ZEEKR 001’s Collapse: How Xiaomi and Internal Betrayal Crushed a Star EV

The history of China’s electric vehicle market is written in the dramatic rise and fall of its stars. Today’s subject is a former pioneer that once blazed a trail for the “shooting brake” segment: the ZEEKR 001. But its glory was fleeting. After peaking at over 14,000 units in a single month, its sales have catastrophically collapsed to just 2,400 units—a figure that barely registers compared to its previous triumphs.

The data reveals a shocking decline. What on earth happened to the ZEEKR 001? This is not a simple story of increased competition. It’s a perfect storm of self-inflicted wounds: a sense of betrayal among its most loyal customers, a crippling “team-kill” from within its own corporate family, and the loss of its very reason for being to a powerful new predator named Xiaomi.

1. The First Crack: Betraying Early Adopters with Constant Upgrades

Every crisis has a starting point. The ZEEKR 001’s downfall can be traced back to August 2023 and the controversy surrounding its “three major upgrades in one year” strategy. In the name of innovation, ZEEKR rapidly rolled out significant improvements. Paradoxically, for the very customers who had just bought the car, this felt like a betrayal. “The car I just bought is already obsolete,” became a rallying cry of discontent that spiraled into a public relations crisis.

Tellingly, the sales chart begins its steep, downward trajectory from this exact point. Once broken, ZEEKR customer loyalty proved difficult, if not impossible, to recover, and sales have shown no signs of revival since.

2. The Perfect Storm: An Enemy Within and a Predator Without

With the foundation of trust already cracked, a much larger storm began to brew, attacking from both inside and out.

A. The Enemy Within: Cannibalization and Identity Confusion

Even within the ZEEKR brand, the 001’s position was compromised. The introduction of the ZEEKR 007, a cheaper model targeting a similar customer base, began to erode sales.

The problem, however, extends to the broader Geely ZEEKR strategy. The Lynk & Co Z10, a model from its sister brand, is a near-perfect overlap with the ZEEKR 001 in both price and positioning. Without clear direction from the parent group, these brands began to cannibalize each other’s market share in a severe case of internal friendly fire.

B. The Predator Without: How Xiaomi Destroyed an Ecosystem

The fatal blow to the ZEEKR 001 was delivered by the Xiaomi SU7. Xiaomi didn’t just launch another competitor; it completely replaced the ecological niche that ZEEKR had spent years cultivating: the space of “sport, handling, and performance.”

• Price War: The Xiaomi SU7 entered at a lower price point, immediately siphoning off the ZEEKR 001’s potential customers.
• Performance Dominance: The high-performance image of the 700,000+ yuan ZEEKR 001 FR was utterly crushed by the 500,000+ yuan Xiaomi SU7 Ultra.
• The Result: A year after its launch, the Xiaomi SU7 now sells over 20,000 units a month—nearly ten times the volume of the ZEEKR 001. ZEEKR completely lost its voice and authority in the performance segment it once owned.

3. A Sign of Desperation: Poaching Xiaomi’s Customers

ZEEKR’s desperation is now palpable on the dealership floor. Beyond offering 20,000 yuan cash discounts and 30,000 yuan in points, salespeople are making an audacious pitch: “If you cancel your Xiaomi SU7 order, we will compensate you for your lost 5,000 yuan deposit with points.” This aggressive “customer poaching” is a clear admission of the immense pressure ZEEKR is facing.

4. ZEEKR at a Crossroads: The Search for a New Identity

The plight of the ZEEKR 001 is a microcosm of the entire brand’s crisis.

1. Finding a New Niche: Having lost its performance-oriented home to Xiaomi, where can ZEEKR go? The planned “789 SUV lineup”—linking the new 9X, planned 8X, and existing 7X—suggests a pivot toward the large pure-electric SUV market. But whether it can create a compelling new brand “label” for itself remains to be seen.
2. Redefining Its Place in Geely: Amid a corporate whirlwind of mergers with Lynk & Co, a return to the “One Geely” strategy, and a delisting from the NYSE, ZEEKR’s future is uncertain. The vague strategy of “ZEEKR for premium, Lynk & Co for breadth” is already showing cracks, as the upcoming ZEEKR 9X is similar in size to the Lynk & Co 900, hinting at continued internal conflict.

In conclusion, the fall of the ZEEKR 001 is not the failure of a single model. It is the result of a trifecta of crises: a loss of customer trust, a failure of internal strategy, and the destruction of its brand identity by a powerful external competitor. To overcome this, ZEEKR must answer the fundamental question it now faces: “Who are we?”

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Deeper Dive: Recommended Books for Deeper Insights

For those who wish to explore the themes discussed today in greater detail, here are two books I personally recommend.

[The Invincible Company: How to Constantly Reinvent Your Organization with Inspiration from the World’s Best Business Models]

• Why it’s relevant: This book provides a strategic framework for how a company can manage its existing, successful business (like the ZEEKR 001 once was) while simultaneously exploring and building new growth engines (like the SUV lineup). It offers a highly relevant playbook for the crisis ZEEKR currently faces.
• 👉 [Book Link]

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