China’s electric vehicle industry expands into international markets despite increasing western trade barriers

The Chinese electric vehicle sector is making waves in offshore markets, with Zeekr, a premium car brand carved out of China’s Geely group, making a splash in the US. The company raised $441 million in New York through the sale of 21 million American depositary shares, marking the biggest IPO by a Chinese company in the US since 2021. Investor sentiment towards Chinese-linked stocks seems to be improving, as Zeekr’s shares gained 34% on Friday.

However, the company’s debut comes at a time when new trade barriers are looming. The Biden administration is expected to raise tariffs on Chinese EV imports from 25% to 100% on Tuesday, while the European Commission is also looking into raising tariffs on electric car imports from China. Despite these challenges, the Chinese EV industry continues to show robust growth, with sales up more than 30% in the first four months of the year.

The Zeekr listing is just the beginning of a flurry of upcoming Chinese EV IPOs, including Horizon Robotics and Black Sesame Technologies. Analysts believe that market conditions have improved for Chinese offshore equities this year, with Hong Kong’s benchmark Hang Seng index gaining 24% since January. However, there are concerns about the outlook for Chinese automakers in Europe and the US, as officials grapple with the need for Chinese technology to meet climate change goals while also considering national and economic security concerns.

Overall, the Zeekr IPO signals a shift in the US-China relationship and a growing appetite for Chinese IPOs in growth industries. Investors will be closely watching the performance of Chinese EV companies in the coming months as they navigate a complex and competitive global market.