Zeekr Intelligent Technology (ZK) scored a big first-day pop after a $5.5 billion U.S. initial public offering Thursday. While Zeekr stock rocketed, other China EV stocks tumbled.

On Friday, reports said that President Joe Biden is expected to impose fresh tariffs on Chinese electric vehicles and trade as early as next week. Existing tariffs have kept often-cheaper Chinese EVs out of the country, but some lawmakers worry tougher measures are needed.

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Strong Demand For Zeekr IPO

Shares of Zeekr soared 29% to 27.22 on Friday’s debut. Zeekr stock climbed roughly 29% above its IPO price of $21.

The EV startup sold 21 million American depositary shares (ADSs) at $21 per share to raise $441 million. It had earlier targeted an $18-$21 per share range. The company reportedly closed orders from investors a day early after its IPO was oversubscribed.

Most electric-vehicle startups have dashed investors’ hopes after sizzling debuts just a few years ago. Even major EV stocks are a bag of hurt as global sales slow.

But Zeekr has several things going for it, underscored by the strong demand for its shares despite a brutal China price war.

Zeeker Stock: Doubling EV Sales

Top of list, Zeekr boasts actual vehicle sales and revenue — no mean feat for a three-year-old startup. In 2023, Zeekr delivered 118,685 premium electric vehicles. It generated $7.28 billion in revenue, up about 62% from 2022, according to an IPO filing. The company delivered a loss of $1.16 billion last year.

Secondly, its sales are growing while even Tesla (TSLA) is struggling amid the price war. In April, Zeekr told CNBC that it is outselling the Model Y and Model 3 maker in parts of China. Deliveries totaled 49,148 in the first four months of 2024, up 111% year over year. Zeekr is targeting 230,000 EV deliveries for the full year, roughly double the 2023 tally. Its growing lineup includes the Zeekr 007 sedan, 001 SUV and 009 van.

Not least, there’s the parent company: Geely. The Chinese car giant, which founded Zeekr as an EV subsidiary in March 2021, is trying to catch up with BYD (BYDDF) in electric vehicles. Geely owns several car brands, including Polestar (PSNY), another high-end EV startup. Both startups can lean on the auto group’s deep pockets.

ZS Stock, China EV stocks

The IPO gave Zeekr a $5.5 billion valuation, but less than the $13 billion it fetched after a funding round last year.

For context, Nio (NIO) has an $8.4 billion market value, after a steep slide since January 2021. Nio delivered 160,038 electric vehicles in 2023.

As ZK stock debuted, various reports on Friday said President Biden is likely next week to expand tariffs on Chinese goods. The levy on EVs is set to quadruple, sources told The Wall Street Journal. Higher tariffs could also be imposed on critical minerals, solar goods and batteries sourced from China.

Such measures were first put into place under former President Donald Trump.

Nio  fell 4.6% on the stock market today. Among other China EV startups, XPeng (XPEV) and Li Auto (LI) also sustained big losses Friday.

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