Good News on Listing | Frost & Sullivan Assists Jikuang Intelligent Technology Co., Ltd. in Successfully Going Public in the US (ZK.NYSE)

ZEEKR Intelligent Technology Holding Limited (stock code: ZK.NYSE) successfully listed on the New York Stock Exchange on May 10, 2024. The company is a leading intelligent electric vehicle company in China, driving the electrification and intelligent development of China's automotive industry through continuous development and provision of new-generation high-end electric vehicles and technology-driven solutions. Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan') provided exclusive industry advisory services for ZEEKR Intelligent Technology Holding Limited's listing in the United States, and hereby warmly congratulate them on their successful listing.

Investment highlights

Global Overview of Pure Electric Passenger Vehicle Market

Since 2019, pure electric passenger vehicles (BEVs) have been the most popular model in global new energy passenger vehicles, accounting for about 70% of the global market share. Global sales of pure electric passenger vehicles increased from about 1.493 million in 2019 to about 10.369 million in 2023, with an annual compound growth rate of 62.3%. In 2023, China's sales of pure electric passenger vehicles were about 6.258 million, making it the largest market for pure electric passenger vehicles in the world, accounting for 60.4% of global sales. At the same time, Europe is one of the fastest-growing markets for the global pure electric passenger vehicle market, with an annual compound growth rate of 55.0% from 2019 to 2023. With the continuous growth in demand for emission-free vehicles and government favorable policies, the global pure electric passenger vehicle market will continue to expand, expected to reach 26.909 million by 2028, with a compound annual growth rate of 19.4% from 2024 to 2028.

Overview of China's Pure Electric Passenger Vehicle Market

China is a global leader in new energy vehicle manufacturing, possessing a complete industrial chain. It is expected that by 2028, China's new energy passenger vehicle sales will reach 20.98 million units, with a compound annual growth rate of 16.8% from 2024 to 2028.

In China, pure electric passenger vehicles are the most popular type of new energy vehicle. Thanks to the increasing consumer awareness of pure electric passenger vehicles, favorable policy support, improved infrastructure, and the application of advanced technologies, pure electric passenger vehicles are becoming increasingly favored by consumers. In 2023, pure electric passenger vehicles accounted for 69.2% of the total sales of new energy vehicles in China, and it is expected that this proportion will continue to remain high from 2024 to 2028. At the same time, China has been the world's largest pure electric passenger vehicle market since 2019 and is expected to maintain a market share of over 50% in the coming years.

The Chinese pure electric passenger vehicle market can be further divided according to the starting price into: entry-level pure electric passenger vehicles priced below 150,000 yuan; mid-to-high-end pure electric passenger vehicles priced between 150,000 yuan and 300,000 yuan; and high-end pure electric passenger vehicles priced above 300,000 yuan.

With the popularization of pure electric passenger vehicles and the continuous improvement in people's awareness of them, consumers have begun to pay more attention to the cutting-edge technologies and advanced features equipped on pure electric vehicles. At the same time, manufacturers of pure electric passenger vehicles are actively integrating resources upstream and downstream of the industrial chain, enhancing their R&D capabilities to meet the diverse needs of consumers. High-end pure electric passenger vehicles priced above 300,000 yuan are usually equipped with advanced intelligent features and configurations such as ADAS, autonomous driving technology, smart cockpit functions, OTA, air suspension, excellent exterior design, and space layout. These features greatly improve driving comfort and safety, bringing a better user experience and thus being popular among consumers. In the long run, the sales volume of high-end pure electric passenger vehicles is expected to maintain rapid growth, thanks to their advanced technology and better driving experience for consumers.

In 2023, the sales volume of high-end pure electric passenger vehicles (HEPEVs) in China slightly declined, mainly due to the price cut of Tesla Model Y. In the long run, driven by continuous technological updates and iterations, as well as factors that bring better driving experiences to consumers, the sales volume of HEPEVs is expected to maintain rapid growth. In the future, the sales volume of HEPEVs in China is expected to increase from 666,000 units in 2024 to 2.608 million units in 2028, with an annual compound growth rate of 40.6%, making it the fastest-growing segment in China's HEPEV market.

Source: Frost & Sullivan report

Key market drivers for pure electric passenger vehicles in China

• Enhancement of consumer awareness and demand

After more than a decade of innovation and development, China's pure electric passenger vehicles have made tremendous progress in technology, performance, and quality, gradually increasing consumer awareness and acceptance. At the same time, driven by global 'carbon neutrality' initiatives and policies, consumers' environmental awareness has significantly improved. In addition, since the usage and maintenance costs of pure electric passenger vehicles are lower than those of internal combustion engine vehicles, more and more consumers are choosing pure electric vehicles as their preferred or backup vehicle for internal combustion engine vehicles to meet various needs. Therefore, pure electric passenger vehicles have become the most popular type of new energy vehicle in China. Chinese pure electric passenger vehicle brands are also becoming increasingly popular among consumers, with four out of the top five pure electric passenger vehicle brands sold in China in 2023 being domestic brands. In the future, as consumer purchasing power increases and the middle class expands, high-end pure electric passenger vehicles with superior configurations, long driving ranges, intelligent driving functions, and advanced autonomous driving technology will be favored by more consumers.

• Improvement of charging infrastructure

In recent years, the construction of charging infrastructure for new energy vehicles has been continuously expanding. For example, the number of public charging piles in China increased from about 500,000 in 2019 to about 2.7 million in 2023, with an average annual compound growth rate of 51.6%. It is expected that by 2028, the number will reach about 10.9 million, with a compound growth rate of about 28.3% from 2024 to 2028. In 2022, the "Implementation Opinions on Further Enhancing the Service Guarantee Capacity of Electric Vehicle Charging Infrastructure" clearly stated that by the end of the "14th Five-Year Plan" period in 2025, China's electric vehicle charging infrastructure will be further improved, forming a balanced, intelligent, and efficient charging infrastructure to meet the needs of over 20 million electric vehicles. The government has also provided subsidy support for the construction of charging stations and piles, which will further stimulate the development of the charging network and demand in the new energy vehicle market.

• Advancements in battery technology and reductions in battery costs

In recent years, with the advancement of battery technology, the overall performance of new energy vehicle batteries, such as power density, operating temperature range, charging efficiency, and safety, has significantly improved. This progress has not only alleviated consumers' concerns about the safety, vehicle performance, and range of new energy vehicle batteries but also further reduced the cost of new energy vehicles. As a major component of the cost of new energy vehicles, battery costs were once one of the bottlenecks restricting the development of electric vehicles. Driven by factors such as battery technology upgrades, falling raw material prices, and capacity expansion, battery costs have significantly decreased in the past few years and are expected to continue a downward trend in the future. At the same time, lower battery costs have made the raw material costs of new energy vehicles comparable to those of similar fuel vehicles. Therefore, cost advantages will drive further growth in the new energy industry.

The competitive landscape of pure electric passenger vehicles in China

Kelpai has achieved remarkable results in a relatively short period after its establishment, thanks to its continuous deep cultivation in product quality, technological upgrading, and efficient supply chain management. In the Chinese high-end pure electric passenger vehicle market in 2023, Kelpai 001 ranked first in sales. During the same period, Kelpai 009 also made it into the top ten in terms of sales volume among Chinese high-end pure electric passenger vehicles with 19,527 units sold. The recognition of Kelpai 001 and Kelpai 009 by consumers in a short time has proven their outstanding brand strength and product performance.

Source: Frost & Sullivan report

Since its first delivery in October 2021, the Geely Polaris 001 has achieved a total delivery volume of 10,000 units within just four months, making it one of the pure electric vehicle brands with the fastest delivery speed in the Chinese mid-to-high-end and high-end pure electric passenger car market.

JiKe launched its all-electric MPV, the JiKe 009, in November 2022. To overcome the challenges of heavy weight and short range for MPVs, the JiKe 009 was the first to be equipped with CATL's Kirin battery, making it the model with the longest range among all global all-electric MPVs.

The Polaris 009 can also achieve a zero-to-hundred acceleration of 4.5 seconds, making it the model with the fastest 100-kilometer acceleration among pure electric MPVs. In 2023, the ZEEKR 009 was the best-selling pure electric MPV in China.

Note: The launch prices of all above-mentioned pure electric MPV models have been updated to the prices as of December 31, 2023.