Pressure mounts on Lynk & Co as Volvo sells full stake to Zeekr 

Volvo Cars has announced the sale of its entire stake in Lynk & Co to Geely-owned Zeekr in a deal worth approximately €710 million. This move is part of a larger strategy by parent company Geely to streamline its electric vehicle operations and shift away from an acquisition strategy to boosting synergies across its brands.

Founded in 2016 as a joint venture between Volvo and Geely, Lynk & Co is older than Zeekr. The brand initially focused on hybrid and plug-in hybrid vehicles for its home market, where it managed to gain a foothold but below Geely’s expectations.

The newcomer brand was introduced in Europe to spearhead the novelty subscription model driven by an exclusive online approach. It was positioned as a mobility provider rather than a carmaker.

Selling three times more

Success has been modest, and the brand moved too slowly toward EVs, which has led to replacing CEO Alain Visser with Volvo veteran Nicolas Lopez Appelgren and reshaping the distribution model.

Selected Volvo dealers are now eligible to sell the brand in their showrooms. The changes in sales strategy and ownership are similar to those made to Polestar, from which Volvo divested completely last year.

Also, the Polestar range will now be made available through conventional dealer networks. Together, Zeekr and Lynk & Co represent 30% of Geely’s sales and are targeted to sell 1 million vehicles annually, roughly three times the current rate of deliveries.

However, as market conditions change and EV adoption faces headwinds, the mother company, Geely, is reshuffling its industrial strategy. Instead of acquiring new brands, it intends to focus on cost efficiencies by scrapping redundancies in model development and operations. Lynk & Co and Zeekr already share technologies. The battery-powered Lynk & Co 02 is technically closely related to the ZeekrX.

Strategic synergies

Profile-wise, the cars are too close, and Geely wants to reduce that internal competition through the renewed shareholder structure. Zeekr will acquire Volvo’s 30% stake in Lynk & Co and a 20% stake from Geely Holding. This will make Zeekr the majority shareholder with 51% ownership, while Geely Auto retains the remaining 49%. The sale is expected to be finalized in the first quarter of 2025, with 70% of the transaction amount paid upfront and the rest, plus interest, following a year later.

According to Geely, this restructuring also aims to enhance technological integration behind the beholder’s eye and optimize resource allocation. Zeekr is expected to lead innovation for electric and connected vehicles, sharing technologies and components with Lynk & Co and Polestar. This collaboration is projected to reduce R&D costs by 10-20% and lower material costs by 5-8%.

Lagging growth rate

For Lynk & Co, the shift comes amid its continued expansion into the EV market. The brand recently launched the 02 in Europe as its first all-electric model. Despite Lynk & Co’s growing sales, with 195,600 vehicles sold in the first nine months of 2024, a 40% increase year-over-year, its growth rate lags behind Zeekr. The younger brand recorded 143,000 sales during the same period, an 81% increase bolstered by its focus on premium EVs.

Volvo Cars, also owned by Geely, emphasized that the sell-off aligns with Lynk & Co’s new development phase and does not mark the end of their collaboration. It’s unclear what will happen to the award-winning headquarters of Lynk & Co, located in Gothenburg, in the immediate vicinity of former shareholder Volvo.