GEELY AUTO Sinks 4%+, Planning to Lead Consortium in Buying Majority Stake in Volocopter

GEELY AUTO's Stock Price Drops Following News of Volocopter Stake Acquisition

Shares of Chinese automaker GEELY AUTO (0175:HK) fell by over 4% in Hong Kong trading on Tuesday, following the announcement that the company is planning to lead a consortium in acquiring a majority stake in German eVTOL developer Volocopter. The news of the potential acquisition comes amidst a broader sell-off in the Chinese stock market, with the Hang Seng Index dropping by over 2% on Tuesday.

Volocopter's Valuation and GEELY AUTO's Strategic Move

Volocopter, founded in 2011, is one of the leading developers of electric vertical take-off and landing (eVTOL) aircraft. The company has raised over $320 million in funding to date, and its investors include Intel, Daimler, and Geely Holding Group (Geely AUTO's parent company). Volocopter is currently valued at around $1 billion, and GEELY AUTO's planned acquisition would give it a controlling stake in the company.

GEELY AUTO's move to acquire a majority stake in Volocopter is seen as a strategic move to gain a foothold in the rapidly growing eVTOL market. eVTOLs are expected to revolutionize urban transportation, and GEELY AUTO is keen to be a major player in this new market.

Challenges Ahead for GEELY AUTO and Volocopter

However, GEELY AUTO and Volocopter face several challenges in the eVTOL market. The market is still in its early stages of development, and there are a number of regulatory and technical hurdles that need to be overcome before eVTOLs can be widely adopted.

Additionally, GEELY AUTO and Volocopter face competition from a number of other companies, including Boeing, Airbus, and EHang. These companies are all investing heavily in the development of eVTOLs, and GEELY AUTO and Volocopter will need to differentiate themselves in order to succeed.

Conclusion

GEELY AUTO's planned acquisition of a majority stake in Volocopter is a bold move by the Chinese automaker. The acquisition would give GEELY AUTO a foothold in the rapidly growing eVTOL market, but the company faces a number of challenges in this new market. It remains to be seen whether GEELY AUTO and Volocopter can overcome these challenges and become major players in the eVTOL market.