(Yicai Global) March 24 -- China’s largest private carmaker Zhejiang Geely Holding Group has decided to register its latest electric vehicle venture overseas to better position it within the global market and to be able to exploit a more diverse set of financing opportunities, the firm’s chief executive officer told Yicai Global.

Geely Holding and its unit Geely Automobile Holdings have set up a joint venture in the Cayman Islands to facilitate international market expansion and get access to opportunities for future financing and listings in offshore capital markets, Daniel Li said yesterday in an exclusive response to questions from Yicai Global. The JV will then do business in China through a wholly-owned foreign enterprise that it will set up in the country, he added. The JV will then do business in China through a wholly-owned foreign enterprise that it will set up in the country, he added.

The Zeekr JV will engage in “the research and development, purchase and sale of electric mobility related products such as the intelligent electric vehicles under the Zeekr brand and the provision of service relating thereto in China,” Hangzhou-based Geely Auto said in a filing to the Hong Kong bourse yesterday.

From a legal perspective, using an overseas entity to operate the Zeekr brand will facilitate future recognition in the US stock market, said Tang Danning, a partner at Shanghai Duan And Duan Law Firm.

Building smart pure electric autos requires huge investment in areas such as autonomous driving, Internet of Vehicles, satellite communications, chips and product platform architecture. As a result, more and more traditional car makers are setting up standalone electric car units to try to raise funding through a separate listing. Examples are SAIC Motor and Alibaba Group Holding’s Zhiji Auto and GAC Group’s GAC Aion New Energy Vehicle.

Geely Auto does need new sources of funding after its failed plan to merge with Sweden’s Volvo Cars and the halt on a secondary listing on the Shanghai Stock Exchange’s Nasdaq-style Star Market, a company insider told Yicai Global. It is inevitable that Geely Auto will seek to list Zeekr, he added.

Geely Auto sold 1.32 million cars last year, making it China’s best-selling passenger vehicle marque for the fourth year running. It has also become the first Chinese automaker to sell more than 10 million units worldwide.

Geely Auto's stock price [HKG:0175] sank 11.75 percent today to close at HKD19.90 (USD2.56), giving it a market capitalization of HKD195 billion (USD25 billion). Shares have lost 40 percent of their value in the two months between Jan. 26 and March 23.

Editors: Xu Wei, Kim Taylor