Li Shufu, a billionaire and founder of one of the largest automotive empires in the world, is currently facing a number of significant challenges in the rapidly changing automotive market. His company, Geely Automobile, part of Zhejiang Geely Holding Group Co., has been struggling to catch up with the leader in electric vehicle production, BYD Co. Simultaneously, global ambitions for Volvo Car AB, which Geely acquired, are being hampered by trade conflicts, further impacting the company's profitability.

Issues on the International Stage

Geely encounters various obstacles on the international stage that affect its competitiveness. Key aspects to consider include:

• Competition in China. BYD Co. is effectively increasing its market share in the electric vehicle sector, placing Geely at a disadvantage.

• Challenges in Europe. Volvo Car AB, a subsidiary of Geely, faces pressure from tariff conflicts and complicated trade conditions within the region.

• Closed Markets in the U.S. On the lucrative American market, Chinese brands encounter significant barriers, adversely affecting the stock prices of Polestar Automotive Holding and Lotus Technology Inc., which are registered in New York.

Strategic Changes Within the Group

In response to these challenges, Li Shufu has announced the need for cost optimization within his companies. In a document titled "Taizhou Declaration," he outlined the necessity of restructuring within the group aimed at supporting Geely's various brands.

Primary Goals of the Strategy:

1. Reducing excesses in management and production.

2. Supporting synergistic interactions among different business units.

3. Optimizing financing and resources across the companies.

This strategy entails consolidating efforts to minimize losses and adapt to market changes.

Impact on Geely's Future

Li Shufu’s strategy is designed to maintain Geely's resilience in the face of declining demand for electric vehicles and rising trade tensions. The need to overhaul business models and cut costs signals that the company has recognized the importance of flexibility in a dynamically shifting market.

Key Factors in the Electric Vehicle Market:

• Growing interest in sustainable technologies;

• Changing consumer preferences;

• Competition from other vehicle manufacturers, including European and American brands.

Li Shufu and his company Geely are at a critical juncture in their development. The necessity of adapting to new conditions presents both a challenge and an opportunity for growth. By implementing strategic measures, Geely can preserve its significance in the global automotive industry and strengthen its position in the Chinese market, which continues to be the main growth driver.