Americans poured hundreds of millions of dollars into a Chinese electric vehicle (EV) brand, even though its cars are not yet even available for purchase in the United States. Hangzhou-based automaker Zeekr made its debut on the New York Stock Exchange.
The company opened 24% higher than its initial public offering price. However, the news comes as an expected U.S. increase on tariffs for EVs from China is likely on the horizon.
Download the SAN app today to stay up-to-date with Unbiased. Straight Facts™.
Point phone camera here
Zeekr’s U.S. launch is now planned for 2025. American investors already bet on the potential success of Chinese EVs in the U.S. market due to their affordability. Some of the company’s newest models have an average price tag of about $40,000. That is around $14,000 less than most U.S. buyers pay for their EVs. With the company now going public, Zeekr sold 21 million American depositary shares to raise $441 million.
However, the Biden administration is wary of the impact of Chinese EVs on the domestic market. The administration raised concerns that the affordability of Chinese EVs could undercut U.S. brands, leading to economic benefits for Beijing. Currently, no Chinese auto brands are available in the U.S. The federal government considered imposing higher tariffs on EVs from China to keep it that way.
A tariff of 27.5% served as a deterrent for Chinese automakers from exporting their vehicles to the U.S. However, the White House reportedly plans to increase that rate by as early as next week, potentially quadrupling the duty. Whether this proposed tariff hike will impede Zeekr’s plans for a U.S. expansion remains uncertain as the company prepares for its anticipated entry into the American market.
[JACK AYLMER]
AMERICANS ARE INVESTING HUNDREDS OF MILLIONS OF DOLLARS IN A CHINESE ELECTRIC VEHICLE BRAND.
SPENDING MONEY ON AN AUTOMAKER WHOSE CARS CAN’T EVEN BE BOUGHT IN THE U.S.
WELL, NOT YET ANYWAYS.
ZEEKR IS THE CHINA-BASED EV COMPANY AT THE CENTER OF ALL THIS.
THEY JUST DEBUTED ON THE NEW YORK STOCK EXCHANGE, OPENING 24 PERCENT HIGHER THAN THEIR INITIAL PUBLIC OFFERING PRICE-
AS THE COMPANY EARNED A VALUATION OF NEARLY 7 BILLION DOLLARS.
21 MILLION OF THE COMPANY’S SHARES WENT TO U.S. BUYERS, TOTALING ALMOST 450 MILLION DOLLARS.
LIKE ALL OTHER CHINESE AUTOMOTIVE BRANDS, YOU CAN’T GET ONE HERE.
BUT AMERICAN INVESTORS ARE STILL BETTING ON THE AFFORDABILITY OF CHINESE EVS BEING A HIT WHEN THEY DO FINALLY REACH THE STATES.
-WITH A U.S. LAUNCH CURRENTLY PLANNED FOR 20-25.
THE AVERAGE 40,000 DOLLAR PRICE TAG OF ONE OF ZEEKR’S NEWEST MODELS IS OVER 14 THOUSAND DOLLARS LESS THAN WHAT MOST AMERICAN EV BUYERS PAY.
WHILE CHEAPER ELECTRIC VEHICLE OPTIONS are GREAT FOR U.S. CONSUMERS, THE FEDERAL GOVERNMENT MAY NOT BE AS THRILLED.
THE BIDEN ADMINISTRATION HAS BEEN WORKING TO KEEP CHINESE EVS OUT OF OUR COUNTRY.
WORRIED THAT THEIR LESS EXPENSIVE OFFERINGS WILL UNDERCUT DOMESTIC BRANDS AND ULTIMATELY LEAD TO THE U.S. EV PUSH LINING BEIJING’S POCKETS.
IT’S PART OF WHY THE GOVERNMENT IS NOW REPORTEDLY EXPECTED TO ANNOUNCE HIGHER TARIFFS ON CHINESE EVS BY AS EARLY AS NEXT WEEK.
SO FAR, A 27 AND A HALF PERCENT DUTY HAS BEEN SUFFICIENT TO DETER THESE CHINA-BASED COMPANIES FROM SENDING THEIR CARS OVER.
BUT WITH ZEEKR PREPARING TO MAKE THE MOVE STATESIDE, WHETHER OR NOT INCREASED FARES WILL SLOW THOSE PLANS DOWN REMAINS TO BE SEEN.
JACK AYLMER – STRAIGHT ARROW NEWS.
MOST POPULAR
-
AP Images
N. Korea hackers steal military secrets, hit Air Force bases, NASA, US says
-
Getty Images
A convicted child rapist is competing in Paris Games, many want to know why
-
AP
Barack and Michelle Obama endorse Kamala Harris for president
-
Reuters
Attacks disrupt trains ahead of Olympics opening ceremony