Five early investors in Zeekr, including CATL and Intel Capital, have raised concerns about Geely’s US$2.2 billion proposal to take the EV unit private.

The investors sent letters to Zeekr’s board, stating that the offer undervalues the company.

They argue the US$6.5 billion valuation implied by the offer is lower than competitors like Li Auto, Nio, and Xpeng, and that Zeekr’s financial performance is stronger.

Geely, which owns about two-thirds of Zeekr, announced the take-private bid on May 7, aiming to merge Zeekr into its Geely Auto unit.

Zeekr’s valuation has varied, starting at US$9 billion in 2021, rising to US$13 billion in a later round, then dropping to US$5.5 billion at IPO.

Neither Geely nor Zeekr has commented. Discussions with Zeekr’s special committee are ongoing.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Zeekr’s valuation rollercoaster highlights EV market uncertainty

Zeekr’s dramatic valuation shifts reflect the broader volatility in the electric vehicle sector, with investors struggling to find stable pricing models.

The premium EV maker has experienced remarkable valuation swings, from $9 billion in its 2021 initial funding round to $13 billion in early 2023, before dropping to just $5.5 billion at its 2024 IPO, and now valued at $6.5 billion in Geely’s privatization offer1.

This pattern reflects challenges faced across the EV industry, where companies struggle to maintain consistent valuations amid rapidly changing market conditions.

Despite delivering 41,403 vehicles in Q1 2025 (a 25% year-over-year increase) and improving its gross margin to 19.1% from 16.3% a year earlier, Zeekr’s market valuation remains well below its peak private funding levels2.

The disconnect between operational improvements and market valuation highlights growing skepticism about EV companies’ ability to deliver sustained profitability in an increasingly competitive landscape.

2️⃣ Chinese EV market faces inevitable consolidation pressure

The controversy over Zeekr’s privatization reflects a broader industry trend toward consolidation as smaller players struggle to achieve sustainable scale.