Every April, the world’s top automotive executives and engineers fly to China’s main auto show to take stock of BYD, the electric car powerhouse that surpassed Tesla in global sales last year.
But at the Auto China event now taking place in Beijing, another name catches the eye: Zhejiang Geely Holding Group. In an unexpected development, Geely surpassed BYD in sales in the first two months of the year and is rapidly expanding its range. Geely is now making headway overseas, more than doubling exports to Europe, the Middle East and elsewhere over the past year and taking on global rivals on its own turf.
Geely is rising at a crucial time. The war in Iran has sent gasoline prices soaring, reviving consumer demand for electric vehicles, a segment dominated by Chinese automakers. After years of laying the groundwork to expand exports and escape a ruthless domestic market, Chinese brands appear poised to capitalize and shift the balance of power in the global auto industry.
Geely has created a business model designed to manage volatility. It is one of the few automakers that can compete in all four major powertrains: gasoline, gasoline-electric hybrids, plug-in hybrids and all-electric. That width allows it to change quickly as conditions change.
When the Chinese government let government tax subsidies for electric cars expire this year and demand fell, Geely responded by leaning on its gasoline models. Then, when the war in Iran drove up gasoline prices last month, Geely resumed its push for plug-in hybrids and electric cars.
With China’s economy also slowing, sales of plug-in hybrid and electric cars in China fell 14 percent in the first 19 days of April from the same period last year. But sales of gasoline cars plummeted almost 40 percent.
Geely’s versatility “has become a clear competitive advantage,” said David Zhang, dean of vehicle technology research at the Jiangxi Institute of New Energy Technology.
With prices at the pump rising everywhere, Geely said this month it was converting all of its remaining gasoline vehicles to gasoline-electric hybrids.
“Each of their vehicles will be really fuel efficient; that will be another advantage,” said Yale Zhang, managing director of Automotive Foresight, a Shanghai consulting firm.
Zhejiang Geely, privately owned by its founder and chairman, Li Shufu, 62, controls a vast network of automakers. It discloses little financial information, but has set a goal of generating 30 percent of its sales outside China by 2030.
Shares of Zhejiang Geely’s largest unit, Geely Automobile Holdings, are listed in Hong Kong. It sold three million cars last year, up 39 percent from the previous year. Revenue rose 25 percent as a price war in China drove down vehicle prices.
Geely began manufacturing cars in 1998, when it began supplying taxis to Chinese fleets. In less than three decades, Zhejiang Geely has become a global automaker whose sales now approach those of the 123-year-old Ford Motor Company.
Mr. Li’s path was equally improbable. As a teenager, he used the money set aside for college to buy a camera and start a small business photographing tourists. He then went on to make components for refrigerators, motorcycles and cars before building complete vehicles in Taizhou, his hometown in the coastal province of Zhejiang.
In 2006, Geely was selling budget subcompacts for first-time buyers with simple, low-cost designs that seemed markedly utilitarian by Western standards.
That didn’t stop Mr. Li’s global ambitions. In a 2006 interview, he urged Ford to sell Jaguar or Volvo (two of the American automaker’s many brands at the time) to Geely. The idea seemed far-fetched, but after Ford ran into difficulties during the global financial crisis, Li took out a large loan to buy Volvo, a Swedish brand, in 2010. Zhejiang Geely has since revived Volvo.
From the beginning, Mr. Li focused on mastering automotive technology. In 2006 he expressed admiration for German automakers DaimlerChrysler and BMW, then leaders in hybrid car technology, but was determined not to rely on others. Geely would have to build its own technology “from scratch.”
Coming full circle, it paid $9 billion in 2018 to acquire a 9.69 percent stake in Daimler, which has repeatedly changed its name and is now known as Mercedes-Benz Group.
Geely has created a broad portfolio of national and international brands. It acquired the London Taxi Company, which makes London’s iconic taxis, in 2013. It bought a 51 percent stake in British sports car maker Lotus in 2017 along with a 49.9 percent stake in Proton, a Malaysian carmaker. For electric vehicles, it has created brands such as Polestar, a subsidiary of Volvo, and Zeekr, a premium offering with lots of technology and cars priced up to $132,000.
While it moves much of its production to China, Geely maintains design studios and factories in Europe, and opened a Volvo factory in South Carolina. This has helped Geely circumvent trade barriers in Western markets.
Geely still faces two big challenges, said Michael Dunne, a long-time consultant on China’s auto industry. Its portfolio of brands requires high sales to remain profitable. At the same time, state-owned automakers in China are dragging down the industry, fueling endless price wars and expanding capacity with the backing of local governments and state banks.
“Profits have disappeared” for auto sales within China, Dunne said. Geely remains profitable as a private company largely thanks to its exports. But throughout the Chinese auto industry, he added, “state-owned companies are the ones to bet” on being the last ones standing.
Geely’s main competitor at home and abroad is BYD, which has grown by saturating the Chinese market with low-cost electric and plug-in hybrid cars. Many of their models cost less than $15,000. The price war in China has been particularly severe for subcompact plug-in hybrid cars, BYD’s core segment. BYD’s profits fell sharply last year.
Along with state-controlled automakers SAIC Motor and Chery, BYD and Geely are leading a surge of Chinese cars into the global market. China exported about a million cars a year between 2012 and 2020. That number jumped to 7.1 million last year and is on track to hit 10 million this year, nearly as many cars as the United States makes annually.
With tariffs locking them out of the U.S. market, Chinese automakers are focusing on Europe, Southeast Asia, Australia, Latin America and Africa.
To compete in these markets, Geely is betting on technology. Consider its newly launched Zeekr 8X sport utility vehicle.
With the push of a button, the shades raise along the windows and sunroof, turning the rear seats into a private movie theater with in-seat speakers. When an owner stands in front and makes a gesture, the car can pull itself out of a tight parking space. The vehicle also includes a variety of advanced autonomous driving features and starts at $47,000.
Geely said Zeekr planned to begin overseas sales of the vehicle in the second half of the year. Like many export models from Chinese automakers, the Zeekr 8X is a plug-in hybrid that combines a large battery with a backup gasoline engine.
These vehicles were originally produced to address the “range anxiety” of all-electric vehicles, the fear that drivers would run out of power before finding a charger.
That concern has eased at home as China’s state-owned power grid companies have added more charging infrastructure across the country. Because plug-in hybrids carry the additional cost of a gasoline engine, demand in China is shifting toward all-electric cars.
Instead, automakers including Geely and BYD are redirecting plug-in hybrids to overseas markets, where charging infrastructure is less developed.
Europe has become a privileged destination. The European Union imposed steep anti-subsidy tariffs on Chinese electric vehicles at the end of 2024, but exempted plug-in hybrids, which were still a small segment when the policy was drafted. Imports have increased since then.
Speaking last month in Sweden, Li said geopolitical tensions were reshaping the industry and the Geely group would become more reliant on Volvo’s European factories. “Globalization has come to an end, while we see the trend towards economic regionalization,” he said.
Ruoxin Zhang contributed to the research.
