Geely Silver Galaxy is gathering momentum, while Zeekr and Lynk & Co still have room for improvement.

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Upon releasing its March sales data, Geely Auto once again became the focal point of the automotive industry.

With a total monthly sales volume of 232,200 units, marking a 54% year-on-year surge, and new energy vehicles accounting for over 51.6% of sales, the Geely Silver Galaxy brand led the way with 90,000 units sold and a 290% growth rate.

This growth was not a fluke, as it was anticipated in Geely's 2024 financial report – annual revenue increased by 34% year-on-year to RMB 240.2 billion, net profit soared by 213% to RMB 16.6 billion, gross profit margin rose to 15.9%, and cash reserves hit a new high of RMB 39.8 billion.

As Gui Shengyue, CEO of Geely, put it, "The transition to new energy has moved from the investment phase to the harvest phase."

In 2024, Geely underwent significant resource integration, delivering 2.1766 million new vehicles throughout the year, surpassing its annual sales target of 2 million units.

While the group is on the right track, it also faces the challenge of premium transformation. Zeekr Auto incurred a net loss of RMB 5.791 billion in 2024 and has yet to achieve profitability. With the integration of Zeekr and Lynk & Co, Geely embarks on a new journey towards high-end new energy vehicles.

Geely Silver Galaxy, Targeting Competitors

Of Geely's 2.1766 million vehicles sold in 2024, the cumulative sales of new energy vehicles across its three major brands amounted to 888,200 units, including 494,400 units of Geely Silver Galaxy, 222,100 units of Zeekr, and 168,000 units of Lynk & Co new energy vehicles.

Geely Silver Galaxy, officially upgraded to a brand in March this year, serves as the pillar of sales for Geely Group's new energy vehicles.

After integrating the Geometry series, the Geely Silver Galaxy brand achieved sales of 490,000 units in the previous year, a year-on-year increase of 80%. The success was mainly attributed to Geely's direct competition strategy.

As an established automaker, Geely has always boasted strong capabilities in technology and supply chains, but what it lacked was a blockbuster model.

Last year, Geely directly targeted BYD's blockbuster models and launched at least three models with lower prices and higher product capabilities.

For instance, the Geely Silver Galaxy E5 targets BYD's Yuan, with a starting price RMB 10,000 lower and a range of 440km/530km, slightly exceeding the Yuan's 430km/510km.

The Xingyuan model leverages the selling point of "Seagull price + Dolphin space" to directly challenge BYD's segment stronghold.

The latest Xingjian 7 precisely targets the Song family, with a starting price RMB 10,000 lower and a wheelbase extended by 43mm. Equipped with Geely's latest EM-i hybrid system, it has a fuel consumption of only 3.75L under low battery conditions.

These three new products hit the market and became instant hits. As of February this year, sales of both the Geely Silver Galaxy E5 and the Geely Xingyuan have surpassed the 100,000-unit mark, while sales of the Geely Xingjian 7 EM-i have exceeded 50,000 units.

Geely also stated that these three models have "greatly improved the profitability of new energy vehicles."

This year, Geely Silver Galaxy plans to launch five new models, aiming for sales of one million units. It is expected that in the fourth quarter, Geely Silver Galaxy will also introduce a fifth-generation super-alcohol electric hybrid product for C-end users that can run on alcohol, electricity, and gasoline.

Integration of "Binary Stars" in the High-End Market

In contrast, Geely's offensive in the high-end market has not been as smooth.

Carrying the group's high-end aspirations, Zeekr and Lynk & Co merged at the end of 2024 to form "Zeekr Technology Group," aiming to achieve annual sales of one million units within two years.

However, Zeekr is still incurring losses.

The financial report shows that Zeekr's revenue last year was RMB 75.913 billion, a year-on-year increase of 46.9%, of which automotive revenue was RMB 55.315 billion, a year-on-year increase of 63.1%; the overall loss for the year was RMB 5.791 billion, a year-on-year decrease of 29.9%.

Sales growth was the main driver of revenue increase and loss narrowing.

In 2024, Zeekr delivered a total of 222,100 new vehicles, a year-on-year increase of 87.2%. Thanks to the immediate delivery of the Zeekr 7X, its fourth-quarter deliveries hit a new high of 79,300 units.

The good news is that under Hong Kong Accounting Standards, excluding the impact of share-based payments, the Zeekr brand achieved a profit of RMB 214 million for the full year of 2024, potentially becoming the fastest-to-profit new energy vehicle company in Hong Kong stocks.

However, potentially affected by fierce market competition and post-holiday consumption weakness, Zeekr sold a cumulative total of 41,400 new vehicles from January to March this year, with a year-on-year growth rate of 25% that underperformed most mainstream new forces, and even saw a year-on-year decline of 4.7% in January.

Brands such as Xpeng, NIO, and Xiaomi are seizing market share through high cost-performance or intelligent labeling, while Zeekr's high-end models (such as the Zeekr 009 and Zeekr 9X) have a relatively limited audience due to their price range.

However, it should be noted that Zeekr's brand positioning in the high-end market and its global layout in over 60 international markets remain its differentiated advantages. With the密集 launch of new models such as the Zeekr 007 GT and Lynk & Co 900 in the second quarter, sales are expected to rebound.

For Zeekr, the brand still needs to expand outward.

This is where the benefits of merging with Lynk & Co become apparent.

Overseas, Lynk & Co's total shipments in 2024 exceeded 80,000 units. Geely claims that it has ranked first among Chinese brands with a single-car price above EUR 40,000 in the European market for three consecutive years, and its average single-car price of RMB 200,000 has surpassed mainstream joint venture brands such as Volkswagen and Toyota. It can be said that Lynk & Co has established a certain brand recognition overseas. Zeekr can leverage Lynk & Co to rapidly expand overseas sales channels.

Moreover, Geely has set a globalization target for Zeekr Technology Group by 2025. The two will establish a unified sales company in emerging markets outside Europe and plan to open over 200 stores overseas.

Domestically, according to An Conghui, the two brands will maintain independent sales channels in first- and second-tier cities, but in third-, fourth-, and fifth-tier cities, Lynk & Co and Zeekr can share channels and demonstrate synergies to expand the Zeekr Technology Group.

The financial report shows that Zeekr's selling, general, and administrative expenses in the fourth quarter of last year increased by 27.6% year-on-year to RMB 2.817 billion, up 23.8% quarter-on-quarter. Zeekr attributed this mainly to the expansion of offline sales channels both domestically and internationally and the launch of new models.

In terms of new models, Zeekr and Lynk & Co will add 3 and 2 models this year, respectively. Among them, the Zeekr 007 GT will be launched in the second quarter, followed by the super electric hybrid Zeekr 9X and a mid-to-large SUV in the third and fourth quarters, respectively; Lynk & Co will launch the Lynk & Co 900 in the second quarter, equipped with NVIDIA's Thor chip and the full-stack self-developed Haohan intelligent driving system; and a plug-in hybrid mid-to-large sedan will be launched in the second half of the year.

Another significant benefit of the integration of Zeekr and Lynk & Co is synergy and cost reduction. In addition to reducing R&D investment by 10%-20%, according to official estimates, joint procurement will reduce BOM costs by 5%-8%, increase capacity utilization by 3%-5%, and optimize functional support departments to reduce expenses by 10%-20%.

The main theme of the automotive industry in 2024 was competition and price wars, with cost control ability being the underlying factor. These "real" cost optimizations also support Geely's confidence in dealing with price wars. Zeekr's automotive gross profit margin increased by 0.6 percentage points to 15.6% against the trend in 2024.

Geely may be pioneering a scarce model that "requires both cost competitiveness and high-end product capabilities."

Breaking Through Premiumization

The automotive market is characterized by constant short-term battles, but the industry's depth and frontlines are long-term arenas spanning centuries.

Geely's path to premiumization still faces "three major mountains."

The first is the challenge of balancing technology investment and market demand. Although Geely has invested heavily in new energy technology (such as the self-developed GEA architecture), market feedback for some models has not met expectations. For example, some early models launched by Zeekr faced controversies over range and intelligent experience, leading to fluctuations in sales. Additionally, consumers' core anxieties about new energy vehicles, such as charging network coverage and after-sales maintenance costs, remain long-term issues that Geely needs to address.

The second is the fierce competition in the high-end market. In the market above RMB 300,000, Geely not only faces competition from Tesla and BYD but also from new forces such as AITO and Li Auto. For instance, AITO's M9 has topped sales in the market above RMB 500,000, while Zeekr's luxury models, such as the Zeekr 009, still need to consolidate their position through differentiated technologies such as ultra-fast charging.

Geely used to focus on mid-to-low-end fuel vehicles. Although it has reshaped its high-end image through Zeekr and Lynk & Co, some consumers still have the inherent perception that "Geely equals affordable." For example, when Lynk & Co started with fuel vehicles, its average single-car price was only RMB 100,000. Even after transitioning to new energy, its average price has increased to RMB 200,000, but it still needs to compete with traditional luxury brands such as BMW, Audi, and Mercedes-Benz for consumer preference.

Building a brand image is not an overnight task. Despite BYD and Chery, also Chinese brands, having stronger sales than Geely, all three face challenges when it comes to premiumization. They still rely on profits from mid-to-low-end products to nurture their developing high-end lines, and there is still a gap in earning high profits from a single vehicle compared to BMW, Audi, and Mercedes-Benz.

Currently, through the dual-brand strategy of Zeekr and Lynk & Co, Geely has made a breakthrough in the high-end new energy market, but technological iteration speed, consumer trust building, and globalization risks remain long-term challenges. If Geely can continue to focus on intelligentization popularization and localized production, it may rewrite the industry dilemma of "difficult premiumization" for Chinese automakers.