansion strategy, Zeekr’s market valuation at the time of its IPO stood at $6.8 billion—half of what it was during last year’s funding round. This reflects the intense competition both domestically, against rivals like BYD and Tesla, and internationally, as the company vies for a foothold in Europe.

The company’s shares experienced a notable increase, reaching $29.36 post-IPO from an opening price of $26, closing at $28.26. This 34.6% jump from the IPO price demonstrates investor confidence in Zeekr’s potential despite broader market uncertainties facing other EV manufacturers in the U.S.

Overcoming Challenges

Amidst a challenging environment for EV companies in the U.S., where giants like Tesla have seen significant stock declines, Zeekr’s successful IPO stands out. The company managed to raise $441 million by selling 21 million American depositary shares, exceeding initial expectations and indicating strong market demand.

Zeekr’s impressive delivery figures, outpacing competitors like Xpeng and Nio in early 2024, underscore the company’s promising start. This IPO comes at a time of heightened U.S.-China tensions, presenting both opportunities and challenges for Chinese companies looking to list in the U.S. market.

A New Era for Chinese IPOs in the U.S.?

The backdrop of this IPO is a complex geopolitical landscape, with issues ranging from trade tensions to intellectual property disputes. Yet, the resolution of an audit dispute between the U.S. and China in December 2022 signals a potential thawing of relations, possibly encouraging more Chinese companies to pursue U.S. listings.

The successful US launch of the Chinese rising EV maker, Zeekr, not only solidifies its position in the competitive EV market but also may herald a new wave of Chinese IPOs in the United States, demonstrating the resilience and global ambitions of Chinese enterprises.

Image Source: Asia Financial