Tesla On Geely's Mind As It Launches A High-End EV Line: Reuters

Chinese automaker Geely Automobile Holdings Limited GELYF plans to target rival Tesla Inc. 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. BIDU and Apple Inc. AAPL supplier Hon Hai Precision Industry Co. Ltd. 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. XPEV, Nio Limited NIO and Li Auto Inc. 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.

Read Next: Tesla Rival Rivian To Install Over 3,500 Fast EV Chargers And Another 10,000 Open To Public By 2023

Click here to check out Benzinga's EV Hub for the latest electric vehicles news.