Li Shufu, the 10th wealthiest person in China and 209th wealthiest in the world according to Forbes, is chairman of the board of Geely. And as of February 23, he is the largest single stockholder of Daimler. An unnamed source tells the South China Post, “He thinks maybe one or two or three manufacturers that exist today will survive in this new competition. He thinks existing manufacturers should unite and invest in the future and become one of the two or three companies that will survive.”
Lu’s stake equates to roughly $9 billion, so no one can accuse him of not putting his money where his mouth is. Geely is one of the largest car companies in China and has been aggressively expanding its global reach. It owns Volvo Cars and has recently taken a large stake in Volvo AB, the world’s second-largest truck manufacturer behind Daimler. It also owns Lotus and the London Taxi Company, which recently began production of an all new electrified taxi to replace the traditional diesel-powered cabs that have prowled London’s streets for generations.
That’s not the end of Li’s interest in transportation companies, however. Geely recently purchased flying car company Terrafugia. Geely and Volvo have also collaborated to create another brand called Lynk & Co which will specialize in electric cars that are specifically designed to be shareable. It’s that last part that is important to the Daimler acquisition. Li believes connected car technology will be critical to success in the automotive market in the future and believes Daimler is a leader in the wireless communication systems that will make those cars a reality.
Daimler already has a strong partnership with BAIC, a rival of Geely in China. The joint Daimler/BAIC production facility in China builds more cars per year than any other Daimler factory. There is no word on how the acquisition of such a large chunk of Daimler stock by Li will affect the ongoing relationship between Daimler and BAIC. Perhaps Li plans a consolidation of the two Chinese companies as part of his master plan.
According to a report in Süddeutsche Zeitung, Li first approached Daimler about buying a stake in the company last November. He believes the German company is leading the EV revolution over all other German automakers and that there are synergies between the two companies that could be exploited. But Li’s advances were waved off by Daimler chairman Dieter Zetsche, who told Li if he wanted a piece of the company he should go into the market and buy shares like anyone else. So Li did.
But now, all is sweetness and light. On Friday, a company spokesperson said “Daimler is pleased to announced that with Li Shufu it could win another long-term orientated shareholder,” one who is “convinced by Daimler’s innovation strength, strategy and future potential.” Other major Daimler shareholders include the sovereign wealth fund of Kuwait with a 6.8% stake and Renault Nissan with 3.1%. Institutional investors such as Blackrock from the US and the Norwegian State Fund own about 20% of the company.
The Lynk & Co 01, a handsome electric SUV built on the same architecture as the new Volvo XC4o, may be the first car from the new company sold in the US. There are rumors the company may be planning to build a manufacturing facility in South Carolina. The fact that Li Shifu did not invest any of his $9 billion in an American automaker is a telling sign of how those outside the US view American car companies. Several regular CleanTechnica readers have speculated recently on which US car manufacturers will survive. Chairman Li apparently thinks “none” is the correct answer.