Europe’s automotive industry has been attacked by wannabees before, but the current assault planned by Chinese manufacturers is bigger in scale and ambition, as well as being almost entirely electric.
Previous successful incursions into Europe from Japan and then South Korea were gradual and initially focused on the cheap and cheerful end of the market. Value and huge warranties were the entry tickets. The Chinese threat is broader, deeper and possibly more deadly for the incumbents. It is not only aimed at the entry-level, but also the previously-unassailable German premium maestros.
When the internal combustion engine (ICE) was king, German technology and the brand power that went with it were on top. Now battery-electric looks set to dominate, and China has the technology lead and the manufacturing experience. The cost advantage over Europe is said to be about 20%. The only weakness would appear to be branding power. Will Europeans pay top dollar for an SUV or sedan with a weird made-up name nobody has ever heard of, even if the quality is top-notch?
Introducing Zeekr, the upmarket all-electric subsidiary of Chinese giant Geely Automobile Holdings. It thinks it can rewrite history and beat the Germans at their own game on its home, upmarket field. Its plans are ambitious, but details haven’t yet been revealed.
“We haven’t published volume targets yet, but our aim is to be on the podium by the end of the decade for premium electric vehicles in Europe,” said Zeekr Europe CEO Spiros Fotinos in an interview.
Podiums usually parade the top three finishers in the race, and in Europe that means BMW, Mercedes and VW’s Audi.
Fotinos joined Zeekr last September from Lexus Europe.
Sales will be spearheaded by the Zeekr X compact SUV and the 001 midsize sedan, firstly in Sweden and the Netherlands. The 001 has a claimed range of around 370 miles and the X about 275 miles. Sales will expand across Western Europe through 2026. No decision has been taken about selling in Britain’s right-hand drive market.
“Both of these cars have been tuned for Europe by our engineering team in Gothenburg,” he said.
Why would Europeans in general and Germans in particular buy a Zeekr?
“We will be announcing prices towards the end of June. But I think you’ll see we will have a very strong value proposition coming into the market with what is a very advanced vehicle. With that value proposition, we do aim to attract customers from the German three inevitably,” Fotinos said.
How will you counter the German’s massive brand power?
“I think the market has moved on and consumers have moved on from this traditional hierarchy of the brands. The move to electric vehicles will help us, but there is a certain friction in the process. We will eliminate that friction with the fantastic product proposition which we have,” Fotinos said.
“You also have to have a relationship directly with that consumer and as a pure EV player we are trying to solve their problems. We’re going through a direct-to-consumer business model, and by creating this kind of one-stop shop we will take care of home charging, your public charging and your maintenance package, your insurance, your financing, every aspect of the vehicle. You don’t need to worry about anything. It will be easier than anywhere else,” Fotinos said.
He said European buyers contemplating buying electric will find the step up from premium ICE prices to premium EV has become huge. Zeekr will be well-positioned to take advantage of that.
Estimates from Schmidt Automotive Research predict by 2030 Chinese electric vehicle sales will reach 1.2 million or 9% of the Western European BEV market. A recent report from Allianz Trade said Chinese-built BEVs could cost European automakers €7 billion a year in lost profits by 2030 unless the EU takes action either to raise tariffs, boost battery and other technology, or persuade China to build cars in Europe.
Do you expect any retaliatory action from the European Union?
“Tariffs are always a complicated question. At the end of the day what European consumers are asking for is a more sustainable solution for mobility. And that’s what we are bringing to the table. So I can’t predict right now if the tariffs (currently 10%) are going to move up or down. We are looking at this of course, constantly. But I think everybody’s looking to push for a more sustainable solution. That’s what we’re doing,” Fotinos said.
Zeekr is looking at the possibilities of selling in the U.S. but hasn’t decided yet. Where did the name Zeekr come from?
“It’s a combination of certain elements that the brand represents. There’s zero, meaning zero emissions in getting to carbon neutrality, E for electrification, and KR is the chemical element Krypton. Krypton is rather passive until you add some energy to it, then it kind of changes and brightens up,” Fotinos said.
Zeekr plans to end up smiling brightly, but BMW, Audi and Mercedes will have other ideas. Not to mention fellow upmarket upstart Hyundai of Korea’s Genesis, which has a game plan eerily similar to Zeekr’s.
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