TMTPost -- Shares of Zhejiang Zeekr Intelligent Technology Co., Ltd., a Chinese electric vehicle (EV) startup under Volvo’s owner Zhejiang Geely Holding Group, jumped around 34.6% to US$28.26 on Friday, a shockingly robust debut in U.S. market despite reported upcoming elevated tariffs on Chinese EVs.

Credit：Zeekr

Zeekr sold 21 million American depositary shares (ADSs) at $21.00 piece, 3.5 million shares more than its planned offering size. With an offer price at the top of a marketed range of $18.00 to $21.00, Zeekr raised $441 million, creating the biggest U.S. initial public offering (IPO) by a China-based company since Didi Global Inc.’s listing in June 2021.

Base on the close of Friday, Zeekr commanded a market value of nearly $6.9 billion, still 47% lower than its post-money valuation a year ago. In February 2023, Zeekr raised $750 million from five investors including Intel Corp.-backed Mobileye Global in a funding round that valued it at $13 billion. Zeekr was reported last November to shelf its listing due to a mismatch in valuation expectations. Whether Zeekr had downgraded its expectation of IPO size or not, its renewed listing did see strong demand. The Geely-backed company was said to close its bookbuilding on Wednesday, a day earlier than its schedule after its IPO was almost five times oversubscribed.

Given the lackluster performance of U.S. stock market, especially EV sector, Zeekr’s debut seems more outstanding. The benchmark S&P 500 edged up 0.16% on Friday, while shares of three Zeekr’s Chinese peers--Xpeng Inc., Nio Inc. and Li Auto Inc. fell 5.3%, 4.9% and 2.2%, respectively.

Selloff of these EV shares came right after reports suggested the U.S. government would soon impose new tariffs on EVs from China.

Bloomberg cited people familiar with the matter that the U.S. government is poised to unveil its decision to impose new, elevated tariffs that focus on key industries including electric vehicles, batteries and solar cells as soon as next week. The decision results from a review of Section 301 tariffs first first put into place under Donald Trump in 2018 and and the Biden administration decided to hike tariffs on key sectors while largely maintaining other existing China levies, according to the people.

The tariff rate on EVs is expected to quadruple from roughly 25% to 100%, the Wall Street Journal quoted sources Friday, adding that an additional 2.5% duty would apply to all automobiles imported into the U.S. Reuters’ sources said the new tariffs, which is expected to be announced next Tuesday, will maintain existing tariffs on many Chinese goods set by former U.S. President Donald Trump, but will raise tariffs on EVs and add new tariffs to semiconductors and solar equipment. Tariffs on medical supplies like syringes and personal protective equipment will be hiked as well, the sources said.  

“We urge the US to follow WTO rules, lift all additional tariffs on China and not to impose new ones. China will take all necessary measures to defend its rights and interests,”  Chinese Foreign Ministry spokesperson Lin Jian responded to the reported  new tariffs at a regular press on Friday. 

Section 301 tariffs imposed by the former U.S. administration on China have severely disrupted normal trade and economic exchanges between China and the United States, and the WTO has already ruled those tariffs against WTO rules, Lin commented.

The U.S. government will double its fault as the new tariffs suggested it continues to politicize trade issues, abuse the so-called review process of Section 301 tariffs and plan tariff hikes, instead of ending wrong doings, according to Lin.