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Geely Automobile Holdings: How a Refrigerator Parts Maker Became a Global Automotive Empire
I. Introduction & Episode Roadmap
In the rarefied air of global automotive supremacy, a peculiar transformation has unfolded over the past three decades. As of 2023, Zhejiang Geely Holding Group ranks 225 in the Fortune Global 500 list of the world's largest companies. In 2024, the group produced a total of 3.33 million vehicles globally, including 1.48 million plug-in electric vehicles.
The central mystery of this story is almost absurd in its improbability: How did a Chinese refrigerator parts maker, founded by a farmer's son with borrowed money, become the owner of Volvo, the largest shareholder in Mercedes-Benz, and one of the world's most consequential automotive conglomerates?
Li Shufu is often called the "Chinese Henry Ford," as both came from poor environments and built global automakers from nothing. And by poor environment, we mean genuinely poor—not that their fathers owned emerald mines. The comparison is apt not just for its romantic narrative quality but for what it reveals about the nature of industrial disruption. Ford democratized the automobile for American consumers in the early twentieth century. Li Shufu is attempting something arguably more audacious: democratizing Chinese automotive ambition on a global stage while acquiring and revitalizing some of the Western world's most storied brands.
This story operates on multiple thematic levels that deserve attention. First, there's the audacious acquisition strategy—the willingness to pursue deals that seasoned observers deemed impossible, foolish, or both. Second, there's the sophisticated approach to technology transfer—how Geely extracted maximum value from its acquisitions without destroying the very things that made them valuable. Third, there's the platform strategy that has enabled Geely to achieve economies of scale across its sprawling brand portfolio. And finally, there's the uniquely Chinese private enterprise journey—navigating a system designed to favor state-owned champions while building something that ultimately transcended those constraints.
What makes this narrative unique in the annals of automotive history is that Geely was the first privately-owned Chinese automaker. While Beijing's state-owned giants enjoyed government backing and joint venture arrangements with foreign partners, Li Shufu built his enterprise from scratch, initially without the blessing of Chinese regulators who viewed private car manufacturing with deep suspicion.
On March 20, 2025, Geely Automobile Holdings unveiled its 2024 financial results, marking a significant milestone as the company's total revenue surpassed 240 billion RMB for the first time in its history. Total revenue reached 240.2 billion yuan ($33.2 billion), a 34 percent year-on-year increase. Net profit attributable to shareholders surged 213% over the previous year to 16.6 billion yuan.
These numbers represent the culmination of a journey that began in 1986 with refrigerator components and evolved through motorcycles, cheap knockoff sedans, and eventually the ownership of some of Europe's most prestigious automotive marques. The question for investors today is whether this remarkable trajectory can continue—and what risks lurk beneath the surface of this sprawling empire.
II. Origins: Li Shufu & The Entrepreneurial Journey (1963–1997)
The Founder's Story
Picture Taizhou, Zhejiang Province, in the early 1980s. The region sits just south of Shanghai, but a world away from the gleaming financial towers that would eventually dominate that city's skyline. This was agricultural China, where opportunity was measured in harvests and horizons rarely extended beyond provincial borders.
Born on June 25, 1963, in Taizhou, Li Shufu grew up in a modest farming family. His early experiences in a rural setting instilled in him a strong work ethic and an entrepreneurial spirit. Li was born in June 1963 in Taizhou, Zhejiang province. At age 19, he used 100 yuan ($16) his father had given him to buy a camera and start a photography business taking photos of tourists. Later, he set up his own studio to sell handmade camera accessories.
This was classic bootstrap entrepreneurship in its rawest form—the kind of scrappy resourcefulness that characterized China's first generation of private business owners after Deng Xiaoping's economic reforms began opening new possibilities for individual enterprise. Li wasn't building a business according to some grand strategic plan; he was surviving, adapting, and learning.
Li Shufu started out as a photographer in the early 1980s, but a failure to win state approval forced him to close his business. He then dabbled in electronic waste recycling, manufacturing refrigerator parts and magnesium-aluminum decorative panels used in construction.
The pattern that emerges from Li's early career is revealing: he was relentlessly opportunistic, willing to pivot when circumstances demanded, and possessed an uncanny ability to identify markets where demand outstripped supply. The billionaire graduated from Yanshan University with a master's degree in engineering. This technical foundation would prove essential as his ambitions evolved beyond simple trading and manufacturing.
Serial Entrepreneurship Before Automobiles
Geely was founded in 1986 as a refrigerator parts company, before transitioning to motorcycles in 1994 and entering the automotive industry in 1997. The progression wasn't accidental—each pivot represented a logical extension of manufacturing capabilities and market understanding.
In 1991, Li Shufu and his brother Li Xubing had a factory to produce aluminum magnesium decoration boards. This factory still existed under the Geely Group. The decorative materials business provided cash flow and manufacturing experience, but Li's ambitions were expanding beyond building materials.
Eventually, Li saw a great opportunity in producing mopeds as an affordable mode of private transport. He began to research the design and manufacturing aspects, founding his fifth business, Geely, in 1994, the first company in mainland China to produce mopeds and later motorcycles. The brand took off, sparking a decade of strong demand. However, while Geely was able to ride the wave of this demand, its competitors soon caught up.
Geely expanded rapidly in the years that followed, selling more than 600,000 motorcycles and 150,000 cars by 2000. The motorcycle business demonstrated that Li could scale a manufacturing operation, manage supply chains, and build dealer networks. But it also revealed the limitations of competing purely on price in a market where barriers to entry were low.
The Audacious Move into Automobiles
In 1993 the idea of making cars came up. What followed was one of the most audacious bets in Chinese industrial history—a private entrepreneur, with no automotive experience and no government backing, deciding to build cars in a country where automobile manufacturing was considered the exclusive domain of state-owned enterprises.
Li Shufu loved Mercedes and wanted to make his own "Chinese Mercedes." He bought and took apart a Mercedes and went to FAW to buy a Hongqi platform, engine and gearbox. As the Benz E-class and Hongqi's sizing were about the same in terms of platform and body size, Li created his first Geely vehicle, named the Geely Yi Hao or Geely Number One.
The very first car made by Geely was completed in 1996, called the "Geely Number 01." It was a clone of a Mercedes-Benz E-Class (W210) with a chassis taken from a Hongqi CA7200, which in turn is based on the Audi 100. The prototype was conceived from Li Shufu's frustration over China's lack of a luxury carmaker.
He took his new car downtown Taizhou, received loud applause in the streets and took a series of adverts in the Taizhou Daily News. People called for info and prices. Li really wanted to make a luxury car but quickly found that technology requirements were beyond his limited capacity. So he decided to make small cheap cars that everyday men could afford.
This pivot from luxury aspirations to affordable reality reveals a pragmatism that would characterize Geely's strategy for decades. Li understood that building a Chinese Mercedes was a dream; building cheap cars that Chinese consumers could actually afford was a business.
By 1997, the company had completed the construction of relevant factories and initial investment preparations to enter the automobile industry. This made Geely the first private automobile company in China, whereas other carmakers are state-owned enterprises such as Chery.
The significance of this cannot be overstated. In 1997, the Chinese government did not want private citizens making cars. The automobile industry was considered strategically important, and officials believed it should be developed through joint ventures between state-owned enterprises and foreign partners—not by former refrigerator parts makers from Zhejiang Province.
III. The Scrappy Beginnings: Building a Car Company Without Permission (1997–2005)
First Car & The Licensing Drama
Geely's first car, the Geely Haoqing, rolled off the assembly line in Linhai, Zhejiang on August 8, 1998. The Haoqing is similar to the small Japanese car Daihatsu Charade and is powered by a Daihatsu three-cylinder engine.
The date is significant not just for what it represents—China's first privately manufactured automobile—but for what happened next: nothing. Geely did not obtain its national production license until November 9, 2001, which delayed mass production until 2002.
For more than three years, Geely operated in a regulatory gray zone, producing cars it technically wasn't authorized to sell. This required creative workarounds that have become legendary in Chinese automotive circles.
To avoid problems with the government, Li approached a local partner in Deyang, Sichuan, which had already established a car factory as part of its operations. With a 7% capital injection, he was able to obtain the necessary license. Li got a factory in Taizhou but he lacked a license to produce automobiles. He heard that the Deyang Prison Vehicle Factory in Sichuan province was out of business but it still held its license. The truck factory of the Deyang Prison was officially named Deyang No.95 Factory.
Yes, you read that correctly. Li Shufu's path to automotive legitimacy ran through a defunct prison truck factory. This was regulatory arbitrage at its most creative—and it worked.
This tiny team built its first car by hand. The early Haoqings were crude by any standard, but they were cheap. In a market where foreign joint venture products were priced beyond the reach of ordinary consumers, Geely offered something different: automobile ownership for the masses.
When being criticized for lack of experience, Li dismissed those voices, saying his famous words, "Making a car is not hard. It is just four wheels and two couches." This quotation has followed Li throughout his career, sometimes cited as evidence of his bold confidence, sometimes as evidence of his naivety. In retrospect, it was probably both.
The WTO Turning Point
The turning point came in 2001 when China joined the World Trade Organization (WTO), a relationship that promised to open up the country's industries to the global market. China included Geely as the first private automotive manufacturer on the list it submitted to the WTO, enabling it to sell its cars nationally.
This was a masterstroke of timing and lobbying. As China negotiated its WTO accession, it needed to demonstrate that its automotive sector wasn't merely a collection of state-owned dinosaurs dependent on joint venture technology transfers. Geely—scrappy, innovative, and genuinely private—provided the perfect proof point.
By 2002, the brand was ranked among the top ten in the Chinese automobile market. From regulatory pariah to top-ten status in roughly four years: this was the kind of explosive growth that only a market as large and underserved as China could produce.
Corporate Restructuring & Hong Kong Listing
In 2002, Geely shifted from being a family-operated entity to a joint-stock company managed by professional management. Zhejiang Geely Holding Group Co., Ltd. (ZGH) was established on March 24, 2003. ZGH was established with a registered capital of CNÂĄ930 million.
This restructuring was essential for the next phase of growth. Family-run operations can move quickly and make bold decisions, but they struggle to raise capital and attract talent at scale. The holding company structure created a framework for the sprawling empire that would eventually emerge.
In January 2004, Li Shufu bought controlling shares in Guorun Holdings Co., Ltd., a company listed on the Hong Kong Stock Exchange under the trading code 0175HK. In January 2004, Li Shufu bought controlling shares in Guorun, and in March 2004, the company was renamed Geely Automobile Holdings Limited. This strategy was seen as a "backdoor" entry into the Hong Kong stock market, providing a means for the company to raise funds.
The Hong Kong listing was crucial. It provided access to international capital markets, established credibility with foreign partners and investors, and created a currency (publicly traded shares) that could be used for future acquisitions. The backdoor approach—acquiring an existing listed shell rather than conducting a traditional IPO—was faster and less scrutinized, though it raised eyebrows among governance purists.
Early International Ambitions
In 2005 the company was the first privately owned Chinese auto manufacturer to be invited to the Frankfurt Auto Show. This invitation represented a significant symbolic milestone—Geely was no longer just a domestic curiosity but a company that merited attention on the world stage.
By 2005 vehicle sales had reached 143,279, representing growth of 46% on the previous year. The numbers were impressive, but they masked a fundamental challenge: Geely's cars were cheap, but they were also of questionable quality. Building market share through low prices was one thing; building a sustainable brand was quite another.
Li has criticized the automotive industry joint venture system in China as producing large profits for foreign original equipment manufacturers (OEMs) and Tier 1 suppliers at the expense of innovation, quality, and technology advancement by Chinese automotive OEMs.
This criticism wasn't merely rhetorical—it was the philosophical foundation for everything Geely would do next. Li believed that China's approach to automotive development, which relied on foreign joint venture partners, was fundamentally flawed. It enriched foreign companies while leaving Chinese firms dependent on imported technology. His alternative vision was radical: acquire the technology directly by buying the foreign companies themselves.
IV. INFLECTION POINT #1: The Volvo Acquisition — A $1.8 Billion Bet (2007–2010)
The Quest for Volvo Begins
In 2002, Li Shufu mentioned he wanted to acquire Swedish Volvo from Ford at Geely's internal meeting for the first time. In 2007, Geely sent an official letter to Ford expressing a wish to acquire Volvo.
However, it was ignored and never replied to, as Geely was not taken seriously then. It was a harsh reality check for an ambitious Chinese entrepreneur. Wicked tongues even say managers at Dearborn had lots of laughs about it, but it is more likely they didn't even notice, as Li Shufu sent his proposal through a PR agency. Yes, he used a PR agency to contact Ford's HQ.
The image is almost comical: a Chinese company that had been making cars for less than a decade, still struggling with quality issues, proposing to acquire one of Europe's most storied automotive brands from the world's second-largest automaker. Ford's indifference was entirely predictable.
But Li persisted. But Eric stayed persistent. In 2008, he managed to get a meeting with Ford's CFO at the Detroit Auto Show. The meeting went poorly. Ford remained unimpressed by the small Chinese automaker and responded with the classic corporate brush-off: "We will let you know."
The Financial Crisis Changes Everything
What followed was a case study in how macroeconomic upheaval can create opportunities for the prepared mind. Following continuing losses in that year, Ford Motor Company offered Volvo Cars for sale in December 2008.
Then, in 2009, Li Shufu, in full armor and side by side with Yu Liping, Rothschild's China President, revisited Ford's booth during another Detroit Auto Show, expressing their persistent wish to buy the North European automaker. And things were different then—Ford's CEO promised to notify Geely if they decided to sell Volvo. And the timing couldn't be better. Ford started to feel the total pressure of the 2008 financial crisis as the cash pile they sat on grew thinner, and the global auto market situation wasn't much better. They decided to sell Volvo, and as Li Shufu had the team ready, the whole process went incredibly fast.
The involvement of Rothschild was significant. By partnering with one of the world's most prestigious financial advisory firms, Geely signaled that it was a serious buyer with sophisticated backing. The days of sending acquisition proposals through PR agencies were over.
Despite these setbacks, the Volvo brand remained PAG's most valuable. Merrill Lynch estimated that selling Volvo would bring in $7 billion to $8 billion for Ford. This attracted the interest of many other rival automakers, among them BMW.
The Deal Structure & Financing
On October 28, 2009, Ford confirmed that, after considering several offers, the preferred buyer of Volvo Cars was ZGH. On December 23, 2009, Ford confirmed the terms of the sale to ZGH had been settled.
A definitive agreement was signed on March 28, 2010 for US$1.8 billion. The price was a fraction of what Ford had paid for Volvo in 1999 ($6.5 billion) and well below the $7-8 billion that analysts had estimated the brand might fetch. The financial crisis had produced a once-in-a-generation buying opportunity.
As announced on the signing of the stock purchase agreement on March 28, 2010, Geely agreed to pay USD 1.8 billion for Volvo Cars, which included a USD 200 million note with the balance paid in cash. Geely issued the note and paid USD 1.3 billion in cash for Volvo Cars, utilizing financing from Chinese institutions and its own balance sheet as well as international capital market resources.
The financing structure revealed the complexity of the deal. Geely's sources of financing for the acquisition were extensive. Firstly, Geely leveraged government power and received policy support, with Shanghai Jiaerva Investment Co Ltd and Daqing State-owned Assets Management Co Ltd providing Geely with RMB 1 billion and RMB 3 billion in cash respectively in 2010.
The Hangzhou-based company paid Ford $1.8 billion ($1.6 billion for a 100% equity stake and $200 million for a credit note), and raised $900 million to keep Volvo running, which took the total tab to $2.7 billion. This wasn't just an acquisition price—it was an investment in Volvo's future.
The Historic Close
The deal closed on August 2, 2010 with Geely paying $1.3 billion cash and a $200 million note. At the time of the purchase, it was the largest overseas acquisition by a Chinese automaker.
Zhejiang Geely Holding Group, one of the fastest-growing car manufacturers in China, announced it had completed the acquisition of 100 percent of Volvo Car Corporation from Ford Motor Company.
Li Shufu said: "This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars. This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design as it strengthens the existing European and North American markets and expands its presence in China and other emerging markets."
The IP Negotiation & Strategic Vision
The intellectual property negotiations were perhaps the most critical and least understood aspect of the deal. Li Shufu later told media: "IP negotiation was a very tough part. Now that we paid such an enormous amount, we wanted a world-leading company with a solid IP basis. Otherwise, what we got would be just a wet noodle."
Under the new ownership, Volvo Cars will retain its headquarters and manufacturing presence in Sweden and Belgium; and its management will have the autonomy to execute on its business plan under the strategic direction of the board.
This commitment to operational independence was crucial. Li understood that Volvo's value lay not just in its brand and intellectual property but in its people, culture, and engineering capabilities. A heavy-handed Chinese owner who sought to micromanage operations would destroy exactly what made the acquisition valuable.
In March 2010, Zhejiang Geely Holding Group, controlled by Li Shufu, agreed to acquire Volvo Cars from Ford Motor Company for $1.8 billion, with the deal completing on August 2, 2010, marking China's largest overseas automotive purchase at the time. Geely committed to maintaining Volvo's Swedish headquarters, R&D centers, and workforce, avoiding the plant closures Ford had considered, while integrating cost-efficient Chinese supply chains to bolster Volvo's competitiveness.
V. Post-Volvo Transformation: Technology Transfer & Platform Strategy (2010–2016)
Volvo's Remarkable Turnaround
A big step toward Geely's internationalization was its acquisition of Volvo Car Corporation in 2010. The acquisition prompted the largest profits and most intense technology transfer in Geely's history.
The turnaround was swift and stunning. Volvo not only increased its global market by 20%, but also increased its share of the Chinese market by 36%. Volvo made a profit in 2010—for the first time since 2005.
The Swedish manufacturer has almost doubled production since the Chinese company took over in 2010. The last year with Ford as owner, Volvo Cars lost SEK 5 billion, compared with the company earning 10 billion during the first three quarters of 2017 alone.
What explained this transformation? Several factors converged. First, Geely provided capital that Ford, struggling with its own survival, had been unable or unwilling to invest. Second, Geely opened the Chinese market—the world's largest—to Volvo in ways that Ford's joint venture structure had prevented. Third, and perhaps most importantly, Geely gave Volvo's engineers the freedom and resources to develop new products.
Over the course of a decade, Geely invested more than $11 billion, financing a modernization of the company's model line-up, an early shift into electric vehicles, and factories in China that helped Volvo cash in on Chinese middle-class consumers' surging appetite for Volvo vehicles.
Post-acquisition, Volvo's global sales doubled to over 700,000 units by 2019, achieving consistent profitability through investments in electric vehicles and shared platforms with Geely, such as the Compact Modular Architecture, which reduced development costs without compromising Volvo's premium positioning.
The CMA Platform — Synergy in Action
Both companies jointly developed engines and platforms, notably the Compact Modular Architecture platform that is used by Volvo, Geely and Lynk & Co vehicles. Improving technical expertise and a sophisticated production management system led to a significant sales surge for Geely from 2010 onwards.
The Compact Modular Architecture (CMA) represented the strategic vision made real. Rather than simply extracting technology from Volvo to improve Geely vehicles—which would have diluted Volvo's premium positioning—the companies created shared platforms that could serve both brands while maintaining distinct market positions.
This was platform strategy executed at the highest level. By sharing development costs across multiple brands and millions of vehicles, Geely could afford R&D investments that would be impossible for either company individually. The result was vehicles that competed effectively across price points while maintaining the engineering excellence that defined the Volvo brand.
Lynk & Co — The Bridge Brand
In October 2016, Geely Auto released its new brand called Lynk & Co in Berlin, Germany, which is intended to bridge the gap between Geely and Volvo brands. The brand was launched with three production models, all based on the Compact Modular Architecture (CMA).
In August 2017, ZGH, Geely Automobile Holdings and Volvo Car Group signed an agreement at Geely Auto's Hangzhou Bay R&D Center to establish the Lynk & Co joint venture.
Lynk & Co was a bold experiment in automotive marketing. The brand adopted innovative sales models including direct-to-consumer sales and subscription services—approaches that established automakers were only beginning to explore. It was positioned to attract younger, more tech-savvy consumers who might not connect with either Geely's budget image or Volvo's premium positioning.
The Volvo acquisition had transformed Geely from a Chinese car company into something far more ambitious: a multi-brand global automotive group with shared platforms, diversified market positioning, and the engineering capabilities to compete at every level of the market.
VI. INFLECTION POINT #2: The Acquisition Spree — From Lotus to Daimler (2017–2018)
Building a Global Portfolio
The year 2017 marked the beginning of an acquisition spree that would establish Geely as one of the most aggressive strategic investors in global automotive history.
ZGH purchased a 49.9% stake in Proton Holdings, which was agreed on June 23, 2017 and finalized on September 29, 2017. The purchase was seen to facilitate future export growth in right-hand drive markets, and making inroads into the lucrative ASEAN region.
Chinese automaker Zhejiang Geely Holding Group agreed on Friday to purchase stakes of 49.9% in Proton Holdings of Malaysia and 51% in Lotus of the U.K., both owned by Malaysian automotive group DRB-Hicom, for a total of $235 million.
In May 2017, ZGH purchased a 51% controlling-stake in Lotus Cars from its owner, DRB-HICOM, the largest shareholder of Malaysian carmaker Proton Holdings. The remaining 49% were acquired by Etika Automotive, a holding company of Proton's major shareholder Syed Mokhtar Albukhary. Proton had owned Lotus since 1996, and largely struggled to turn the fortunes of the sports carmaker around.
The logic behind these acquisitions was elegant. Proton provided manufacturing capacity and distribution networks in Southeast Asia—a region where right-hand-drive vehicles dominate and where Chinese brands had struggled to gain traction. Lotus added prestige and engineering expertise in lightweight construction and performance vehicles.
That represents another big jump from the $235 million Geely paid for its 51% stake in all of Lotus, as well as 49.9% of Malaysian automaker Proton back in 2017. Of course, we should also note that Geely pumped $3 billion of its own funds into Lotus to revive the brand, including $1.3 billion for a new factory in the Central China city of Wuhan.
Zhejiang Geely Holding Group, China's leading privately-owned automotive group, announced it had reached agreement with Cevian Capital, Europe's largest activist fund manager, to acquire its entire 8.2% share capital holding and 15.6% voting rights in AB Volvo, the leading Swedish manufacturer of trucks, buses, construction equipment, diesel engines, and marine and industrial engines.
The deal is valued at about 3.25 billion euros ($3.9 billion), marking yet another major European automotive investment.
The Shocking Daimler Stake
The billionaire founder of Zhejiang Geely Holding Group Co. accumulated a stake worth about 7.3 billion euros ($9 billion) in Daimler AG, marking the biggest investment in a global automobile manufacturer by a Chinese company.
Li Shufu, the billionaire chairman of privately-owned Chinese automaker Zhejiang Geely Holding Group Co. Ltd., acquired a 9.69% stake in Daimler AG, owner of the Mercedes-Benz brand, becoming the German company's largest single shareholder.
The Daimler investment was stunning for several reasons. The size ($9 billion) dwarfed any previous Chinese automotive investment. The target (Mercedes-Benz, the inventor of the automobile) carried enormous symbolic weight. And the approach—secretly accumulating shares without prior consultation with management—broke with the consensual style that had characterized previous Chinese investments in European companies.
In November, Geely asked Daimler to issue new shares so it could buy a stake, but the German company turned down the offer saying it did not want to dilute existing shareholders. Li changed tactics, and quietly amassed a stake of 9.69 percent worth $9 billion at Daimler's current share price.
The Strategic Rationale
The company workforce is made of over 80,000 employees and its biggest portion is employed at Geely Auto, pursuing the objective of making the company one of the top 10 world-leading automotive groups. From Li's standpoint, this deal represents the starting point of a long-term commitment which aims at improving and speeding up integration in the electric cars market. The Chairman said: "I am particularly pleased to accompany Daimler on its way to becoming the world's leading electro-mobility provider."
The stake purchase reflected Li's conviction that the automotive industry was entering a period of profound transformation—driven by electrification, autonomous driving, and connectivity—that would favor companies with scale and technological depth. By becoming Daimler's largest shareholder, Geely positioned itself to participate in that transformation as a partner rather than a competitor.
Only two or three manufacturers will likely survive in the auto industry going forward, a source familiar with Li's thinking told Reuters, prompting Geely to seek access to carmakers with a technological edge.
Sophisticated Financial Engineering
Chinese billionaire Li Shufu's Geely Group structured the purchase of its 7.3 billion-euro ($9 billion) stake in Daimler AG through complex derivative transactions that allowed the buyer to build a large equity holding while limiting the risks.
The collar trade structure was significant. By using derivatives rather than direct share purchases, Geely could accumulate a large position without triggering disclosure requirements or moving the market against itself. The sophisticated financial engineering demonstrated that Geely had evolved far beyond its scrappy origins—this was deal-making at the highest level of global finance.
VII. INFLECTION POINT #3: The SEA Platform & EV Transformation (2020–Present)
Building the Electric Future
Geely Holding Group, under Li Shufu's leadership, committed substantial resources to electric vehicle (EV) development, exemplified by the Sustainable Experience Architecture (SEA) platform introduced in 2020 as an open-source EV architecture designed for scalability across models. This platform supports pure-electric vehicles with modular designs for battery integration and autonomous driving capabilities, enabling Geely to adapt to global electrification trends by reducing development costs through shared components.
The Sustainable Experience Architecture (SEA) platform is a modular electric vehicle platform developed by Zeekr Technology Europe, a company based in Gothenburg, Sweden within Geely Automobile Holdings group of companies. The platform is used in Geely Holding portfolio brands along with the Smart joint venture with Mercedes-Benz Group. Geely refers the SEA platform as "open-source," meaning the manufacturer is open to supply the platform to other automakers.
The SEA platform represented Geely's bet on the electric future. Rather than developing proprietary technology that would serve only Geely vehicles, the company created an architecture that could be licensed to other automakers—generating revenue while establishing Geely's technology as an industry standard.
The SEA platform is more of an architecture that unifies multiple platforms covering almost all vehicle types. The platform consists of several different core versions covering a variety of market segments with different marketing names.
Zeekr — The Premium EV Brand
Zeekr was founded in 2021 as a single brand specializing in luxury electric cars. Zeekr was founded in March 2021 as a premium electric mobility brand for battery-powered vehicles by the Geely Group to compete against Nio and Tesla.
The offer price was USD 21 per ADS, taking the total funds raised in this offering to USD 441 million. The company's market cap reached nearly USD 7 billion by the end of its first trading day, with a 34.57% jump from its offer price.
Zeekr's initial share pricing made it the biggest U.S. IPO for a Chinese company since 2021.
Zeekr represented Geely's most ambitious EV bet—a premium brand positioned to compete directly with Tesla and Chinese rivals like Nio. The NYSE IPO provided validation and capital, though subsequent performance has been more volatile.
Despite 2024 revenues of ÂĄ75.9 billion and 220,000 unit sales, Zeekr's market performance disappointed investors. From its 34% IPO pop to current undervaluation and ÂĄ5.79 billion 2024 net loss, this "damage control" move reflects Chinese EV makers' strategic crossroads.
In a significant strategic move, in July 2025, Geely Holding Group announced that its subsidiary Geely Auto had officially signed a merger agreement with Zeekr. Geely Auto would acquire all remaining Zeekr shares it does not already own, making Zeekr a wholly owned subsidiary of Geely Auto.
The Waymo Partnership
Waymo has started testing on public roads in San Francisco a new robotaxi built by Chinese electric automaker Zeekr. Waymo has "less than a handful" of the Zeekr vehicles in San Francisco today and isn't driving them autonomously yet. Still, the fact that Waymo has hit the roads with a roomier, custom-built robotaxi signals the next phase of the Alphabet-owned company's autonomous vehicle technology journey.
Waymo first announced plans to build an electric autonomous ride-hail vehicle with Zeekr for the U.S. market in December 2021.
The new robotaxi is built on Zeekr's SEA (Sustainable Experience Architecture) platform and has been designed to prioritize passenger comfort while reducing costs. The vehicle is equipped with Waymo's latest autonomous driving technology.
The Waymo partnership demonstrated that Geely's EV platforms had achieved the quality and sophistication required by the world's leading autonomous driving company. This was validation on a different level—not consumer preference, but engineering excellence judged by one of technology's most demanding customers.
Zeekr plans to start series production of the Zeekr RT, a version of the Zeekr Mix customized by Waymo, this year. The Zeekr RT will utilize the sixth generation of robotaxi technology called 'Waymo Driver', which was presented in the summer.
VIII. The Smart Joint Venture & Mercedes Partnership
The Daimler stake opened doors that pure competition never could. Smart Automobile Co., Ltd. is a joint venture established by Mercedes-Benz AG and Zhejiang Geely Holding Group in 2019 and aimed at producing Smart-badged cars in China to be marketed globally. The venture is headquartered in Ningbo.
Mercedes-Benz AG and Zhejiang Geely Holding Group, the German and Chinese automotive groups, announced that they have formally established the global joint venture "smart Automobile Co., Ltd." for the smart brand after receiving the regulatory approvals. The total registered capital of the Joint Venture will be 5.4 billion RMB to transform smart into a leading player in premium-and intelligent electrified vehicles.
On September 5, 2021, Geely and Mercedes-Benz Group announced the Smart Concept #1 based on SEA, due in 2022.
The Smart joint venture demonstrated a sophisticated approach to cooperation. Rather than simply investing in Daimler and hoping for synergies, Geely worked to create concrete business relationships that would benefit both parties. Smart would be designed by Mercedes but engineered and manufactured by Geely—combining German design prestige with Chinese production efficiency.
The joint venture, established in 2019, saw its deliveries hit around 70,000 units in 2023. With a valuation of over $5 billion, it has also captured the attention of global investors, setting the stage for a promising and dynamic future.
IX. Competitive Position & Market Analysis
The Chinese Battlefield
The Chinese automotive market represents both Geely's greatest opportunity and its most significant competitive challenge. The 2025 leaderboard tells a story that would have been unthinkable a decade ago: Geely has now overtaken Volkswagen to claim the number-two position in China's passenger vehicle market, trailing only BYD. This is not a statistical quirk—it reflects a fundamental shift in competitive power. Geely's rise is built on a balanced and fast-refreshing ICE/NEV portfolio, enabling it to grow regardless of where the momentum sits in any given month.
With 2.6 million deliveries, BYD ranks first overall, commanding 19.9% of the world market. Geely ranks in second, with 1.3 million deliveries. The China-based group also witnessed a 68% growth rate compared to the same period in 2024. The affordable EV maker operates in almost 90 global markets, launching in Australia, Greece, and Vietnam this year.
From January to October, BYD led China's NEV market with 2,838,110 retail sales and a 28.0 percent market share. Geely ranked second in China's NEV market during the same period, achieving 1,256,404 NEV retail sales and a 12.4 percent market share.
Hyper-Competition and "Neijuan"
China's automakers call this hyper-competitive environment "neijuan"—a cycle of price wars, overcapacity, and relentless innovation. While Beijing has sought to restore "orderly competition," the reality on the ground tells a different story: Price cuts remain the default lever for gaining share; NEV production capacity exceeds 15 million units versus ~10 million in domestic demand; exports provide short-term relief but are sparking global trade pushback. This is no longer just a battle for survival. It is a strategic race to dominate 21st-century mobility.
China's EV market currently has 129 brands, and by 2030, more than 100 of those will have disappeared, according to AlixPartners. This brutal consolidation pressure explains many of Geely's recent strategic moves, including the decision to bring Zeekr back in-house and consolidate its brand portfolio.
Chinese EV models reach the market two to three years faster than non-Chinese brands, according to a 2024 report by AlixPartners. Chinese EV firms typically take 20 months to develop a new car, compared with 40 months for Chinese legacy carmakers.
Global Expansion
Geely Auto made remarkable progress in its globalization strategy, further broadening its international footprint with cumulative overseas export sales of 414,522 units in 2024, an increase of over 57% year-on-year, exceeding the annual export target of 380,000 units. The brand expanded its reach in the Middle East, Asia-Pacific, Africa, Latin America, Europe and other regions.
Looking ahead in 2025, Geely will enhance its channel and aftersales coverage by adding more than 300 overseas sales and service outlets, and is expected to have more than 1,100 outlets worldwide by the end of year.
X. Bull Case vs. Bear Case
The Bull Case
Scale Advantages: Geely's multi-brand portfolio, built on shared platforms (CMA, SEA), creates genuine economies of scale that few competitors can match. Development costs are spread across millions of vehicles while maintaining distinct brand identities.
Technology Transfer Success: The Volvo acquisition proved that Chinese ownership could enhance rather than diminish a Western automotive brand. This model can potentially be replicated with other investments.
EV Positioning: The SEA platform provides a foundation for competing in the electric era, while partnerships with companies like Waymo validate Geely's engineering capabilities.
Global Reach: Unlike pure-play Chinese EV makers, Geely has established global presence through Volvo, Lotus, and Proton—providing distribution networks and brand recognition that would take decades to build organically.
Management Quality: Li Shufu has demonstrated remarkable strategic vision and execution over three decades, navigating challenges that have destroyed many competitors.
The Bear Case
Chinese Market Intensity: The domestic market—still Geely's largest revenue source—is characterized by brutal price competition and overcapacity. BYD's scale and vertical integration create formidable competitive pressure.
Brand Proliferation Risks: The proliferation of brands (Geely, Galaxy, Zeekr, Lynk & Co, Geometry, and others) creates complexity and potential cannibalization, though recent consolidation efforts address this concern.
Geopolitical Headwinds: The Waymo partnership and Smart joint venture demonstrate Geely's global integration, but rising tensions between China and Western nations create regulatory and reputational risks for a Chinese-owned company.
EV Transition Uncertainty: The shift from ICE to EV is not linear, and Geely's hybrid strategy—maintaining both ICE and EV portfolios—requires careful balancing. Betting wrong on transition timing could prove costly.
Acquisition Integration: The sprawling portfolio of acquisitions and investments creates coordination challenges. Managing brands as diverse as Volvo and Proton requires different capabilities than building cars in Hangzhou.
Porter's Five Forces Analysis
Threat of New Entrants: High in China (see "neijuan"), but Geely's scale, brand portfolio, and manufacturing expertise create meaningful barriers. Globally, the traditional barriers to automotive entry remain significant.
Supplier Power: Moderate. Battery suppliers (particularly CATL) wield significant power, but Geely's vertical integration efforts (including in-house battery development) mitigate this risk.
Buyer Power: High in China's competitive market, where consumers can choose from over 100 brands. Brand loyalty remains lower than in mature markets, making customer retention challenging.
Threat of Substitutes: Rising. Ride-sharing, autonomous vehicles, and changing urban mobility patterns may reduce traditional car ownership, though Geely's Waymo partnership and Caocao ride-hailing service provide exposure to these trends.
Competitive Rivalry: Extremely high in China, moderate globally. BYD represents the primary domestic competitor, while Tesla, traditional OEMs, and other Chinese EV makers compete across various segments.
Hamilton Helmer's 7 Powers Analysis
Scale Economies: Present through shared platforms across brands; a genuine competitive advantage.
Network Effects: Limited in traditional auto manufacturing, though emerging in connectivity and software services.
Counter-Positioning: Geely's willingness to acquire and preserve Western brands (rather than strip them) represents counter-positioning versus traditional Chinese industrial acquirers—though this may be more cultural than structural.
Switching Costs: Low for consumers; the automotive market lacks the lock-in effects of software platforms.
Branding: Mixed. Volvo and Lotus carry genuine brand power; Geely's own brand carries less premium positioning but strong value perception.
Cornered Resource: Partial. Volvo's safety engineering expertise and brand heritage represent scarce assets that competitors cannot easily replicate.
Process Power: Emerging. Geely's rapid product development cycles (20 months for new models) suggest potential process advantages versus legacy OEMs.
XI. Key Metrics for Investors
For investors tracking Geely Automobile Holdings, three KPIs merit particular attention:
1. NEV Penetration Rate: The percentage of total sales represented by new energy vehicles (BEVs and PHEVs). In 2024, this reached 41% for Geely Auto; in H1 2025, it rose to 73%. This metric captures Geely's progress in the industry's most critical transition. Success requires staying competitive in EVs without sacrificing profitability in the still-substantial ICE business.
2. Average Selling Price (ASP): Geely's strategic goal is to move upmarket through brands like Zeekr and Galaxy while maintaining volume through mainstream Geely models. Rising ASP indicates successful premiumization; declining ASP may signal destructive price competition or brand dilution.
3. Overseas Export Sales as % of Total Volume: International expansion provides diversification from China's hyper-competitive domestic market. In 2024, exports reached 414,522 units (19% of total Geely Auto sales), up 57% YoY. Growing export share reduces dependence on domestic market dynamics and captures higher margins in less competitive markets.
XII. Legal, Regulatory, and Accounting Considerations
Geopolitical Risk: Geely's Daimler stake and various Western acquisitions create exposure to evolving trade tensions between China and Western nations. The Waymo partnership, while commercially valuable, faces scrutiny from U.S. regulators concerned about Chinese-connected vehicles.
Complex Corporate Structure: The relationship between listed entity Geely Automobile Holdings (0175.HK) and privately-held parent Zhejiang Geely Holding requires careful analysis. Not all of ZGH's assets (including the Daimler stake and Volvo Cars) are consolidated into the listed entity. Investors should understand which assets sit where.
Related Party Transactions: Given the complex ownership structure, related party transactions between various Geely entities deserve scrutiny. The recent Zeekr privatization involves valuation judgments that may warrant examination.
Chinese Accounting Standards: While Geely Auto reports under Hong Kong accounting standards (broadly aligned with IFRS), investors should remain aware of differences from U.S. GAAP, particularly around revenue recognition and asset valuation.
XIII. Conclusion: The Farmer's Son and the Future of Global Mobility
The Geely story defies easy categorization. It is not simply a tale of Chinese industrial ambition, though it certainly includes that. It is not simply a story of Western brands finding new life under Eastern ownership, though that is part of it too. And it is not simply a chronicle of one entrepreneur's remarkable journey from refrigerator parts to Mercedes-Benz shareholding, though Li Shufu's personal narrative provides the through-line.
What Geely represents is something more fundamental: a demonstration that the automotive industry's center of gravity is shifting, and that the shift creates opportunities for those bold enough to seize them. Li Shufu saw that opportunity in 1997, when he built his first car without government approval. He saw it again in 2010, when the financial crisis made Volvo available at a fraction of its peak value. And he continues to see it today, as electrification and autonomous driving remake the industry's competitive landscape.
The question for investors is whether Geely's remarkable past predicts an equally remarkable future—or whether the challenges ahead are simply too formidable. The Chinese market's hyper-competition, the geopolitical tensions surrounding Chinese technology companies, the uncertainty of the EV transition, and the complexity of managing a global portfolio of brands all represent genuine risks.
But Geely has confounded skeptics before. The Ford executives who laughed at Li Shufu's 2007 letter (or more likely, never read it) learned that lesson the hard way. The analysts who questioned whether a Chinese company could successfully manage a Swedish premium brand learned it too.
Li is the founder and largest shareholder of Zhejiang Geely Holding Group, a maker of cars and related components. The Hangzhou-based company made the biggest acquisition of a foreign carmaker by a Chinese company when it bought Volvo for $1.5 billion in 2010.
From a hundred yuan ($16) invested in a camera business to a multi-billion-dollar global automotive empire—that is the journey of Li Shufu and Geely. Whether the next chapter proves equally remarkable remains to be seen. But those who dismiss the farmer's son from Taizhou do so at their peril.
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