Geely is one of China’s biggest private auto builders owned by billionaire Li Shufu, also known under his English name, Eric Li. His net worth is 15.1 billion USD, and he is the 115th richest person in the world, according to Forbes. He is often described as a megalomaniac and a tenacious businessman who does not take no for an answer. Geely has everything: Dozens of car brands from entry-level to premium, SpaceX-like satellites or ride-hailing businesses competing with Chinese Uber.
Li Shufu is also called Chinese Henry Ford, as both come from poor environments and built a global automaker from nothing. And by the poor environment, we mean poor, not that their fathers owned an emerald mine. Both grew up in an agricultural environment as Li was the son of a farmer in Zhejiang, a province neighboring Shanghai.
Li founded Zhejiang Geely Holding Group 37 years ago, in 1986, as a manufacturer of refrigerators. In the early 90s, he tapped into a scooter building, and in 1997, he established a Geely Auto subsidiary dedicated to auto production. When being criticized for lack of experience, he dismissed those voices, saying his famous words, “Making a car is not hard. It is just four wheels and two couches.” If I had one question to ask him, it would be if he thinks the same 25 years later.
The automobile business was going well; Geely started the production of small vans, and in 1999, they received a government permit to manufacture cars. In 2002, the first Geely car rolled off the production line.
We will probably never find out the actual reasons why Li Shufu approached Ford to buy Volvo from them. Did he feel related to the U.S. company built from nothing by the same farm boy as he was, or was it a coolheaded intention? In any case, it doesn’t matter now. In 2002, Li Shufu mentioned he wanted to acquire Swedish Volvo from Ford at Geely’s internal meeting for the first time.
In 2007, Geely sent an official letter to Ford expressing a wish to acquire Volvo. However, it was ignored and never replied to, as Geely was not taken seriously then. It was a harsh reality check for an ambitious Chinese entrepreneur.
Wicked tongues even says managers at Dearborn had lots of laughs about it, but it is more likely they didn’t even notice, as Li Shufu sent his proposal through a PR agency. Yes, he used a PR agency to contact Ford’s HQ. Some would call it inexperience, but I would call it learning by failing, typical for Li.
But Eric stayed persistent. In 2008, he managed to get a meeting with Ford’s CFO at the Detroit Auto Show. But it went even worse than the PR agency letter the year before. Ford wasn’t impressed by the small and unknown Chinese automaker and replied to the proposal with the classic “We will let you know”.
But it wouldn’t be Li Shufu if he gave up so quickly. He started to put together an acquisition team. No more PR agency, he invited auto industry fines Rothschild investment bank who helped him to get more heavyweights on board his new squad: Deloitte Touche Tohmatsu for finance consulting, Freshfield Law Firm for legal issues and auditing and industry veteran Freeman Shen, the then Vice President of Fiat China.
Then, in 2009, Li Shufu, in full armor and side by side with Yu Liping, Rothschild’s China President, revisited Ford’s booth during another Detroit Auto Show, expressing their persistent wish to buy the North European automaker. And things were different then – Ford’s CEO promised to notify Geely if they decided to sell Volvo.
And the timing couldn’t be better. Ford started to feel the total pressure of the 2008 financial crisis as the cash pile they sat on grew thinner, and the global auto market situation wasn’t much better. They decided to sell Volvo, and as Li Shufu had the team ready, the whole process went incredibly fast.
Li Shufu managed to finalize financing and get the blessing of Beijing, and on August 2, 2010, Ford and Geely signed a final agreement for the Volvo acquisition. Geely paid 1.5 billion USD in cash for the Swedish jewel.
Li Shufu has always respected Volvo’s brand. He often commented that Volvo is Volvo and Geely is Geely. In May 2014, CarNewschina reported him saying, “Geely and Volvo are like brothers, not father and son.”
But Geely Group is not just Volvo and Geely Auto. There are many of other brands under the Geely Group:
- Lynk&Co – PHEV SUVs for hipish millenials. In China, they also produce ICE versions
- Zeekr – BEV-only premium brand to compete with Tesla
- Livan – join-project with Lifan for the ride-hailing business
- Radar – pickup BEV brand
- Lotus – Geely bought the logo of the former British automaker
- Polestar – BEV brand under Volvo
- Smart – joint venture with Mercedes-Benz. MB takes care of the interior
- LEVC – London Electric Vehicle Company, which Geely acquired/rescued in 2013 in £11 million deal
Moreover, the Geely Auto is divided into three series:
- Star – lots of legacy ICE cars from Geely
- Geometry – entry-level EVs
- Galaxy – premium PHEVs and BEVs
On top of that, Geely’s Geespace aims to have 72 satellites in orbit by 2025 to support their cars ADAS, operates Cao Cao mobility ride-hailing service that competes with Didi in China and Cao Cao Auto, which is a dedicated sub-brand producing EVs with swappable battery for their drivers. Geely also announced they plan to have 5000 battery swap stations by 2025 globally. Li Shufu never hid his megalomanic plans with his company.
Geely is also the only Chinese automaker that managed to sell China-made passenger EVs on U.S. soil despite about 25% import tariffs. Polestar sold over 10,000 imported Polestar 2 on the American market in 2022, even featuring in a Superbowl commercial. BYD also sells EVs in the U.S., but those are buses, and made in California.
Geely also owns nearly a 10% stake in Mercedes-Benz, which Li gained in a controversial move, and Mercedes wasn’t pleased with it. Geely spent months stealthy acquiring Mercedes shares in a 9 billion USD deal, becoming the second-largest shareholder, as revealed in March 2018. Times when Li Shufu, who celebrated his 60th birthday in June, was waiting for legacy auto executives to answer his call are gone.
His last move was signing a deal with Nio to develop a battery swap station network together. Time will show if Geely only wants to integrate battery swapping support into its next-generation SEA electric vehicle platform or if they have other intentions, like making Nio their 9th sub-bran, as Li Shufu never loses appetite for buying new companies.