Li Shufu leads Geely in a trillion-dollar sprint

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

Four months ago, Li Shufu called together the executives of Geely Holding Group to gather at Geely's first factory—the Taizhou Linhai manufacturing base. The theme of the discussion was Geely's transformation.

Subsequently, the "Taizhou Declaration" was unveiled. Li Shufu made it clear that Geely would shift from previous strategic expansion to strategic focus and strategic integration. Over the past four months, Geely has also continued to integrate internal resources, aiming to focus on car manufacturing and create synergy.

Just as the "Ningbo Declaration" was proposed 18 years ago, initiating Geely Holding's capital expansion, mergers and acquisitions, and global layout, the "Taizhou Declaration" represents a strategic pivot made by Li Shufu and the Geely management team at a crossroads in the development of China's automotive industry, facing the future.

At the analysis meeting on January 5, Geely executives, including Geely Holding Group CEO Li Donghui, explained why Geely needed to launch the "Taizhou Declaration." In the face of the new global economic situation and the new competitive landscape of the industry, Geely has entered a new stage of strategic transformation. Geely is committed to becoming a leader in electrification, intelligent transformation, and high-quality development in the next three years, gradually forming differentiated green intelligent mobility ecological competitiveness.

In the past, Geely's continuous layout in the automotive industry chain and ecosystem allowed businesses to develop independently, linking more resources through IPOs. Currently, more than 10 companies under the Geely umbrella have been listed or are planning to go public, with a total valuation exceeding RMB 600 billion.

The phase of independent operations has passed; the deteriorating financing environment and intensified industry competition have prompted Geely to move from capital mergers and acquisitions and broad networking to the implementation phase of the industry. Geely needs to allocate resources effectively, and both efficiency and scale will reach a new level. The market will also reassess the value of Geely's companies, and Li Shufu's trillion-yuan industrial empire is taking shape.

As Chinese car companies, including Geely, sail toward the global stage, they are striving to find their own competitiveness. By linking capital and collaborating with the industry, they aim to carve out a unique path in this transformation that is changing the global automotive industry.

Focus

Since October last year, multiple automotive brands under Geely Holding have begun significant integration.

The Geometry brand has merged into the Galaxy brand; Lynk & Co and ZEEKR have undergone strategic integration; Geely Auto Group CEO Gan Jiayue also confirmed on January 5 that Yizhen and Radar have officially merged into Geely Auto Group.

After this integration, the front-end brands of Geely's passenger vehicle segment have formed a "two-horizontal" structure consisting of Geely Auto Group and ZEEKR Technology Group as the two main automotive business entities.

Among them, Geely Auto Group includes brands such as Geely, Geely Galaxy, Radar, and Yizhen, achieving full coverage of categories such as sedans, SUVs, MPVs, off-road vehicles, and pickups in the mainstream market; ZEEKR Technology aims to integrate Lynk & Co and ZEEKR to create a globally leading high-end luxury new energy vehicle group.

After the formation of the "two-horizontal" structure, Geely's passenger vehicle segment has achieved a layout covering different consumer markets and user needs, and has improved the diversification of new energy forms such as "pure electric, plug-in hybrid, range-extended, and hydrogen fuel."

Geely Holding Group President and ZEEKR Intelligent Technology CEO An Conghui pointed out that brand integration not only better connects with users but also aims to coordinate model planning, technical routes, optimize industrial chain layout, continuously reduce costs and increase efficiency, and enhance the company's competitive advantage While integrating front-end brands, Geely has also further streamlined its mid- and back-end business and technology. This includes a comprehensive layout of seven key new energy technologies: vehicle architecture, electronic and electrical architecture, intelligent driving, intelligent cockpit, electric drive system, power battery, and super electric hybrid.

Geely summarizes these seven key technologies in the new energy vehicle industry chain as "Seven Verticals." The purpose is to address the issue of low resource integration among various brands as Geely Holding Group's business and brand have expanded over the past decade.

An Conghui revealed that Geely is currently focusing on the GEA global new energy architecture and the SEA vast architecture for vehicle construction. These two architectures share BOP process routes and manufacturing hard points, which can improve manufacturing efficiency by 10% and achieve better component scaling effects, with a component generalization rate of over 70%. This will further reduce R&D investment by 30% and improve R&D efficiency by 30%.

In terms of electric drive systems, Geely has planned two major platforms: the 180 platform and the 220 platform. Through the collaborative integration of the electric drive platform routes, Geely has streamlined its product lineup, avoiding redundant development and reducing the types of components by more than 50%.

Through the two horizontals and seven verticals layout, Geely's passenger car sector further focuses on the automotive main business. An Conghui pointed out that this is a core action for Geely to win in the global automotive industry transformation.

Gan Jiayue stated that 2025 will be a significant product year for Geely. According to Geely's plan, the annual sales target for Geely Automobile Group this year is 2.71 million units, a year-on-year increase of 25%.

Li Donghui revealed that recently, Geely Holding has set a strategic goal for the next three years—by 2027, total vehicle sales will exceed 5 million units.

If successful, Geely is expected to enter the TOP 5 of the global automotive group sales rankings by 2027, holding a significant position in the global automotive industry. Li Shufu's years of planning will enter a harvest period.

Chasing Dreams

A revolution in the automotive industry has already entered deep waters.

Strong players like Volkswagen and BBA are undergoing transformations from the inside out to respond to industry changes; in China, new stars like Huawei's HarmonyOS, Li Auto, and others are rapidly rising, disrupting the industry landscape and aiming for annual sales of one million units.

Under the continuous evolution of technological change and consumer demand, the automotive industry chain is continuously adjusting, and the reconstruction of the ecosystem is accelerating. Coupled with geopolitical changes and shifts in the global economy, the century-old automotive industry is at a critical transformation period, bringing challenges as well as new development opportunities.

Li Shufu, who has long predicted the arrival of the automotive industry revolution and is committed to making Geely a global technology group, is unwilling to miss the opportunities presented by the times.

Eighteen years ago, Geely released the "Ningbo Declaration," which primarily addressed the issues of technological capability lag and poor product quality faced by the Chinese automotive industry at that time; the "Taizhou Declaration" reflects Geely's hope to achieve leaps in technological innovation and product capability through further focus and synergy in technology and capabilities, helping the Chinese automotive industry break free from the vicious cycle of low quality, low price, and blood loss.

By acquiring brands like Volvo and Lotus Cars, Geely has integrated advantageous resources over the past 18 years, seeking global leading technology partners and advancing R&D technology, thus building a vast automotive empire In this process, with automobiles as the singularity, from low-orbit satellites, vehicle-mounted chips to autonomous driving, Li Shufu's capital reach has spread to every corner of the automotive industry chain. Li Shufu is also tirelessly pushing a number of Geely-affiliated companies to the capital market.

However, issues such as independent brand operations, mutual competition, and the pace of transformation in new energy have raised doubts among outsiders about whether Geely's vast industrial layout can generate synergies and create a "1+1>2" effect. This is reflected in the capital market, where investors have not given Geely-affiliated companies a valuation premium.

Geely Holding Group's total sales last year are expected to be around 3.32 million units, a year-on-year increase of 21%, with a new energy penetration rate of 45%. However, while Geely Auto's stock price rose over 72% in 2024, its price-to-earnings ratio (PE) is still only around 8, which is at the industry median level among Chinese automakers; there remains a gap compared to companies like BYD, Seres, and Li Auto, which have performed outstandingly in new energy transformation (17-50 times PE).

To gain further recognition from investors, it is necessary to convert the capital layout of the past few years into industrial results; in the current market competition environment, Geely needs to synergize internal resources to reach a higher scale, making its technological capabilities in intelligent driving, new energy, and spatial interconnectivity more prominent, establishing unique technological labels.

Geely can also truly connect its ecosystem and build a trillion-dollar business empire.

Li Donghui stated at a communication meeting that Geely will follow the "1-3-3" strategic approach to create a sustainable future for the group. This means adhering to the "Taizhou Declaration" as a general guideline, focusing on three major strategic transformations: organizational and cultural transformation, competitiveness transformation, and management model transformation, while strengthening three major business segments: complete vehicle business, core components, and ecological business.

The goal is for Geely to establish itself domestically and expand overseas in the next three years, achieving qualitative and quantitative improvements in complete vehicle business, innovation-driven component business, and open collaboration in ecological business, collectively pushing the company's strategic transformation into a new phase.

Geely will thus be rejuvenated. In the future, it will form a "trinity" of industrial ecological competitiveness comprising complete vehicle products, core components, and ecological business; competitive advantages will shift from scale cost advantages to green intelligent technology advantages; and each brand will transition from independent operation to deep global collaboration.

It is foreseeable that the phase of large-scale listings for Geely-affiliated companies has passed, and the next step is to rely on industrial ecology, scale, and performance to carve out a new territory; following last year's integration, Geely will make more adjustments to enhance scale and efficiency. In this process, Geely will continue to uphold long-termism, pursuing depth and breadth in the industry rather than merely chasing scale and speed.

This will also be a key leap for Chinese automakers, including Geely, to seize the opportunity of a century-long industrial transformation and establish a foothold on the global stage. The great voyage of Chinese automakers has already begun