Zeekr needs to recreate the "001".

On September 15, Geely Automobile (0175.HK) issued an announcement stating that the proposed transactions under the merger agreement (including privatization and merger matters) have been officially approved at the ZEEKR general meeting of shareholders. Previously, Geely Automobile's Executive President and CEO, Gui Shengyue, said that the delivery work of the "major merger" between Geely and ZEEKR is expected to be completed before the end of this year.

Image source: Screenshot of the announcement

Meanwhile, the strategic integration of ZEEKR and Lynk & Co has also entered the implementation stage, and the merged entity is named ZEEKR Technology Group. Recently, Geely Group announced the establishment of a new ZEEKR Vehicle Research Institute and transferred the Z, C, and M product lines, which include models such as the ZEEKR 9X, ZEEKR 007, and ZEEKR MIX, to it. Prior to this, the Lynk & Co Research Institute was established, and the L and K product lines were transferred to it.

The establishment of vehicle research institutes by ZEEKR and Lynk & Co respectively this time means that after ZEEKR Group is integrated into Geely Group, the two major brands of ZEEKR and Lynk & Co will operate independently again.

01. Geely's "Addition and Subtraction"

From the merger of Lynk & Co and ZEEKR to the privatization of ZEEKR, under the "One Geely" strategy, Geely's integration idea is also quite clear: Qianli Technology is responsible for the research and development of assisted driving, and the Central Research Institute is responsible for the development of intelligent cockpits and platform technology architectures. Together, they provide technology for each vehicle research institute.

Now, Geely Group has vehicle research institutes for brands such as the Lynk & Co Vehicle Research Institute, ZEEKR Vehicle Research Institute, and Galaxy Vehicle Research Institute. Technology R & D is unified under the Central Research Institute, and each vehicle research institute is responsible for vehicle development - related work such as marketing, product definition, and interior and exterior project management of each brand under Geely.

Image source: Screenshot from Weibo

Since the proposal of the "One Geely" strategy, Geely has done a good job in subtraction.

For example, in terms of the supply chain. After the merger, Geely's global annual procurement volume exceeds 200 billion yuan. With such a "big shot" leading ZEEKR to place orders together, the battery procurement price can be reduced by at least 5%. This also enables ZEEKR's overall gross profit margin in the second quarter to reach a level of over 20%.

There is also the R & D aspect. In the past, there was a large amount of repeated investment in technology R & D and the supply chain among ZEEKR, Lynk & Co, and Geely Galaxy and other sub - brands. After the integration, the three brands can share a set of intelligent electric platforms. The SEA vast architecture of ZEEKR and the SPA Evo architecture of Lynk & Co are interoperable. The reuse rate of core modules such as three - electric technology and electronic and electrical architecture exceeds 70%. Also, the Lynk & Co 900 and ZEEKR 9X share the chassis and battery pack through differentiated positioning, and the R & D cost can be reduced by 30%.

Geely is also doing "subtraction" in channel integration. Currently, the marketing leadership of the two major brands of ZEEKR and Lynk & Co is in the hands of Lin Jie, who led the channel reform after taking office. Previously, ZEEKR, which adopted a direct - sales model in the channel, began to introduce the partner (agency system) model to fill the gap in ZEEKR's channel layout in the sinking market.

The multi - aspect integration is also reflected in Geely Automobile's financial performance in the first half of the year. The financial report data shows that the proportion of Geely Automobile's marketing and R & D expenses in the total revenue in the first half of the year has decreased compared with the same period last year. Looking only at ZEEKR's second - quarter financial report, ZEEKR's R & D and marketing expenses decreased by 42.9% and 9.7% respectively.

Data source: Geely Automobile's financial report

However, from the perspective of addition, the contribution of the upcoming "returning" ZEEKR to Geely is not that significant.

In the first half of this year, the average price per vehicle of ZEEKR decreased by 16,000 yuan year - on - year from 246,000 yuan to 230,000 yuan, which is the largest decline in average price per vehicle among the three brands. In contrast, the overall unit price of Geely Automobile decreased by less than 10,000 yuan year - on - year from 89,000 yuan to 80,000 yuan, while the average unit price of Lynk & Co remained basically flat at 137,000 yuan.

Judging from the delivery data, although the overall delivery volume of ZEEKR after integrating Lynk & Co increased by 9% year - on - year, this increase is mainly contributed by Lynk & Co. Looking separately, the delivery volume of the ZEEKR brand in the second quarter was 49,337 vehicles, a year - on - year decline of nearly 10%, while the delivery of Lynk & Co increased by 26% year - on - year.

In fact, from the third quarter of last year to the second quarter of this year, the sales volume of Lynk & Co has always accounted for more than half of the total sales volume of ZEEKR + Lynk & Co, reaching 62.3% in the second quarter.

Data source: ZEEKR's financial report

Lin Jie said, "The integration of ZEEKR and Lynk & Co is not simply a 'two - in - one'. We will maintain the respective brand positioning of ZEEKR and Lynk & Co for development. ZEEKR should go further upmarket, and Lynk & Co should expand more widely."

02. The Long - Overdue "Apology"

As a part of the group, ZEEKR is like "dancing with shackles".

This can be reflected in the layout of ZEEKR models. The first model is a shooting - brake coupe, and the second is an MPV. This layout seems a bit "unconventional", but it is in line with the overall positioning layout of Geely Group.

Image source: Canstock

When ZEEKR first launched its first model, the "001", Lynk & Co already had some SUVs on sale. So, positioning it as a shooting - brake coupe also meant to avoid competition with Lynk & Co.

However, what ultimately determines whether a car can become a hit is not its internal positioning but its external competitiveness. The ZEEKR 001 is a typical example.

Four years ago, when the ZEEKR 001 was launched, there was no real competitor in the pure - electric shooting - brake coupe market below 300,000 yuan. Whether it was the 3.8 - second zero - to - hundred acceleration performance or the dual - motor four - wheel drive + 100 kWh Kirin battery + CDC + air suspension + 8295 + lidar (competitors at the same price either had a single motor or a smaller battery), the 001 presented a state of "you don't have what I have, and if you have it, I have it better".

However, the sales volume of the ZEEKR 001 has dropped "precipitously" this year.

Image source: Car Owner's Guide

According to the data from "Car Owner's Guide", after February this year, the monthly sales volume of the ZEEKR 001 has basically been at the level of 2,000 - 3,000, far from the previous monthly sales volume of 10,000.

What can replace a top - selling model is usually a new top - selling model in the same track. The Xiaomi SU7 is this new top - selling model. The launch of the Xiaomi SU7, which comes with a halo of popularity, just hit the "comfort zone" of the ZEEKR 001.

What's worse is the operation of the ZEEKR 001 of "changing three generations in one year". Shortly after its launch in 2023, in February 2024, the ZEEKR 001 suddenly launched the 2024 version, which was not only 20,000 yuan cheaper than the old version but also upgraded the battery and the new car was equipped with an 800V platform. By August, the ZEEKR 001 suddenly underwent another facelift. This version, called the 2025 version, was a major upgrade compared with the 2024 version. The mid - and high - end models were equipped with two NVIDIA Orin - X chips, and the computing power was directly increased to 508 TOPS, greatly improving the intelligent assisted driving level.

Coupled with the launch of the Xiaomi SU7 in 2024, ZEEKR was ridiculed as "while others spend three years making a sword, ZEEKR makes three swords in one year".

Image source: Screenshot from Weibo

At the recently held mid - year performance press conference, Gui Shengyue apologized for the "back - stabbing" incident: "We have profound lessons in this regard. On behalf of Geely Automobile, I sincerely apologize to all users of Geely's brands who have felt 'back - stabbed'. We should bravely take responsibility for our deficiencies, and we have started to make improvements in many aspects."

Events such as the ZEEKR 001 "changing three generations in one year" and the cutting of the basic in - car infotainment data for old car owners this year have all affected ZEEKR's reputation and sales volume.

03. What Else to Do

How to create a new hit model is a problem.

The ZEEKR 9X, which started pre - sales at the end of August, is highly anticipated. With a starting price of 479,900 yuan, it received over 40,000 pre - orders in one hour. The ZEEKR 9X, which is equipped with the vast super hybrid system, vast AI digital chassis, vast safety armor, and Qianli vast intelligent assisted driving, seems to have regained the advantage of "extreme cost - performance" that the ZEEKR 001 had in the past.

Image source: Screenshot from Weibo

The high price of nearly 500,000 yuan also confirms the brand positioning when ZEEKR and Lynk & Co merged - "ZEEKR goes upmarket, Lynk & Co expands widely".

This positioning can basically be interpreted as ZEEKR will further focus on the high - end luxury market, position itself as a global luxury technology brand, focus on the B - class and above markets, and create flagship products with high added value and high - tech content. Lynk & Co will expand into the mainstream market, position itself as a global high - end new - energy brand, cover a wider range of people and diverse energy forms (fuel, HEV, plug - in hybrid, pure - electric), and target the price range of 150,000 - 300,000 yuan to meet diverse needs such as family, sports, and intelligence.

In a situation where there is not much room for improvement in "electrification", to do well in the high - end market, absolute advantages must be shown in two things - service and intelligence.

ZEEKR already has this awareness. Especially after Lin Jie took over ZEEKR's sales, the service system of ZEEKR has indeed changed. Some media reported that ZEEKR has raised the standard for customer ratings. Previously, there was no hard requirement. Now, after providing service to customers, whether it is for car booking or test driving, customers must give a 10 - point positive review, and a photo must be taken and sent to the work group to prove its authenticity, and then the store manager will collect and report it. Moreover, even if some users are willing to give an 8 - point or 9 - point rating based on their experience and judgment, it is not allowed now; it must be 10 points.

ZEEKR has even added "mystery shoppers" like some milk tea shops and hotels to spot - check the service attitude of sales staff. For example, in